Gas!

[PeteOz77]

It's not really that simple. Supply clearly exceeds demand, since nearly every pump is always open at every gas station, and almost every gas station is open 24/7. Also, oil companies are recording record profits during a time when the rest of the (US) economy is on its way to the crapper. Indeed, it's a simple economics problem, but it's not a supply/demand example. It's more of a monopolistic model. When there are relatively few suppliers of an extremely high demand product, those suppliers can, in essence, charge whatever they damn well please. Those in demand of the product wind up getting screwed, so long as they find it necessary to buy. Since most of us aren't in a position to significantly cut our gas consumption, we're stuck. The sensationalism of oil issues by the media only serves to rationalize the oil companies' price increases.

+1

The media is "Fueling" the problem

 

[NitrouStang96]

. . . figured it's better to laugh about it than to cry . . .












*sniff* I'm surely going to be paying $5/gal for premium this summer.

 

[Desert_Sky]

this is one of the main reasons i ride a motorcycle.

60mpg baby

 

[RichBrewer]

I'll be digging my bicycle out this weekend!

 

[EvilTOJ]

Don't worry, gas prices will start dropping after the weekend. It happens every year. Gas prices spike up to Memorial Day weekend, then "mysteriously" start falling until halfway between Memorial Day and Labor Day.

What a scam.

 

[capcrnch]

We have a gas station across the street from my shop where we fill up all the time..
They gave us a warning yesterday (as we paid 4.01) that we should fill up all our tanks now, because this weekend they'll be over 4.35

 

[JustDave]

Remember when gas was over $2 and these things came out?

$2.33 would be great right now.

 

[Evan!]

Don't worry, gas prices will start dropping after the weekend. It happens every year. Gas prices spike up to Memorial Day weekend, then "mysteriously" start falling until halfway between Memorial Day and Labor Day.

What a scam.

A "scam" involves fraudulent actions in order to trick someone.

Raising prices in times of higher demand, on the other hand, is called "economics". There's a difference between supply-demand and a "scam". There's nothing "mysterious" about it, and there's nothing dishonest about it. If you owned a goddamned ice cream shop at the beach, it would only make sense to charge more for your product during the summer months.

What I'm really sick of in this country these days is this persistent whining about gas prices breaking $4/gal. It's been like that in most of the world for years. Oh, but we're special! It's a scarce commodity, that is limited...and the fact that we're still driving around in big 10mpg cars is testament to a sad reality: as much as we whine about it, we're not really willing to do anything about it except whine. No, instead, we expect the oil companies to just give their product away for less than people are willing to pay for it. Well, let me ask you this: if you were selling beer, and you charged $10 per six pack, and people were buying it hand over fist at that price, would you just suddenly drop your price to $8 per sixer because some people whined about it?

 

[EvilTOJ]

Evan!, I'm not whining about gas prices, I'm talking about how it's funny(in a conspiracy theory sorta way) that every year gas prices skyrocket until Memorial Day then the next week they start to drop. I noticed it about 5 years ago and it's happened every year. Sounds like deliberate plotting of The Man to me. OK fine, it's a conspiracy, not a scam. Happy now?

Of course now that I've run off at the mouth about it it won't happen at all this year!

 

[keiths]

Evan!, I'm not whining about gas prices, I'm talking about how it's funny(in a conspiracy theory sorta way) that every year gas prices skyrocket until Memorial Day then the next week they start to drop. I noticed it about 5 years ago and it's happened every year. Sounds like deliberate plotting of The Man to me. OK fine, it's a conspiracy, not a scam. Happy now?

!

+1.................................

 

[MrFebtober]

Very well put, Evan!, except that for the first time I think people are starting to adapt (though still whining about it). Take my stick-in-the-mud father-in-law: he's always been proud of his stable of full size trucks. When I first met him, he and his wife shared a 4x4 Sierra, a Tahoe, and a Suburban (he has a picture of the three of them on the wall). Well, last month he bought a Corolla! Even his wife says he looks silly getting in and out of "that tiny car," but I find it commendable he did a sensible thing. He lives on a small farm out in the country, so he'll always have a working truck (and thats great; that's what trucks are for) but now he's planning on selling the 'burban and tahoe because he's finally realized how absurd they are for their current situation (empty nested, living 20 miles from _everything_).

Now, i realize this is anecdotal but my FIL is actually a pretty decent barometer as far as stubborn 'mericans go. He's like Fox News incarnate.

 

[Evan!]

Evan!, I'm not whining about gas prices, I'm talking about how it's funny(in a conspiracy theory sorta way) that every year gas prices skyrocket until Memorial Day then the next week they start to drop. I noticed it about 5 years ago and it's happened every year. Sounds like deliberate plotting of The Man to me. OK fine, it's a conspiracy, not a scam. Happy now?

Of course now that I've run off at the mouth about it it won't happen at all this year!

I'm not directly addressing you. It's more of a general rant at all the bitching and moaning that I see at every turn.

It's got nothing to do with "the man", though. It's "the market", and yes, it's deliberate---because oil companies are, get this, in it to make a profit. Increased demand? Increased price. Simple market economics. Charging $7 for a bud light at a baseball game is a deliberate attempt to cash in on the increased demand and limited supply. But nobody claims that's a conspiracy by "the man".

 

[EdWort]

Don't forget to add that the price we pay is because we elect people to office who think they know better and that we should not be drilling for our own oil because it will hurt a salamander or a couple oil rigs on the desolate barren tundra the size of South Carolina, or off the coast of Florida (while China is drilling off the coast of Cuba).

Yes, we have only ourselves to blame for high gas prices because we allow the politicians and the lobbyists that line their pockets to prevent us from using our own resources. The end result is this.

Next month, I'm predicting I'll hit the $100 figure at the pump and this is just for regular 87 Octane in Austin.

 

[RichBrewer]

Well, I tell you what, they are reducing the demand for gasoline in my life! I already own a Corolla which gets 33MPG in the city and I will start riding my bike to work.
To look at things on the bright side, maybe the price increase will reduce the United States dependency on foreign oil. Not only that, maybe it will help clean up the air!

 

[Evan!]

Don't forget to add that the price we pay is because we elect people to office who think they know better and that we should not be drilling for our own oil because it will hurt a salamander or a couple oil rigs on the desolate barren tundra the size of South Carolina, or off the coast of Florida (while China is drilling off the coast of Cuba).

Yes, we have only ourselves to blame for high gas prices because we allow the politicians and the lobbyists that line their pockets to prevent us from using our own resources. The end result is this.

Next month, I'm predicting I'll hit the $100 figure at the pump and this is just for regular 87 Octane in Austin.

While I agree with your general sentiment, all the info I've seen shows the ANWR reserves being a pittance----certainly not enough to affect our price at the pump in any meaningful way.

Hey, Ed, what are you driving? A bus?

 

[EdWort]

I have a Chevy Tahoe Z71 used for pulling a horse trailer and Boy Scout Trailer and a Saturn SW2 (which gets almost 40 MPG on the hiway).

 

[FlyGuy]

What I'm really sick of in this country these days is this persistent whining about gas prices breaking $4/gal. It's been like that in most of the world for years. Oh, but we're special! It's a scarce commodity, that is limited...and the fact that we're still driving around in big 10mpg cars is testament to a sad reality: as much as we whine about it, we're not really willing to do anything about it except whine. No, instead, we expect the oil companies to just give their product away for less than people are willing to pay for it. Well, let me ask you this: if you were selling beer, and you charged $10 per six pack, and people were buying it hand over fist at that price, would you just suddenly drop your price to $8 per sixer because some people whined about it?

We are really feeling it up here now, too. By Canadian standards, the price of gas is cheap here in Calgary at $1.25/L ($4.75/gal). I also see Rogue and Flying Dog six-packs at the liquor store for $20.50. (Canadian dollar and US dollar are within one cent of each other right now, for reference.)

I can buy into the reduced consumption idea for saving on fuel. But it is the reduced consumption of beer that I am having trouble with!

 

[Evan!]

We are really feeling it up here now, too. By Canadian standards, the price of gas is cheap here in Calgary at $1.25/L ($4.75/gal). I also see Rogue and Flying Dog six-packs at the liquor store for $20.50. (Canadian dollar and US dollar are within one cent of each other right now, for reference.)

I can buy into the reduced consumption idea for saving on fuel. But it is the reduced consumption of beer that I am having trouble with!

whoah, let's be clear here: nobody is suggesting reducing your beer consumption.

 

[EdWort]

While I agree with your general sentiment, all the info I've seen shows the ANWR reserves being a pittance----certainly not enough to affect our price at the pump in any meaningful way.

Perhaps, but we still have huge reserves off the coast and even in North Dakota.

America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant.

The price will come down soon as it is now so high that other countries are looking at alternatives that have all of a sudden become affordable compared to $130/barrel crude from OPEC.

 

[EdWort]

Not to worry though, our esteemed politicians are going to take those evil profits away from the evil oil companies.

Congressman Proposes that Government Establish a "Reasonable Profits Board"

by Gerald Prante
The current high price of gas has led to a lot of crazy proposals from gas tax holidays to creating a tax deduction based upon energy consumption. But Rep. Paul Kanjorski's (D-PA) may top them all in terms of its stupidity. From the Times Leader, Kanjorski's plan would do the following:

• H.R. 5800 would tax industries’ windfall profits.
• The bill would set up a Reasonable Profits Board to determine when these companies’ profits are in excess, and then tax them on those windfall profits.
• As oil and gas companies’ windfall profits increase, so would the tax rate for those companies.
• Kanjorski said his legislation will encourage oil companies to lower prices to prevent them from receiving higher tax rates.
​

While Hillary Clinton may have failed ECON 101 along with John McCain, it appears as if Kanjorski may been enrolled in Marxism 450 at the time. In all honesty, nationalization of the oil industry (i.e. Venezuela) may be better than Kanjorski's ridiculous proposal.
One can make a case for taxing that portion of the return to capital that comes from economic rents, but Kanjorski has probably never even heard the term. An economist who backed such a tax would understand that such a tax is not going to lead to lower prices at the pump, just as economists are setting the record straight on the current gas tax holiday gimmick. Furthermore, the justification for taxing economic rents would apply to all sectors, not just petroleum.
Members of Congress and the American public need to understand that no tax cut or tax hike in the short-term is going to lower the prices at the pump. And any tax hike is going to raise prices in the long-term. Raising taxes on energy is not all bad, however. While any tax hike has its costs, raising taxes on gasoline does lead to less pollution (indirectly whereas a carbon tax is more direct) and greater funds for transportation (assuming they are spent in the right way which is unfortunately not always a safe assumption).

 

[Evan!]

Not to worry though, our esteemed politicians are going to take those evil profits away from the evil oil companies.

Kanjorski said his legislation will encourage oil companies to lower prices to prevent them from receiving higher tax rates.

Wow, really!? That's beyond failing econ 101. That's failing Common F*cking Sense 101. Yeah, douchenozzle, they're gonna lower their prices to avoid higher tax rates.

They'll never just cut back the supply lines. Oh, no, never. :cross:

The stupidity of some people just blows me away.

 

[Ryan_PA]

It's not really that simple. Supply clearly exceeds demand, since nearly every pump is always open at every gas station, and almost every gas station is open 24/7. Also, oil companies are recording record profits during a time when the rest of the (US) economy is on its way to the crapper. Indeed, it's a simple economics problem, but it's not a supply/demand example. It's more of a monopolistic model. When there are relatively few suppliers of an extremely high demand product, those suppliers can, in essence, charge whatever they damn well please. Those in demand of the product wind up getting screwed, so long as they find it necessary to buy. Since most of us aren't in a position to significantly cut our gas consumption, we're stuck. The sensationalism of oil issues by the media only serves to rationalize the oil companies' price increases.

Huh. I'd-a-thunk you were a republican, yet these sound like democrat words.

 

[kornkob]

It's not really that simple. Supply clearly exceeds demand, since nearly every pump is always open at every gas station, and almost every gas station is open 24/7. Also, oil companies are recording record profits during a time when the rest of the (US) economy is on its way to the crapper. Indeed, it's a simple economics problem, but it's not a supply/demand example. It's more of a monopolistic model. When there are relatively few suppliers of an extremely high demand product, those suppliers can, in essence, charge whatever they damn well please. Those in demand of the product wind up getting screwed, so long as they find it necessary to buy. Since most of us aren't in a position to significantly cut our gas consumption, we're stuck. The sensationalism of oil issues by the media only serves to rationalize the oil companies' price increases.

It's not even that simple: oil is traded as a commodity so there is an added component to the problem when people are speculating on what the prices will do.

Furthermore, the way the value of oil is compared is based on the US dollar, which has become a very volatile currency of late and this skews the results in dramatic ways.


I haven't done the math, but I'd venture to guess that a large portion of the 'rise in gas prices' is attributable directly to the drop in US Dollar value.

And I'll say it again: 'record profits' is meaningless as 'record opening movie weekend' because it is only a record in terms of dollar amounts. In terms of return on investment those 'record profits' are rather mundane, even poor if you also consider the drop in the value of the dollar.


/for the record: not a republican
//also not a democrat
///no party affiliation-- just a guy who thinks instead of self applying labels

 

[dblvsn]

douchenozzle

That's a new one for me. I think I'll call my boss that later today!!

 

[RICLARK]

Think gas prices are bad? Try Owning your own semi right about now, I know three guys that just put for sale signs in the window because they cant afford it.

 

[EdWort]

More news on our uber intelligent politicians who know better for us.

[FONT=times new roman,times]Senator Chuck Schumer claims that coercing Saudi Arabia to increase oil production by 1 million barrels a day would drop the per barrel price by $25, saving Americans 62 cent per gallon at the gas pump. Yet, somehow, that same amount of oil coming from Alaska's Arctic National Wildlife Refuge would only ease oil prices by a penny.[/FONT]

[FONT=times new roman,times]In a Senate floor speech he gave on May 13th, the New York Democrat [/FONT][FONT=times new roman,times]insisted[/FONT][FONT=times new roman,times] that:[/FONT]

[FONT=times new roman,times]"If Saudi Arabia were to increase its production by 1 million barrels per day that translates to a reduction of 20 percent to 25 percent in the world price of crude oil, and crude oil prices could fall by more than $25 dollar per barrel from its current level of $126 per barrel. In turn, that would lower the price of gasoline between 13 percent and 17 percent, or by more than 62 cents off the expected summer regular-grade price - offering much needed relief to struggling families. "[/FONT]
​

[FONT=times new roman,times]Schumer repeated these words almost verbatim when grilling oil company executives during yesterday's Senate Judiciary Committee hearings.[/FONT]

[FONT=times new roman,times]Yet Schumer's daily magic number of 1 million barrels is the exact increase experts believe we would today be pumping through the Alyeska pipeline had Bill Clinton not vetoed ANWR drilling back in 1995. And even the most rabid anti-domestic-drilling Democrats don't take issue with that figure. [/FONT]

[FONT=times new roman,times]So then, the increase he demands of "Bush's friends," the Saudis - which he claims would reduce prices by up to 25 percent -- is the exact amount he [/FONT][FONT=times new roman,times]argued[/FONT][FONT=times new roman,times] earlier this month would only "reduce the price of oil by a penny" were it coming from ANWR - eco-sacred breeding ground of the Porcupine Caribou.[/FONT]

[FONT=times new roman,times]It doesn't take a Ph.D in economics to know that both figures can't be right.[/FONT]

 

[WeHeavy]

From what I understand it has more to do with the weak dollar than supply and demand.

The weaker the economy gets the weaker the dollar gets the more money is being pulled out of the stock market and put into black gold which is paying a higher rate of return than gold gold.

And even though the oil company's are sitting on top of a mountain of cash every quarter, and all the experts say that theres no shortage of oil, they still have to buy extra oil on the open market to make gas, and the true price of gas isn't being reflected at the pump because the demand is below predictions for this time of year.

Whats throwing a monkey wrench into the equation is gas is becoming cheaper for other nations because oil is bought in US dollars which has become cheap to get. SOOO they can afford more.

I think right now America and others Nations are in a catch 22 and we're all taking it in the A%%

Did you know also that oil has gone up 400% since Bush took office. I look for the price to come down after He's out of office.

 

[devaspawn]

In Venezuela they are paying ~$3 a TANK to fill up SUVs.

 

[RICLARK]

Fact of the Matter is, Oil will never come down until more refineries are built, The value of the dollar goes up and we drill the oil we have in our country.

 

[bethlehembrewer]

While I agree with Evan and the economics of the situation. I also think it is a bit of a scam/ conspiracy theory on the part of car manufacturers. There is technology out there which can increase the MPG for any car to well past what we have currently. To which I ask this question. Since the oil companies are raising prices because of "supply and demand", what are the car manufacturers doing? They have the technology to increase MPG for any car, yet they chose not to. I don't think anyone can claim supply and demand on their part. You can say the technology would cost more which I agree with, but Im sure it wouldnt break the bank. They are now starting to feel the crunch. Yesterday Ford announced they are not going to produce as many trucks and SUV's. We'll it took them long enough to catch on.

If we really want things to change then we could use a variety of things make this happen. Ride a bike, refuse to buy gas for a week or two (no demand there), carpool, don't buy gas guzzlers, everyone could negotiate the price of gas(far fetched I know) but negoitation is something everyone used to do when obtaining goods, demand or rather get involed in ways to change the energy we use for transportation.

Just a thought.