Gasoline pumpOil's surge to more than $105 per barrel -- which has caused the average price of unleaded regular to jump more than 40 cents in less than a month to about $3.50 per gallon -- is rooted more in psychology than in fundamentals.

Globally, there's no shortage of oil, nor any lack of gasoline in the U.S., but traders' fears that the civil unrest in minor oil exporter Libya may spread to major oil exporters Saudi Arabia or Iran has led an oil price spike, led by market speculators and large end users of oil.

However, the U.S. government is not powerless: It can help take some pressure off oil's price -- if it addresses both market psychology and oil's fundamentals. Here's how:

1. Random Releases From the Strategic Petroleum Reserve

Previous draw-downs from the SPR, which currently holds 727 million barrels of oil, in 1990-91 (Desert Storm, 17 million barrels), 1996-97 (deficit reduction, 28 million barrels), and 2005 (Hurricane Katrina supply disruption, 11 million barrels) did cause prices to decline somewhat. Another sale in 2011 might do an even better job, if properly structured.

For example, if Washington announced that it plans to release, at random times, an unspecified amount of oil from the SPR, that would immediately create more downside price risk and scare some of the speculative net long positions -- for oil traders who don't take delivery of oil -- out of the market. This psychological component -- not the actual amount sold -- is the SPR's primary price weapon.

Next, on the day of SPR sales, the government could without prior notice announce that it's releasing 3 million, or 5 million, or even 20 million barrels of oil. This second "supply shock wave" would further depress oil prices, and trigger stop-loss sales by an additional speculative "net longs." After seeing their trades stopped-out due to unpredictable oil dumping from the SPR, which could cause oil to suddenly drop $3 or $4 in minutes, many more speculators would no doubt exit the market and likely lower prices even more. Subsequent surprise sales would enhance the impact.

About $15 per barrel, or about 37.5 cents per gallon of gasoline.

2. Double Margin Requirements for Oil Speculators

Oil speculators aren't the only factor in today's $100-plus-per-barrel prices, but they're playing a role, and DailyFinance's Peter Cohan has a idea that will complement random SPR sales: The New York Mercantile Exchange and Intercontinental Exchange (ICE) should double their margin requirements for oil contracts, currently $6,075 and $5,200, respectively. Cohan points out that if regulators did so, it would decrease speculators' ability to gamble with borrowed money -- something that would lower oil prices.

$15 per barrel of oil, or 37.5 cents per gallon of gasoline.

3. Temporary Moratorium on Federal and State Gas Taxes

The U.S. government and the states can also suspend their gasoline taxes for a specified period of time. The federal tax is 18.4 cents per gallon, and the states tack on an average tax of 48.1 cents per gallon (high: California, 64.2 cents; low: New Jersey, 32.9 cents). That would drop gas prices by an average of 64.5 cents per gallon.

If states can't afford a full, temporary suspension, perhaps they can opt to cut them in half -- still a significant price reduction for motorists.

An average of 64.5 cents per gallon for a full moratorium, about 32 cents for a 50% moratorium.

4. Temporarily Suspend Winter/Summer Gasoline Formula Laws

Every summer, the Environmental Protection Agency requires that many states, including California and New York, use a special summer gasoline formula that's less likely to evaporate during warmer weather, reducing harmful emissions.

However, the summer blend costs more to make, and it also raises refiners' costs by requiring them to tailor gasoline types for different states. So, a temporary suspension of the summer gasoline requirement would lower prices at the pump slightly.

True, the air wouldn't be as clean in those states in the summer, but if a temporary suspension could lower gasoline prices by 10 cents or 15 cents a gallon, the trade-off would be worth it, at least in the short term.

10 to 15 cents per gallon of gasoline.

5. Strictly Enforce 55-MPH Speed Limit

Many motorists probably won't like this tactic, but it would lower gas prices. Most vehicles get much better gas mileage at 55 mph than at 65 or 70. If the U.S. government provided cash incentives for the states to strictly enforce the 55-mph speed limit, gas consumption would drop substantially, and it would lower prices, or at least limit increases.

The key is getting universal or near-universal compliance with the 55-mph limit to create the largest drop in gasoline demand possible.

First imposed during the 1973-74 energy crisis -- the world's first oil shock -- the 55-mph limit saved not only gas, but lives. The U.S. had an average of 4,000 fewer traffic-related deaths per year until the law was repealed.

Savings: About 10% of fuel consumed, or about 35 cents per gallon.

If All Five Steps Are Taken: Total savings of $1.52 to $1.89 per gallon.

Of course, most of these measures would face significant resistance. States with tight budgets would balk at any attempt to decrease their gas-tax revenue. Inducing nationwide compliance with a 55-mph speed limit would be even harder. But even if only a few of these steps were taken, and gas prices fell by a lower amount -- for example, 70 cents to 90 cents -- that would still represent a substantial savings for most motorists.

That price reduction would help propel the U.S. economic expansion forward by increasing consumers' disposable income and reducing businesses' transportation costs.

But these are just short-term measures. Long-term, the U.S. needs to increase vehicle efficiency in a big way and to wean itself first off imported oil, then off oil in general, with a national policy to increase energy efficiency across society. It's in the country's best interests not to be held hostage to the volatile and economically damaging effects of reliance on oil.

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NOW HEAR THIS!!!! i remember the arab oil embargo in the 70's,,, the gas lines etc,,, which caught us by surprise wow!!! and i remember reagan setting the 55 mph national speed limit which everbody hated, but begrugingly did save gas, and according to statistics did save lives... and we didn't learn our lesson, to stop being so dependendent on the arab nations!!! now here we are!!! we have more natural gas, and recently have found that we have more oil than the other countries, and now with new technologies that are available, we can drill much more safely now then we could in the 70's or the 80's period... but why aren't we??? obama has put a morotorium on drilling!!!and now there is this new hydrogen technology,, and i say why not develop it??? less oil consumption,,,less pollution, NUFF SAID!!!!

March 19 2011 at 10:00 AM Report abuse +1 rate up rate down Reply

yes we should do what he said but add a few thing to it stop making 93 gas we dont need it make only one type of 87 year long for all the us and yes drop the speed to 55 if some go over Shoot them no more ticket they dont care for there life or other dont need them on the road stop buying small japs juck car dont care where there are made the better the gpm get high the price for gas will go to make up for selling less gas big oil have a set profit they going to make so if profit are up show they are charging to much for gas and put a piggback taxs on profit what ever there profit are they keep half ONLY the rest go to keep price of gas down

March 19 2011 at 6:42 AM Report abuse rate up rate down Reply
English language

WAKE UP AMERICA!! I am sooo sick of the "Blame Game", used by this inept President more than at any time in History. This man is not an idiot, though he has NO business experience. He eneacted the 'stop' of drilling in the Gulf out of true intent, knowing it would force more rediculous attention on wind/solar, and, eventually, another opportunity for gov't control! The BP rig is not every rig. Incredulous to me is that NO mention was made as to opening up ANWR, the gulf, inland sources to build an at-home energy supply!! By the way...are we so numbed that we don't consider the cost of establishing the grids to transfer the 'dream-scape'(including its noisey drone!)energy to individual households? STOP ignoring the fact that this is yet another gov't-designed take-over of free enterprise and your right to DECIDE what is best for your community!!

March 19 2011 at 12:16 AM Report abuse rate up rate down Reply

Why can't we just buy gas from American gas companies? BP, MURPHY USA, SUNOCO, HESS etc. This should put a crimp in their wallets....
Also, We need to drill for ourselves...Stop being dependant on anyone one.We have the resources...Lets use them..

March 18 2011 at 5:50 PM Report abuse -1 rate up rate down Reply
1 reply to Jason's comment
Alex Mikula

...BP stands for british petroleum

November 29 2012 at 3:13 PM Report abuse rate up rate down Reply

"Brilliant, my dear Watson!" er... I mean Joseph Lazzaeus.
I thought that President Obama had included in his agenda the sale of some gasoline reserves. precisely to bring prices down. But it seems that there are people in the WH that overrides him on anything popular.
Let's keep pressing for these alternative ways to deter artificial price increases.

March 18 2011 at 12:43 PM Report abuse +1 rate up rate down Reply

nuclear debate is a distraction.

March 17 2011 at 4:22 PM Report abuse rate up rate down Reply

We have more oil, natural gas and coal than the other energy nations put together. We have the technology to drill reponsibly. We were given this resource for a reason, and that is not to just sit on it.

The government wants us to use wind and solar, but this is impractical as it would take 5 square miles of wind turbines just to power NY city! And imagine the solar panels covering all the landscape! Forget nuclear energy!

After the Japan tragedy, no more will be built probably and the ones we have will probably be shut down because of the governments knee-jerk reactions.

Ethanol is not good as I have heard it ruins some engines. Plus the fact that we face a world food shortage, and we need to corn to eat!

March 17 2011 at 1:23 PM Report abuse +1 rate up rate down Reply
Antone Grieco

Set the reduced speed limit to 60 mph, rather than 55 mph. Diesel trucks use their highest gear at 60 mph but have to shift down a gear to go 55, thereby using more fuel, not less.

March 17 2011 at 6:43 AM Report abuse +2 rate up rate down Reply

So why aren't any of these fixes happening !!!! I agree with all EXCEPT the 55mph limit.Barry WANTS the gas prices high so his elec car promise will come true !!! I read recently that hiway deaths per 100,000 are actually down due to safer vehicles/seat belt laws eventhough speed limits are 75-80 mph so that's not an excuse for lower limit,just revenue generator.

March 17 2011 at 12:48 AM Report abuse +2 rate up rate down Reply

I'm gonna start a new project, a company to make horse pooper scoopers because pretty soon we in America will be driving old nags around and if you feed them they will poop on the roadways and cause an accident if you don't pick it up. Plus I'll make a million bucks from the idea.

March 16 2011 at 10:58 PM Report abuse +1 rate up rate down Reply
1 reply to sdeanbyrd's comment

My design is better=direct connection to horse with dryer hose to onboard methane generator,byproducts would be methane and fertilizer,trade at fuel stop for more hay/feed/water.

March 17 2011 at 12:53 AM Report abuse +1 rate up rate down Reply