I know: It's definitely not price gouging (insult away, BTW)

I think the guy running that gas station outside of Atlanta who jacked his prices up to 6.00 a gallon the day after Katrina could be considered a gouger.

 

And I think every gas station and gas company that jacks up their prices for the following reasons are gougers:

*Hurricane Katrina
*Hurricane Rita
*Memorial Day
*Labor Day
*Fourth of July
*Mother's Day
*The war in Afghanistan
*The war in Iraq
*The war in Israel
*The war in Lebanon
*Political unrest in Brazil
*The European Union farting
*Dick Cheney shooting a hunting buddy
*Lance Bass admitting he's gay
*No blowjobs from their wife for a month
etc.
etc.
etc.
etc..

 

All these people who keep saying that it's all about the free market, supply and demand, people should stop driving so much, etc., are ignoring some very basic facts: There is no K-Mart or Payless Shoes for oil. Consumers have no other option than to pay what the companies are charging. Buy a hybride? Sure, people can take out another mortgage. If you have a mortgage.

And those of us who don't live in urban areas - with public transportation and shorter commutes, plus less reason to leave the city - don't have many options other than to shut down big parts of their life or make huge sacrifices. Yes, gas consumption has actually increased - I can't explain that, other than people couldn't cancel vacations or business trips, but will start doing so. But trust me, people are hurting. I'm hurting.

Oil is a special commodity. It should be dealt differently than any other product. Price controls, no. But some sort of relief for consumers, or investigation into the companies and possible windfall tax, I think you have to look at. At a minimum - and I'm a moderate - if you had someone else in the White House I'd be willing to bet they would get the oil execs together and say, "Look, this can't keep up."

 

Which is why I qualified it with "if ... oil companies (are) hording profits and making unilateral decisions to jack up prices." Any new company is forced to buy its oil at $78/gal or whatever it is today. In the end, its stations are going to charge roughly the same amount as their more-established brethern, unless they want to go maverick and take like a 50-cent loss per gallon, which would make them insanely popular until they run out of supply and go out of business.  

 

Two... I could understand that (a massive cost-basis increase for the U.S. oil companies) driving up at-the-pump prices.

How does that translate to pure profit, though?

I'm still waiting on this.

 

According to at least four posters on this thread, it's just market forces at work.

 

RWE has made the exact same point I made months ago when we were bitching about prices spiking over $2.50. And the same arguments about free-market economy, unrest in the Middle East, yadda, yadda, yadda were being made back then.

Let's talk about pay raises in the journalism market, a field which isn't exactly seeing robust growth. In four years as a newspaper, I got one COLA raise but THREE insurance premium increases. Meanwhile, the price of gas kept shooting up and while I'm taking it in the shorts, I'm told that Exxon-Mobil needs to keep making a multi-billion profit so they can produce smarmy commercials that tell us how they care about us and the environment.

 

The oil companies pull the oil out of the ground whether it costs $12 a barrel, as it did about six years ago, or $72 a barrel. It costs them x-amount of dollars to turn that oil into gasoline, and to carry it all to market. Let's say that figure is $10 a barrel. (I have no idea what the figure actually is, but we're being theoretical).
At $12 a barrel, that's a $2 profit. At $72 a barrel, it's a $62 profit. Hence, record profits.
Now, who sets that price?
Well, oil is a commodity, just like gold, diamonds, wheat and oranges. Those who produce it endeavor to get the most for that commodity. It's how the world markets work.
Have you ever heard of an orange grower taking his oranges to market and saying he'll sell his for 25 cents each instead of the 35 cents that the market is paying in the hope he'll move more of his oranges? No, because it doesn't work that way. The market is set by how many oranges are available and how many the distributors can move. Well, in the case of oil, those who produce it don't have to worry about whether they can sell it. There are plenty of customers, thanks to China/India, thanks to all those people in Vegas and Florida who drive SUVs when it'll never snow, etc. So Exxon doesn't have to collude with BP to get a primo price for its oil. Market demand does the job for them.

 

Since you know how the market works and since you're yet another oil and gas company apologist, I'd like YOU to give me $10 so I can fill up my car. If it's such a great system, you should have no problem with that.

 

Despite these oil apologists' explanations, I still say there's no reason for gas to increase $1 per gallon in price during a five-month span. None.

 

Oil is definitely a product that is market driven. However, and this is pretty big, it isn't in the same mold as sneakers or Special K cereal. The intake of oil can be reduced through actions such as moving within walking distance of work or uprooting yourself to a location that provides mass transportation to a new workplace. It can also be reduced through the purchase of smaller and more fuel efficient vehicles like motorcycles or a Vespa.

Now before you comment about how difficult this is and the job market and the whatever, I am in complete agreement. Those steps for reducing oil consumption cost in the thousands of dollars and this is why it is different than Nikes or Frosted Flakes.

Change in the way our economy treats oil requires a massive government undertaking as well as years of research.

First, the government needs to determine what the most efficient fuel source is going to be and then stick with it.

Second, the government will need to open up its own fuel stations for this fuel source or require any and all gas stations currently in existence to carry the alternative fuel source.

Third, the government needs to require manufacturers of automobiles to sell at an initial raio of 1:2 alternative fuel to regular gas cars. This ratio will increase over the course of time.

Fourth, marketing campaigns need to begin airing that stresses efficiency instead of horse power. Any and all advertising that chooses to denegrate the fuel efficient car as "too weak" or "getting passed on the highway" must cease.

Fifth, there needs to be new car purchasing options starting around $5K in order to allow those that do not have the money to purchase a larger, more featured alternative fuel car to afford one. I'm thinking something in the realm of the SmartCar (which I heard is coming to the US in a year or two).

Sixth, there needs to be a trade in option for cars owned or financed. The metal, the air bags, the tires, the rims, should be worth something. It would be a recycling plan for old gas-guzzlers.


I know some look at this and say, "Why is the government involved so much?" To answer that you need only understand that corporations look out for themselves. They cannot and will not change if they do not have to. Change costs money. Research costs money. If the government doesn't place everyone on one single standard you could end up with Ford using one type of fuel and Chevy using another.

I see no reason that this cannot be accomplished. You just need the right type of administration in place. You need someone with a backbone that is willing to make this an issue.