RealMoney Radio: Gouging and Guzzling

Jim Cramer continued the pump price talk Wednesday, telling his "RealMoney" radio show listeners that an investigation into price-gouging isn't going to bring gasoline prices down.

Instead, he said that people should look at the underlying fundamental factors that have kept prices higher, including the switchover from MBTE as the main gasoline additive to ethanol.

"There was a sense that we could have a huge crisis of health had we continued to put this MBTE in gasoline," he said. "But we were so worried about this that the government and the [system that gets the gasoline to you] were unprepared to for the problems of switching to this new blend."

Because there are many distribution points between the oil well and the gas pump, he said that making this changeover has created gasoline production bottlenecks.

And that's where the problem is, Cramer said. Ethanol is not easily added to gasoline, and many distribution centers were unprepared for the move.

Making gasoline has become more labor intensive, and so it's more expensive, he said. Plus, the U.S. is not the largest maker of ethanol. It's Brazil, Cramer said, adding that the country produces more than half of world's ethanol.

He also said that 70% of cars sold in Brazil are flex cars, meaning that they run on gas or ethanol.

Will we see the U.S. import ethanol from Brazil as a stopgap measure, he asked? Given the steep tariff on Brazilian ethanol, Cramer said that would be an unlikely solution.

Because of intense lobbying, he said there is an instinct to protect U.S. corn farmers, who are trying to make their own ethanol.

The U.S. doesn't matter anymore in terms of oil production, he said, and that is another reason why our oil prices so high.

The swing producers that have excess oil capacity vs. what they would use include Iran, Nigeria and Iraq, pointing out that these are hardly stable places. When Venezuela is your safest supplier nation, it's time to think twice about whether we're in good shape with oil, he said.