We Don't Have a Free Market in Transportation Fuel

When thinking about the "mandate issue" (wanting to preserve a free market and not encumber it with government regulation) on the open fuel standard, it is important to realize that right now petroleum does not exist in a free market.

Some oil production operations produce oil for much cheaper than others, so they could sell theirs on the market at a price lower than anyone else, and thus gain a larger market share.

But they don't. They all sell barrels of oil for the same exorbitant price. Why?

Because they can sell every drop they have at top dollar.

Why? Because OPEC keeps oil artificially scarce. OPEC is large enough and keeps oil scarce enough that all the oil that becomes available on the world market is snatched up. There is no competition. It's an unprecedented (and illegally-created) seller's market.

But OPEC's price-fixing, economy-devastating scheme (and its destructive effects) can be bypassed with the simple introduction of an Open Fuel Standard bill in Congress. With the passing of the bill, cars would become a platform upon which different fuels would compete against petroleum in a free market.

Prices for fuel would quickly drop, and the economy — no longer dragged down by the crushing, encumbering, onerous fuel prices — would boom.

Adam Khan is the co-author with Klassy Evans of Fill Your Tank With Freedom and the author of Slotralogy and Self-Reliance, Translated. Follow his podcast, The Adam BombYou can email him here.

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