FUMING OVER THE HIGH PRICE OF PLENTIFUL GAS

DEAR John: I have only one question: if there is a shortage of gasoline why don’t we see any stations running out?
A.S., Manchester, N.J.

Dear A.S.: That is just plain old-fashioned thinking. You undoubtedly grew up in the 1970s and ’80s when you actually had to have a shortage of something like gasoline before companies could gouge consumers on the price.

Today’s thinking: if you can perceive of a shortage for any reason possible – like a rumored alien invasion or a takeover of an oil field in some remote region of Africa – then you can get prices of “paper” barrels of oil to rise on Wall Street. By that I mean barrels of oil that will be delivered in the future but don’t really exist now anywhere except on someone’s ledger.

That, in turn, allows gasoline refiners to boost the price of their product. The blame will then – happily – fall on Wall Street speculators although oil companies are equally culpable.

There is no shortage of either gasoline or oil.

Again, let me say it: there is no shortage of either gasoline or oil.

That’s why there are no lines at the gasoline stations like in the bad old days. And that’s why there aren’t going to be in the future, even if Americans decide to take an extra trip to the shore this summer.

Right now there are 201.5 million barrels of gasoline in storage in the United States. And there are 342.4 million barrels of oil, even though Washington has been a very competitive buyer on the open market because it wants to keep the Strategic Petroleum Reserve – our emergency oil – at its peak level.

So why is the price of gasoline as high as it is? Basically it’s the same reason why Picassos are priced as high as they are – because there is too much speculation in the market.

There is the slightest excuse for oil speculators to drive prices higher – that is, the inventory numbers I cited above as slightly down from levels the industry consider optimal. But it’s not much of an excuse.

For instance, back in early March there was 210.5 million barrels of gasoline in stock. And that’s considered a more normal level for this time of year. The 201.5 million stockpiled today, however, is up sharply from the 197 million barrels reported by the government in early April and the number keeps growing every week.

I’ve written before about the cause of inventory being down: for reasons lame and legitimate, oil refineries have been shut down in extraordinary numbers this spring. So less gasoline is being made and less is being imported.

And there isn’t a problem with the stockpile of oil, either, not like there was the last time oil companies were free to pick our pockets.

Crude oil already in stock in this country has been rising steadily this year and is close to normal levels.

And now refineries are beginning to operate at more normal levels – hovering around 90 percent of their capacity.

But speculators make money mainly by anticipating price increases. So the fact that stockpiles of gasoline and oil are only “near” normal gives them the excuse to bid up prices.

And the counterbalance in this sort of market – the federal government – is asleep at the pump.

So what can be done?

Washington could impose restrictions on speculators – say, by limiting the number of contracts any one investor can hold on energy futures.

Or it can control the amount of leveraged – borrowed money – which can be wagered on the future price of oil and gasoline.

Will that happen? Not unless someone gets some pistons.

The high price of gasoline is currently thrashing the budgets of most households and companies – and may well be responsible for people not being able to pay their housing bills, hence aggravating the mortgage and building crisis.

And it’s about time someone took the initiative. Hey, doesn’t anyone want my vote for president?

Late last week the price of crude oil was around $67 a barrel. And at that price, regular gasoline was carrying an average retail price of nearly $3.07 a gallon. And that’s after a 15 cent a gallon drop recently.

Let’s look at the price of gasoline some other times oil was selling at around $67.

Back in February 2006, oil was at $66.56 a barrel and gasoline was retailing for only $2.34 a gallon – a difference of 73 cents from today’s price.

And at the end of September 2005, gasoline was selling at $2.80 a gallon even though oil has risen to just under $67 and there were great fears about hurricanes. That’s 27 cents cheaper than today.

And those 2005 and 2006 prices were already bloated because of speculation. So, right now speculators and the oil industry are driving the public and the economy not only over a barrel, but also dangling them over a cliff.

So you aren’t likely to see lines at gasoline stations unless the gang keeping prices up is looking for the kind of graphic image that will inevitably lead to investigations.

(Crudele’s Dear John column regularly runs in the Sunday New York Post. Questions and comments can be sent to him at john.crudele@nypost.com or mailed to New York Post, 1211 6th Ave., N.Y., N.Y. 10036.)