First of all, what you describe in your post has nothing to do with "inflation." Rather, it is a pure speculation regarding Government-induced oil price manipulation. These are two totally different things.
But you have more problems as well..............
Business was screaming about a bad economy. So the government got the oil industry to fake the shortage and price increases so they could raise the prices.
So how does faking an oil shortage help a bad economy? This makes no sense. Seems to me that such a practice would hurt and already ailing economy.
You are also wrong insofar as the price increase of Diesel Fuel is concerned. The final factor in why diesel fuel prices are higher is taxes. The federal tax on diesel fuel is 6 cents more than gasoline per gallon (24.4 cents vs. 18.4 cents). The last increase in the federal tax was in the early 1990s, back when diesel fuel was usually less expensive than gasoline.
And besides, this whole debate is simply Pure speculation on your part.
Care to provide any links to support what you claim?
I think the argument is that the price of oil was artificially raised to cause cost-push inflation on the price of goods. Then the price of oil returned to the lower equilibrium price without an associated decrease in the price of goods. Producers aren't reducing their prices and pocketing the difference. This phenomenon would be labeled sticky prices.
Though I am not sure if this argument is empirically supported. The bit about intentional manipulation of the price of oil for the benefit of producers is most certainly false.
The bit about intentional manipulation of the price of oil for the benefit of producers is most certainly false.
Exactly. And the debate author still mis-used the word "inflation" and has not as of yet provided ANY proof on his claims whatsoever, which relegate his whole debate into just another bullshit conspiracy rant.