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HIGH GAS PRICES TO CONTINUE?

Just like a few other governments, the US (through its congress), is pushing for the wider usage of bio fuels. As reported by ABC News, such a scenario, coupled with the development of fuel efficient automobiles are making oil executives withhold plans to expand their existing refineries. If that happens, high pump prices of gasoline is expected to be the future scenario.

At the moment, there is an existing shortage of oil refineries in the US. In addition, demand for gas products is expected to increase. However, President Bush's call to reduce the demand by 20% though the wider use of bio fuels and development of energy efficient automobiles is making the oil industry rethink its expansion plans.
"Asked recently whether Chevron Corp. might build a new refinery, vice chairman Peter Robertson replied, "Why would I invest in a refinery when you're trying to make 20 percent of the gasoline supply ethanol?"
The ABC news report included various opinions regarding this issue. One thing is clear, most people agree that gas prices are very high at this point. If this continues, maybe it is time to ask; "Is this a case of market failure?"

Should the government intervene to remedy this problem? By the way, this problem is not unique to the United States.
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