Please set the record straight. Back in the day, when gas prices first hit $2/gallon, Congress would have had to approve the increase. What happened to that law? There seems to be no need for our overpriced gas here in California!
— Steven, North Park
Energy regulation is a long, boring, complicated discussion, but here’s the quick and dirty. Price controls on oil and gas did exist at one point in history. They were a product of Nixon’s economic gamble leading up to the 1972 election. Prices and wages were frozen across American industry in a bid to temporarily halt inflation so that Nixon could look awesome and win the election. People loved it until the mid and late ’70s, when the expiration of the controls sent inflation skyrocketing to 15 percent. We weren’t so happy then. Technically, it wasn’t Congress but an executive committee that approved price raises during the era of price control.
Partly because of American interest in the petroleum industry, gas and oil price controls lasted much longer than the rest of Nixon’s economic measures. Full deregulation on petroleum prices didn’t happen until 1981. It didn’t really matter, however, because the 1980s were a time of global petroleum surplus, when the United States wallowed in a sea of cheap oil. A bunch of other countries nearly went broke because their oil became super devalued. In light of that, it’s not so much that our gas is “overpriced” now as that it’s been historically underpriced and there’s not really much the government can do about it...at least not in the long run.