Gas prices have almost doubled at the pump over the past three years, from an average of $1.60/gallon in April 2003 to $2.74 in April 2006. What would cause such a dramatic increase? Opinions range from vast oil conspiracies to classic supply and demand. However, these perspectives are not mutually exclusive — oil demand is largely inelastic, while oil companies have a significant influence on the supply, and therefore their own profits. (more…)