OK. Here's where everyone complains and says governments are in league with the oil companies and calls them satan incarnate. Let me explain the REAL reason behind this...it's called Supply & Demand Economics
Oil is a commodity, just like gold, orange juice, wheat, and cotton. The prices of commodities are determined by how much of it people want and what they are willing to pay for it (sort of like an auction). When there is a reason that brokers and the people they represent believe that there will be a shortage or high demand for a commodity, they buy as much of it as they can to try and make the most profit. If there isn't much demand, then the products they make with these commodities have to be sold cheaper and the brokers and their customers lose money. So the oil companies just put the oil they pump out onto the market and how much it makes is determined by buyers. And the hysteria about oil has been sending the cost of a barrel of oil thru the roof. That is why oil suppliers are making record profits.
Now onto profit. Companies work on Margins of Profit. Minimum margins are determined by a companies overhead. The more they have to spend making a product, the more of a markup they must put on a particular product. Overhead are things that have no direct bearing on a product being made such as Salaries, Electricity, Property Rental, Phone Bills, Trash Collection, etc. This is why you can buy things cheaper online than from retail stores. In the case of fuels, the margin percentage has remained the same, but when it costs more to buy supplies for making something (oil for fuel) then by contrast, the price of the end product goes up. If something costs $1 to make and you sell it at 10% profit, then you receive $1.10 for your $1 investment. Now if it costs $2 to make, the same 10% profit makes it cost $1.20 and you have made 20 cents instead of 10. That is the reason that refineries are making record profits.
The government hasn't stepped in to stop them because that would mean stopping global economy. US Oil companies are just a small number of companies involved in the oil and gas market, but they are far and large the most restricted. It is estimated that 1/2 the cost of a new industrial undertaking (refinery, power plant, etc) is used in legal fees by the massive number of groups filing lawsuits to stop a project and one 'environmental impact study' after another. Do you know that there has not been a new refinery opened in America since the 80's nor have there been any improvements to existing ones to more efficient ways of making fuels.
Here is the solution and it will take 3-5 years to accomplish: Allow the refineries to expand, update and build. Do one impact study-period! Have the courts give a date that ALL opposition must submit their filings by and cut it off at that date. Allow the lawyers to argue against them en masse. Once projects are approved, fast track em. Give the builders tax BREAKS as an incentive to get these factories up and online.
Only when the supply amount of fuel is increased to the US will prices come down dramatically. Fuel companies would much rather sell a million gallons of gas at $2 a gallon than 200,000 gallons at $4.
The ONLY controls that the govt can legally have is the amount of taxes applied to each gallon. Federal taxes on Gas are 18.4 cents per gallon, here in Maryland 41.9 cents is added per gallon. That's over 60 cents per gallon! California adds 63.9 cents per gallon; that's 82.3 cents per gallon in taxes.
Here is a breakdown on a gallon of gas from California on May 5th, 2008. Cost of gas: 3.90. Cost of oil to refinery 2.86 Oil production profit 0.13 Refinery profit 0.24 State Underground storage fee 0.01 State & Local Sales Tax 0.29 State excise tax 0.18 Federal excise tax 0.18. There are the numbers. The oil pumpers made 13 cents, the refiners made 24 cents, the federal gov't made 18 cents and Cali taxes collected 48 cents...TWICE as much as anyone else!