THE REALITY: The market is not free. Overlapping monopolies prohibit competition that would reduce fuel prices.
The U.S. market is inhibited by a series of interconnected monopolies: automakers that manufacture primarily for gasoline, a fuel distribution system restricted to gasoline only, and government regulations that legislate according to the status quo. Collectively, these cement oil as the fuel source of choice, preventing competition and market innovation and ensuring that consumers continue to pay the high prices of a monopoly. Like the AT&T example, when the telephone market was forced open, consumers benefit from competition while existing firms figure out how to compete without the benefit of a monopoly.