[ny32182]

I have no idea how widespread this is. I know that gas stations in the triangle between Greenville SC, Columbia SC, and Charlotte NC are shutting down right now. If you live in this area, heads up... go fill up your car right now. And expect a big line to wait in.

[HighVelocity]

I wonder if they're not getting fuel deliveries because of refinery shutdowns.

[Zrex]

Internet Rumor Sparks Gas Grab (http://http://www.local10.com/news/4918480/detail.html)

SOUTH FLORIDA -- A bogus e-mail rumor sparked a run on South Florida gas stations Tuesday night that left at least one station dry.

Local 10 News received numerous calls from viewers saying that the e-mail said gas stations would close at midnight and remained closed two to three days. Local 10 News confirmed that the rumor is false.

[LiquidTension]

I filled up this morning after I got off ~0730. I paid 2.49. Last I checked, the same station was up to 2.99. The problem is that people bought into the urban myth that prices were going to go up so they all flooded the gas stations. Naturally, this rush is what caused prices to go up since the shortage hasn't really hit yet. Self-fulfilling prophecy :banghead:

edit:

To keep this gun related, how long do you think it'll be before people start fighting over pumps....and could muzzle blast ignite gas fumes?

[sumpnz]

and could muzzle blast ignite gas fumes Yeah, probably. But unless there was an open pool of gas the worst you might get is a brief flash, and for even that to occur you'd have to be firing pretty close to the source of the fumes.

[Waitone]

The longer I observe life in these United States the more I am convinced that our irresponsible, lazy, uninformed, and overly aggressive media is doing far more damage than good. The problem is exaggerated during times of duress like terror events and natural disasters.

To what do I refer? Media has consistently said "Oil is now trading at a record price of $xx per barrel." Wrong O, media. Futures contracts are trading at $XX per barrel. Delivered prices based on existing contracts is somewhat lower. Do everyone a favor and report facts. It may require you to look at two numbers and maybe do a long division, but at least you won't be whipping up chaos.

<These people make me sick with their laziness.>

[frenchwrench]

Unleaded regular is at $3.20 a gallon in Ft Wayne Indiana. Time to ride the motorcycle.

[Coronach]

Whenever there is a major world event, a significant portion of the population goes to fill up their gas tanks. This is human nature and, frankly, I do it, too.

Anyone knows what happens if most of the USA goes to the pumps on one day and tanks up?

Shortages. Now, is this a real shortage? No. But suddenly all the sheep realize that the tanks at the gas station are not bottomless, and that there is a real potential for a short-term shortfall. Suddenly, everyone is buying gas cans and hoarding what gas is left.

Couple this with the very real mid-term shortfall that Katrina's damage will cause, and you have a serious panic situation in regards to gasoline. This is why gas stations are driving their prices up now, because price moderates demand. If you go to the gas station, intent on topping off your car and filling up a few five-gallon cans and see prices of $3.00/gallon, you will probably go "Uhm...maybe not", unless the sitaution is really bleak. The price hike is a way of keeping the supplies we have availiable to those who really need it (read: those who will pay) and generally smoothing over the whole crisis.

I don't like the price hikes- my truck has a 25 gallon tank and I get 15 mpg. But I recognize them as a necessity.

Mike

[HighVelocity]

I own my own business and have 3 trucks. I topped them all off on Sunday. Total about 140 gallons. :banghead:

[Lone_Gunman]

Gas prices this morning were around $2.65, and are now $3.01...

There are currently lines at all the stations down here, and the local news is reporting there has been a "gas panic" because of the disaster in New Orleans... is this happening anywhere else, or have people here just gone crazy? Are we being gouged by gas retailers? A 36 cent per gallon increase in 12 hrs seems a bit much!

[dasmi]

Hmm, for once San Diego won't lead the nation in gas prices.

[Standing Wolf]

...our irresponsible, lazy, uninformed, and overly aggressive media is doing far more damage than good. The problem is exaggerated during times of duress like terror events and natural disasters.

They'll continue to behave badly until we ignore them.

[Waitone]

How long before some economic ignoramus says, "Hey, we need gas rationing."

I'll wager we'll hear it tomorrow.

Having been through the Nixon, Ford, and Carter oil shocks, I want nothing to do with it.

[Greg L]

Cincinnati area:

$2.65 on the way to the Dr.'s office this morning, $3.09 on the way home :( .

[kbr80]

2.94 regular unleaded in Arkansas, at the cheapest place in town, wally world.

[Jeeper]

Gas pricing has always bothered me. If they bought the supply that is in their current tanks underground at a certain price then why should it go up before they get the next higher priced supply?

[gulogulo1970]

Regular unleaded yesterday in Dallas: $2.59, Today: $3.00.

Predictions of $4.00 gas by Monday. Glad I drive a Honda Civic, even so, it's taking a big bite out of my desposable income.

Inflation is going to come back in a big way if this keeps up!

[GhostRider66]

Just got off the phone with my wife. She said that some stations in Atlanta (where daughter lives) are gouging....$5.54/gallon. Dear Lord!

[Stoney]

$ 3.09 to $ 3.25 in central Ohio. Get use to it, it's going to be this way for some time. :eek:

[dolanp]

There is a station in Dallas selling at $3.09 but most stations are still below $3.

[Standing Wolf]

Well, yeah, but there's no evidence of irrational panic.

[Zrex]

$2.59 at some gas station on Valley Mills in Waco. Wife says it was busy, but prices are where they were this morning.

[M-Rex]

I'm leaning out my office window here in Northern California. The gas station just posted $3.01/99 per gallon for regular gasoline.

[mussi]

OK....

1 US gallon is 4.54 litres.

You pay 3 US-$ per gallon, which makes it 3/4.54, or something like 66 cents per litre, or 82 Swiss centimes.

However, we pay 1.65 for 95 octane.

In other words, if you really want expensive fuel, come to Europe.

[Luchtaine]

Sounds like Gougeing to me, especially since the price per barrel went down when they announced the release of some of the strategic reserves.

I haven't gone to the gas station today so I can't tell yaq if anythings going on here. Course they are probably just saying oh hey look our prices have just been justified. some areas were over 3 dollars already arond here.

[Waitone]

Nope, fed.gov will not let inflation numbers go up. See, lots of fed.gov programs payouts are based on government generated inflation figures. It is in fed.gov's own interest to diddle the figures and keep the numbers down.

Its been going on since Nixon, was developed into a art form during Clinton, and revised and extended by Bush.

Governments lie.

[wQuay]

The longer I observe life in these United States the more I am convinced that our irresponsible, lazy, uninformed, and overly aggressive media is doing far more damage than good. The problem is exaggerated during times of duress like terror events and natural disasters.


ROFL. I was just watching "Orwell Rolls in his Grave" which covers this exact topic.

[Zrex]

In other words, if you really want expensive fuel, come to Europe.
What is the price per litre when you take away the taxes?

[wingman]

Greed, simply greed, huge profits in short periods and the consumer get's it
in the ***. :cuss:

[Lex]

Gas was $2.49 three days ago...now $3.00 here!

I wish Bush (or ...fill-in-the-blank) would set a year 2020 deadline that no more gas powered cars were to be made....go Hydrogen or some other source.

Then, tell OPEC to feed all of that (non-commodity) oil to their babies....we don't need it anymore!

Something's gotta give!!

Lex in NC

[dasmi]

Price per barrel is currently $68.90, according to Bloomberg, which is LESS than yesterday.

[HogRider]

1 US Gal equals 3.785412 Liters

http://img36.imageshack.us/img36/5531/converter6tf.jpg

[rick_reno]

In other words, if you really want expensive fuel, come to Europe.

How many of your brave soldiers have died in the middle east protecting the oil supplies?

[sumpnz]

1 US gallon is 4.54 litres.

You pay 3 US-$ per gallon, which makes it 3/4.54, or something like 66 cents per litre, or 82 Swiss centimes.

However, we pay 1.65 for 95 octane.

In other words, if you really want expensive fuel, come to Europe.Nope. 1US gal = 3.78 liters.

Works out to about 100 centimes.

You used (I think) the conversion factor for Imperial Gallons.

[Lone_Gunman]

I was just watching the Atlanta news. Apparently, Georgia is in a state of panic right now over gasoline.

Some stations in Atlanta are reported to be charging $6/gallon!!!

[Jeff Timm]

1 US gallon is 4.54 litres.

I suspect that is an English Imperial Gallon.

Geoff
Who doesn't have his conversion tables handy.

[Coronach]

Gas pricing has always bothered me. If they bought the supply that is in their current tanks underground at a certain price then why should it go up before they get the next higher priced supply?Read my response, several posts up.

That's why.

Mike

[Coronach]

Oops! Wrong thread! :rolleyes:

hang on...

Mike

[Coronach]

OK. I merged multiple threads re: Gas prices, and then moved it to L&P.

Mike

[R.H. Lee]

The price hike is a way of keeping the supplies we have availiable to those who really need it (read: those who will pay) and generally smoothing over the whole crisis.
Thanks, Mike. That's the best whopper of the day.

[alan]

I might be wrong, but didn't there used to be laws regarding PROFITEERING?

Also, and re this I might also be wrong, but how would you like to be the proverbial FLY ON THE WALL of oil company board rooms, where decisions concerning which refineries will be closed are made, this respecting the shortage of REFINERY CAPACITY that we lately are hearing about, being a driving force behind price spikes.

Finally, there is one more thing that I've always been curious about. Fuel prices, believe it or not, go down as well as go up, and sometimes they simply go sideways. When they go up, they move like that proverbial rocket, while when they go down, they move sloooowly.

When one asks about this seeming discrepancy, they are told something about the need for things to "work through the system". Fair enough, but how come working through the system goes much faster re upward movement than it does respecting downward movement?

As a nearby Sunoco station, don't know if it's "company owned" or a private operation, regular grade was priced at 2.50/gallon, rounded off to the nearest whole cent on Monday. Yesterday afternoon, the pump price was 2.60, and this afternoon, it was 2.86. By the way, the above price movements applied to what I strongly suspect was gasoline already in the astation's tanks.

[Tom Servo]

In other words, if you really want expensive fuel, come to Europe.
How very true. I was last in Denmark in 1996, and I did some back-of-the-envelope calculations. It was $3.71 or so. At the time, it was $1.18 in the States.

I don't mean to pour salt in the wound, but we've had it easy for a couple of decades when it comes to gas prices. Imagine if they'd kept up with inflation. More than $3.00/gallon,easy. We still have the lowest prices in the 1st World, and people bitch no matter what the price. We've had countless opportunites to switch to alternative fuels and such, but what do I see hundreds of times in my morning commute? 2-ton plus SUVs that get 11 miles/gallon carrying one person each.

I guess it's just easier to whine than change.

[LSCurrier]

I just filled my car up on the way home from work. I saw several gas stations change their prices today to as much as $3.20 per gallon. I saw my gas station still at $2.89 and figured I better fill up now.

The gas companies are going to wring us for every last penny!!

Luke

[gm]

it IS a scam...it is gouging and theres nothing anyone can do about it but watch everything that delivered by truck go up too cause they arent going to take a bigger hit on fuel than they already have.

it all is going to trickle down to the low wage factory workers who drive 40 miles to work each day. Im sure bussing from schools will have to be paid from somewhere...taxes? one might say that the increase isnt much but consider that there already are many people barely getting by.


nothing like another jab to the ol economy(gasp)...while we import labor and export jobs. :cuss:

[alan]

Erik F:

I will not presume to dispute the prices you quoted for gasoline in Denmark, where I once, very breifly visited. While I once upon a time lived and worked in Western Europe, England, Holland and West Germany, that was a long time ago.

That having been said, ABSENT THE TAX COMPONENT, INCLUDED IN THE PUMP PRICE, gasoline in Europe might cost less than it does here. In this country, the bulk of the pump price goes to the oil companies and refiners, while in Europe and other places too, the bulk of the price at the pump are taxes, paid to the government.

[LAR-15]

As said we still have it good compared to Europe except yes most of that is taxes.

[mussi]

It's still the end result that matters, and this means we pay quite a bit more.

[Frandy]

Passed three stations in the Raleigh area on the way home around 5pm: regular was 3.11., 3.01, 3.11. These stations are usually 3-5 cents lower than many other places in Raleigh.

[wmenorr67]

$2.89 a gallon today here in Tulsa. Up from $2.56 on Monday. As for opening the oil reserves it won't help if there is no place to refine it. The last I heard at least 8 refineries are shut down on the coast.

[Coronach]

Thanks, Mike. That's the best whopper of the day.Care to elaborate on why you think so?

Mike

[MachIVshooter]

1 US gallon is 4.54 litres.

1 US gallon is 3.78 liters. (1 quart=946ml)

So our current average here is somewhere around $0.80/liter.

[R.H. Lee]

Care to elaborate on why you think so?
I think you're attributing altruistic motives to what amounts to no more than avarice. Looting at the pump. These price gougers aren't interested in anyone but themselves; they're exploiting the situation and the misery of others.

[Jeff Timm]

The fact remains, in the infinite wisdom of Washington DC. Every little area of the country has its own special formula of gasoline. Which according to critics, are totally worthless in controlling pollution, as two identicle cars burning the different blends, will indicate no appreciable difference in output.

The idiots just waived the requirement. The Democrat Communists will slur the administration and all Republicans for polluting the environment and causeing the hurricanes by not signing an idiot agreement which requires the US of A taxpayer to send billions of dollars to 4th world dictators, so they can pay too much for French hookers.

We don't have any new refineries in this country, because the EPA changes the rules so fast you can't build one that meets the Regulations!

Geoff
Who wants standardized national Fuel requirements, two nuclear standard power plants in every state (high ground please) and drilling in all available areas of the US of A. :fire:

[Waitone]

Yep, 8 refineries in Louisiana shut down.

Little and generally unknown factoid I just rooted out: did you know that 4 of the refineries where throttled back to 40% capacity to satisfy the demands of the EPA?

Lemme see here.
--No refineries built in 25+ years to safisfy environmental demands.
--40 + blends of gasoline to satisfy environmental demands
--At least 4 refineries throttled back to satisfy environmental demands.
--Can't drill in ANWR to satisfy environmental demands
--Areas off FL, SC, NC, CA, OR, and WA off limits to satisfy environmental demands.

Does anyone see a pattern here?

Maybe this disaster will put a shiv into the ribs of the radical environmentals. It is well past time.

[Coronach]

I think you're attributing altruistic motives to what amounts to no more than avarice. Looting at the pump. These price gougers aren't interested in anyone but themselves; they're exploiting the situation and the misery of others.On the contrary. This is avarice personified, but not in the way you think. The RETAILERS are the ones setting the prices, and it is in their best interests to NOT RUN OUT of gas. No gas, no money from gas, no one coming to your store, and no sales on overpriced crap in your convenience store.

This is, in fact, an area in which avarice and the common good run hand in hand (which, not incidentally, is more common than you think, since captalism is basically the harnessing of human greed for the benefit of all). We need gas. The gas retailers need to sell us gas. No gas, no money.

Are they making money in the meantime on elevated gas prices? Of course. They're charging more. But they recognize that if they run out, they make no money whatsoever. So it is in everyone's best interest to make sure that they do not run out. This is simple supply and demand. Demand has gone up. Supply has remained constant (for the moment). Ergo, price will rise.

Retailers make money by having a steady, profit-generating state where supply and demand are balanced, and they make a cut. This wildly disrupts that, and causes them to exhaust their supplies, which means they make more loot while they have gas, but they are looking at a dry spell where they will have none to sell, and make no money at all. This is an effort on their part to avoid that dry spell, using the only lever they have, control of the price.

Mike

[R.H. Lee]

I dunno, Mike. People in any given area are only going to buy so much gas whatever the price. That is why 'gas boycotts' never work. Whatever you don't buy today, you'll buy tomorrow or the day after. Retailers know that; they might also know that the oil companies, through their distributors, might crimp supplies to support even higher prices. Maybe that is what you're referring to.

[Sindawe]

I've not been able to confirm it yet, but when my boss got back from lunch today, he commented that he'd heard on the glass-teat that President Bush had directed the EPA to rescind the restrictions on regional formulations for gasoline, so that gasoline brewed for one market (say California) could be shipped to regions that have been hit by Katrina.

[Waitone]

In the mid-90's I managed a manufactured commodities business. During one year severe shortages of critical raw materials developed. Shortages were caused by natural disasters, refineries burning, and international demand is high. Sound familiar. Anyhow, in a period of 4 months we saw the reversal of 7 consecutive years of raw material price decreases. It was an astounding run up in costs. We cancelled or renegotiated prices. Our gross margin (short line profitability) increased to 3 times its normal level. Prices were high because I made prices high. We had product and our competition did not.

The whole time prices and profitability were high I cautioned the organization that when raw materials shortages were over market pricing would correct to historic level and it would correct fast.

It happened exactly that way. Once raws were available market prices corrected fast and there was nothing I could do to stop the slide in pricing. It took 4 months to erase raw material price decreases. It took 6 weeks for prices to collapse back to historic norms once raw shortages were resolved.

Please note Steve Forbes says oil will be $35 / Barrel in one year.

Prices are high but they will drop just as soon as shortages are solved. What we have to do is keep firmly in mind the source of those shortages and take our anger out on those who are responsible for structuring shortages. . . .environmental nazis and their congressional toadies.

[Coronach]

I dunno, Mike. People in any given area are only going to buy so much gas whatever the price.No, because in times like these, people horde. Demand is not constant, it has risen, sharply. Ever gone to a grocery store before a major snowstorm? Do you honestly believe people need all that milk, bread and bottled water? Well, they buy it, and grocery stores are cleaned out.

Note: they generally don't raise their prices, either. And they get cleaned out. Hmm!

People will go out and fill up every gas can they have (and maybe buy more) if they think the gas supply will be interrupted and prices will soar to $6 per gallon. Jacking up the price $0.40 cents right away is an attempt to curb that impulse, thus reducing the spike in demand. This will make the on-hand supplies last longer and prevent a very real shortage, which would in turn then freak EVERYONE the heck out, and cause a run on the pumps as soon as they get new supplies. Repeat vicious cycle.

Read the news reports. The retailers are telling everyone to calm down and NOT BUY GAS. This tells me that they have an keen interest in not running out of gas. They have only two ways to do this:

1. Ration.
2. Jack up the price.
Whatever you don't buy today, you'll buy tomorrow or the day after.
They won't be buying it if it isn't there to be sold. This is an effort on the retailer's part to have stuff to sell.
Retailers know that; they might also know that the oil companies, through their distributors, might crimp supplies to support even higher prices. Maybe that is what you're referring to.I doubt that the oil industry will be crimping anything. Katrina threw a huge crimp in the system already.

Mike

[HogRider]

OK here we go: Just filled up my bike. Chevron in North Phoenix. First time I have EVER paid over 3 bucks/gal. $ 3.19 for 91 octane stuff. :cuss:

[owen]

If the retailers don't sell the gas they have at the current market price, they may not be able to buy a full tank when they run dry. That is why gas stations sell at the current market price, not the price they paid.

There are emails going around from the Governer of NC, urging people to not buy gas, becasue the pipelines supplying the southeast are non-functional.

Supply drops, demand increases, price rockets.

That's economics

[riverdog]

Truck stops ration fuel (http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=46075) It's already started.

[Frandy]

State of North Carolina
Office of the Governor

Michael F. Easley
Governor


Release: IMMEDIATEContact: Sherri Johnson
Date: 8/31/2005Phone: (919) 733-5612


STATEMENT GIVEN TODAY BY GOV. EASLEY CONCERNING GASOLINE SUPPLY IN NORTH
CAROLINA


Raleigh - THE TWO MAJOR PIPELINES THAT FURNISH GASOLINE TO MANY STATES,
INCLUDING NORTH CAROLINA, HAVE BEEN AFFECTED BY HURRICANE KATRINA AND ARE
CURRENTLY WITHOUT ELECTRICITY. THEY SERVICE NORTH CAROLINA AND 8-10 OTHER
STATES.

90 PERCENT OF OUR GAS COMES FROM THESE PIPELINES AND RIGHT NOW THEY ARE
NOT OPERATIONAL.

SUPPLIERS GENERALLY HAVE A WEEK OR SO OF SUPPLY. THEY HAVE BEEN SHUT DOWN
SINCE THE HURRICANE.

THE PIPELINES NEED ELECTRIC SUPPLY AND THE REFINERIES THAT PRODUCE
GASOLINE NEED TO MAKE URGENT REPAIRS ALSO ARE WITHOUT ELECTRICITY. THE
REFINERIES THAT PRODUCE GASOLINE NEED TO MAKE URGENT REPAIRS.

CONSEQUENTLY, WE DO NOT KNOW THE EXTENT OF THE PROBLEM, BUT WE DO KNOW
THAT THERE WILL BE A SIGNIFCANT LOSS OF GASOLINE IN THE SOUTHEAST, AT
LEAST IN THE SHORT TERM UNTIL THE ELECTRICITY IS RESTORED.

THIS IS NOT ONLY A STATE PROBLEM, THIS IS ALSO A REGIONAL AND A NATIONAL
PROBLEM. WE ARE HOPING THAT THE DEPARTMENT OF ENERGY WILL TAKE SOME
ACTION AS SOON AS POSSIBLE. I HAVE TRIED TO GET DIRECTION FROM DOE BUT
THEY HAVE NOT YET RESPONDED.

IN THE MEANTIME, I AM ASKING ALL NORTH CAROLINIANS TO CONSERVE GAS. SOME
STATIONS ARE ALREADY OUT. WAIT FOR MORE INFORMATION BEFORE MAKING LABOR
DAY TRAVEL PLANS.

WE ARE TAKING STEPS TO ENSURE THAT EMERGENCY VEHICLES HAVE THE SUPPLIES
THAT THEY NEED, POLICE, FIRE AND RESCUE.

I AM IMMEDIATELY SUSPENDING ALL NON-ESSENTIAL STATE GOVERNMENT TRAVEL. I
AM ASKING STATE EMPLOYEES TO CARPOOL WHEREVER POSSIBLE.

I AM ALSO ASKING ALL OUR CITIZENS TO BE SMART ABOUT THEIR FUEL
CONSUMPTION.

I AM ASKING THEM TO CARPOOL IF THEY CAN AND TO LIMIT NON-ESSENTIAL ROAD
TRIPS.

WE ARE NOT OUT OF GAS, BUT WE ARE RUNNING LOW.

WE MUST TAKE STEPS TO CONSERVE OUR RESOURCES WHILE WE LEARN THE FULL
EXTENT OF THE PROBLEMS AND WHILE WASHINGTON WORKS TOWARD A REGIONAL AND
NATIONAL STRATEGY.

WITH CAREFUL USE OF PRECIOUS FUEL, CONSUMERS CAN HELP US WEATHER THIS
LATEST STORM.

NORTH CAROLINA UNDERSTANDS HURRICANES. WE HAVE BEEN THROUGH THEM AND WE
KNOW THAT WE WILL WEATHER THIS ONE AS WE HAVE IN THE PAST. WE KNOW THEY
CAUSE DISTRUPTION. WE JUST NEED TO KNOW AS MUCH AS WE CAN AND PLAN.



Office of the Governor
116 W. Jones Street, Suite 202, Raleigh , NC 27603-8001
Phone: (919) 733-5612
Fax: (919) 733-5166
An Equal Opportunity/Affirmative Action Employer

[RangerHAAF]

Gas is being sold for between $3-5 per gallon, depending on what part of Atlanta that a person lives in and the pumps are drying up quickly.

[m0ntels]

Im sure bussing from schools will have to be paid from somewhere...taxes?

Breakfast table discussion here this morning said they were talking about charging the elem/hs students here $1/day to ride the bus...

Sometimes I'm a lil bit happy I dont have kids yet...

Randy

[R.H. Lee]

Looks like the southeast is taking the first hit. It's still under $3 here today.

[mole]

Just down the road from me in Comer, GA it was $3.80 for 87 octane around 5:30.

[Waitone]

NC has a law on the books that automatically increases gas taxes when prices rise over trip points.

<Scans the idiot governor's press release>

Nope, looks like he forgot to suspend the automatic tax increase on gas.

Whaddya know about that, The governor just got another tax increase.

[JMag]

I'm in Mobile and had to drive to Bay Minette today to find gas w/o waiting for hours here.

The Chevron refinery in Pascagoula was hit hard by Katrina and I understand it supplies up to ten percent of the regions fuel.

That ain't so good, folks.

Still, we here have to count our blessings, no matter how bad we think things are here. They are so much worse to our west.

My thoughts and prayers with those hit hardest.

[grampster]

As for the long term, Waitone has hit the nail. Environmental nazis have hamstrung the energy industry in several ways. They have managed to enact draconian laws and have also demonized the industry as well. Frankly, we need new and more refineries. We have coal reserves that stagger the mind. We have oil and gas offshore along our coasts and in the great lakes. Yet, the leftists have managed the prohibition of any careful exploitation of our resources. Technology exists to harvest this bounty, yet our politicians recoil in horror, terror and anger over the possibility that we tap our resources.

Perhaps now is the time we demand that our elected officials lay down their petty schoolyard political crap and get down to business to see that our culture and our lifestyle can be improved with a national energy policy that actually means something. Virtually anything coming out of Washington in the last 30 years has either been window dressing at best and at the worst, the toleration of letting a hysterical small group of zealots prepare us to be thrown back into the stone age. These same zealots then stand on the sidelines and throw stones when we lurch around the globe trying to protect our ability to use someone elses resources when we have the ability to walk away from that if we used half the intelligence the big bang, higher power or gaiia gave us.

For over 30 years we have been confronted with the reality that our daily life rests on the edge of a blade. Yet nothing has seriously been done other than argument, political posturing, lies and ad hominum attacks about virtualy everything that is meaningless and beside the point. Without energy everything grinds to a halt, period. Get a clue! To a halt. period. No food, no water, no clothes, no jobs, no shelter, no nothing. Turn on your TV.

Ford Motor Corp has an operating hydrogen, supercharged 4 cyl engine that works fine, is simple, clean, powerful and economic to operate. The tech has been available for a long time. Why is this engine not on the market? Well, because no one has begun to set up a distribution system of the hydrogen fuel. Why not? Cost? That's probably BS too. Instead we have the hybrid electric bowels that take between 7-9 years to become cost effective against a 30 mpg 4 cyl beer can veh w/auto tran, power steering, brakes and air for $12,000.00. By that time the batteries need replacing at about $3000.00 and the rest of the car is tired. Nuclear energy tech makes it safe, clean and we should be building them all over the country. Disposal of the spoils? Dr. Dixie Lee Ray had the answer to that 15 years ago. Enclose it in shielded heavy glass, put it in a rocket and shoot it down into the depths of the Pacific ocean where it is 5 miles deep and the muck is another 3 miles deep. It will keep in the shielded glass forever, and if some of did leak, do the math on the cubic miles of water and muck vs the amount of waste. Negligable. Read her book for details. "Trashing the Planet" is the title and it's tongue in cheek. Nuclear power could power up elevated, high speed mag lev trains hauling freight and passengers that criss cross the country using freeway rights of way. Ever heard anyone talk about this? Hell no. Why not? Ask the Green Party freaks.
If we had a rational national conversations about things like this, we could tell OPEC to choke on their oil. How about we pay close attention to the Western Hemesphere, cultivate those folks, play with open borders and maybe our kids may go to Mexico, Guatamala, Venuzuela, Paraguay etc some day to make their fortunes.
Sigh...........

[Sindawe]

+1 grampster. I'd buy one of Ford's H2 vehicles (or BMW's, or Honda's) in a heartbeat if they were on the frelling market. I'm watching these guys (http://www.switch2hydrogen.com/) very closely as well, along with another start up in Ohio whose name escapes me at the moment They prototyped an H2 Prius back in '02 IIRC, and are working in flexiable polymer photovoltaic cells.

Our "Leaders" have failed us. They will not lead, the refuse to follow, so its time for them to get out the freaking way.

[petrel800]

I drew a picture for the folks complaining about price gouging. This is basic economics, in a free market, there is no such thing as price gouging.

[R.H. Lee]

This is basic economics, in a free market, there is no such thing as price gouging.
Except we don't have a 'free market', the oil cartel has a monopoly.

[petrel800]

Except we don't have a 'free market', the oil industry has a monopoly.

Really, cause last time I checked you weren't buying oil, you were buying gas, and in the gas market we have Exxon, BP, Citco, Cononco, Shell . . .

Seems like a lot of good competition out there. There was a variety of prices to choose from today in Atlanta, the BP was $2.89 and had a line of about 50 cars trying to fill up. Exxon and Shell were $3.50 and $4.00 / gallon and had a line 2 and 3 cars deep. Today if you were willing to wait, it cost you $2.89, however, there was a smaller demand willing to pay a premium to get their gas sooner than those at the BP. Today the cost of driving up to a pump and immediatly filling it was an additional $.61 - $ 1.11.

Supply and demand.

[Hawken50]

Waitone,
Prices are high but they will drop just as soon as shortages are solved
ok the only thing i know about supply and demand is what i learned in highschool economics, and you seem to know quite a bit about it so i have a question. a week or two ago before the kitrina mess, one of the morning news had some oil expert on saying that the current (then) record high prices of oil per barrell went againts the laws of supply and demand because we had the highest stockpiles of oil ever. the US had more barrells of oil than it has ever had at one time before. he also said the use of oil has remained at a steady incline for decades, so no usage spikes to justify the price spikes. now, katrina aside, why could that be?

[ctdonath]

Looting at the pump.No, supply and demand.

Yes, the gas stations are raising the price to make a buck - but they can only do so because people are willing to pay it.

I passed this on the way home today:

http://www.donath.org/HighGas.gif

Stupid high price, but at least it got expensive enough to slow down the demand.

Unfortunately, the governor of GA ordered a price freeze. Now, because prices cannot be raised to a price balancing supply and demand, the gas station near me is sold out. Even if I was willing to pay $10/gal, I can't - because some pesky pol decided everyone should be able to "afford" it, and kept the price at a level where demand could indeed outstrip supply.

"Price gouging" is the only thing that makes providing goods worthwhile at times. Now that there is a price cap on gas in GA, there isn't much point in transporting gas here for sale. Supply and demand laws dictate the gas get routed elsewhere. Result? instead of cheap gas, we have no gas.

[Zundfolge]

Gas pricing has always bothered me. If they bought the supply that is in their current tanks underground at a certain price then why should it go up before they get the next higher priced supply?
Greed, simply greed, huge profits in short periods and the consumer get's it


The price at the pump is NOT based on what it cost to fill the tanks under the station, but instead is based on what it will cost to REFILL them after they sell the gas thats in them.

So what those of you complaining about "price gouging" really want is for gas station owners to slowly go out of business because as the price goes up they will not be able to buy as much gas as they just sold so they will keep making less and less until they don't make enough to buy any more gas and they close their doors.

Ford Motor Corp has an operating hydrogen, supercharged 4 cyl engine that works fine, is simple, clean, powerful and economic to operate. The tech has been available for a long time. Why is this engine not on the market? Well, because no one has begun to set up a distribution system of the hydrogen fuel.
Distribution isn't that big a deal ... making hydrogen is easy ... can be done in your own garage with a small machine the size of an arc welder.
http://www.switch2hydrogen.com/

Except we don't have a 'free market', the oil cartel has a monopoly.
Someone needs to toss out that well worn copy of Das Kapital and go read Thomas Sowell's Basic Economics (http://www.amazon.com/exec/obidos/tg/detail/-/0465081452/104-5839219-0430343?v=glance). :rolleyes: :p

[PCGS65]

I don't know of any gas stations closing in the chicago area yet. But gas is $3+ a gallon.

[Flyboy]

Mike's hitting the nail squarely on the head. When supply is restricted, prices rise. This is Econ 101. The rise in price causes a commensurate reduction in quantity demanded. This is less true of any given individual (that's micro-econ), but marketwide (macro-econ), quantity demanded will fall. With fewer gallons being sold, gasoline will remain available for those whose need is great enough to pay the cost.

Let's run a quick thought experiment: if you had the opportunity to fill your tanks, and a few cans, at $2.50/gal, would you do it? Damn right you would. Now you're complaining about $3.00/gallon. Some of you have mentioned $5 and $6/gallon. If gas hits that price in your area, are you going to go stockpile it? Of course not. In fact, you're probably going to start carpooling, switch to your motorcycles, riding bicycles (c'mon, you probably need the exercise anyway; this is good for you!), and minimizing what driving you do need to do.

Guess what: the high prices just acted as a rationing device. Adam Smith's "invisible hand" strikes again! And the good news is that, because of the high price, if you really need the gas, it'll be there for you. If it was still $2.50/gallon, you and everybody else would have stocked up your personal reserves and cleared the market. Yeah, it sucks right now, but overall, this is working to the advantage of all.

Actually, this is likely to be a really good thing. People are already trading in their gas-guzzling SUVs (which most of them didn't need in the first place) for more fuel-efficient vehicles. Major spikes like this will give a lot more people some serious encouragement to rethink their vehicular mission profiles and find a more appropriate vehicle. That will lead to a reduction in quantity of fuel demanded, prolonging our supply. I'm not one of the conspiracy theorists who thinks the world's oil is going to run out in the next few days, but nobody can deny that supply is finite. The slower we use it, the better off we're likely to be, all else being equal. This is also going to be a boon to the auto industry, as they'll need to do some R&D and new production for more efficient vehicles. GM, of course, will be royally boned by the new market, as they've just recently commited another factory to SUV and truck lines, but you needn't worry about them; you, the taxpayer, will be free to prop them up in their (latest) hour of need, and if you don't want to, you'll be free to spend a weekend with the Pain Monster.

But I digress. High prices on fuel--any goods, actually--are a natural rationing device. You may not like it, but it's in your best interest. Think "tough love."

And I'll just keep my mouth shut about where I'm still getting my $2.50/gallon high-octane. :neener:

[ctdonath]

:fire: :fire: :fire:
:cuss: :cuss: :cuss:
:banghead: :banghead: :banghead:

I live in the Atlanta region.
My closest gas station just ran out of gas. Presumably the rest on this mile stretch did too.
Next delivery is Monday night - 5 days.
I'm at 2/3rds tank, and drive about 100 miles a day to/from work.

Which is better:

1. Fearing "price gouging", the governor declares it illegal to raise prices any further.
Result: gas remains at a price pretty much anyone can afford, which means pretty much everyone buys up everything left now, leaving nothing left - even for those who really need it and can pay its relative immediate worth.

or

2. Let supply-and-demand rule, resulting in high prices that discourage people from buying gas unless they need it badly enough they're willing to pay a high price.
Result: gas remains available, with the high price slowing demand to what people really need relative to its scarcity.

I got stuck with #1. No gas. One trip to work and I'm dangerously low; without available supplies, what's left must be reserved for emergencies. I'm not going to work Thursday, nor (likely) Friday. At $6/gal, maybe I could have ... but because of cries of "price gouging" and "it's not fair", it was artificially kept at about $3/gal, and - supply and demand - promptly sold out.

Excretions are starting to impact the rotating ventilator. Thanks, "price gouging" complainers.

[Flyboy]

hawken50:ok the only thing i know about supply and demand is what i learned in highschool economics, and you seem to know quite a bit about it so i have a question. a week or two ago before the kitrina mess, one of the morning news had some oil expert on saying that the current (then) record high prices of oil per barrell went againts the laws of supply and demand because we had the highest stockpiles of oil ever. the US had more barrells of oil than it has ever had at one time before. he also said the use of oil has remained at a steady incline for decades, so no usage spikes to justify the price spikes. now, katrina aside, why could that be?
It's because demand is also at an all-time high. Yes, we have large stockpiles, but stockpiles aren't supply, by definition--they're goods removed from supply. In fact, they're demand, so huge stockpiles, particularly growing stockpiles, are competing against you for oil. Additionally, while US demand for oil might not be abnormal in comparison to recent history, a number of other countries--particularly China--are experiencing huge increases in demand for oil. Now, even though our demand is the same, we have to compete with somebody else's increased demand. As a result, the total demand has increased, and the equilibrium point shifts to a higher price.

Further, most people don't see or care about oil prices, but rather gasoline prices. Gas prices are continuing to rise (even before the hurricane damage) because supply can't meet demand. Though we have plenty of oil--including large stockpiles--we can't make gas any quicker today than we could five years ago. The environmentalists and their leftist friends have managed to keep us from building any new refineries in a long time. Consequently, even with plenty of raw materials (crude oil), our supply of gasoline is constrained. As for the last couple of days, consider that Katrina knocked several refineries offline, as well as taking out a major pipeline (or possibly more than one). With the refineries out of production, aggregate supply is reduced, and with the pipelines inoperative, regional supplies are dramatically reduced. As supply is reduced, the equilibrium point again shifts to a higher price (and, as I discussed previously, this is a good thing).

By the way, I'm not sure about crude oil prices (haven't looked), but gasoline prices aren't at record levels yet (as of this morning, anyway) when adjusted for inflation. They may be now due to the demand spike and supply crunch, but all the BS the talking heads have been spouting about record gas prices are just that--BS. If you don't adjust for inflation, it doesn't count.

[R.H. Lee]

You go right ahead and believe that a 'free market' exists in the oil trade if you want. Forget that a small group (monopoly, cartel) controls and manipulates the supply and by extension the price. The price here (today) is $2.93 (in the 'free' market) :rolleyes: and all the gas stations are open. Why is $3 'artificially low'? Now, there may very well be a 'spot shortage' in the southeast on account of distribution problems after the hurricane. That is out of anyone's control and would have happened no matter what the price is/was. You think everybody somehow 'stockpiled' all the available gasoline in Atlanta just because the price was 'artificially low'? Really? Where did they put it? Or did they just fill up, drive around, and fill up again?

[Sindawe]

Is these folks. http://www.ovonic-hydrogen.com/home/home.htm for those who wish to keep tabs on them.

[jefnvk]

OK, I've had a half semester high school class in econ, and a semester of a college class of writing papers using economics as a basis.

I can figure out that if suddenly everyone is filling up, one of two things have to happen. Either 1) they continue to sell at current price, and risk running out or not having enough to pay for the next fill up, or 2) the price goes up, both to restrict supply somewhat and give them enough to buy a fill up when the gas hits $3.50 or $4.00 a gallon next week.

So lets say that they keep selling for the $2.25-$2.50 it was. They are bone dry, we run into ct's situtation where people that actually need the gas can't get it, because everyone and their mom was filling up every car, gas can and empty milk jug they had lying around. When new gas comes in, that goes at almost any price, as people just seen what happened with it running out last time. How is that any good?

Or, they jack up the prices to $4-5/gallon. People decide they don't need gas so bad, supply doesn't drain up for those that do, and in a couple days when the strategic oil gets out and processed, and new gas is coming in, the price drops back down. How is that any worse than the first situtation, is it because you have to shell out a few more bucks for something that many people don't really need?

BTW, my friends uncle owns a couple gas stations. His advice is that anyone owning gas stations isn't in it to get rich.

Also, does anyone else notice the eery similarities between this and the show 'Oil Storm'?

[Sindawe]

Also, does anyone else notice the eery similarities between this and the show 'Oil Storm'? Oh yea, you betcha I do. I've already worked out the bus scheduled to get to Boulder for work when we move, new tubes on the bicycle and tire on the motorcycles. Worse comes to worse, I know how to set up the phone system to foward call here at home. 99.9% of the stuff I do at work, I can do from home.

[R.H. Lee]

In other news, you won't be able to give your SUV away next month. You'll have to pay to have it hauled off. :p

[Sindawe]

You'll have to pay to have it hauled off Yank the engine for use as a fishing boat anchor, cut the top off, rip out the interior, punch some holes in the floor pan, fill with soil and PRESTO! a garden you can drag into the sun! :D

[coylh]

I look forward to high gas prices. People won't conserve unless the alternative is expensive.

[S_O_Laban]

Prices are high but they will drop just as soon as shortages are solved. What we have to do is keep firmly in mind the source of those shortages and take our anger out on those who are responsible for structuring shortages. . . .environmental nazis and their congressional toadies.


+ 100

[Hawken50]

Fly Boy,
thanks for you response. it was well written and easy to understand. now i just have to memorize it, spit it out to the guys at work and i'll look like a genius ;)

in all seriousness though, thanks for helping me understand the situation.

[Coronach]

Stupid high price, but at least it got expensive enough to slow down the demand. DINGDINGDINGDINGDING.

People do not understand that in a situation where demand spikes and supply remains constant, you have but two choices (three, if you step outside of the free market).

1. Increase price
2. Run out of product
(3. Ration)

Well, demand has obviously spiked in Atlanta, and they have experienced option #2.

As to the "cartel/monopoly" nonsense...

The oil "cartel" is NOT fixing the price of gas. Retailers are setting the price of gasoline, based upon two things:

1. A fervent desire to not run out of product
2. A need to pay to refill their tanks once the current batch is gone.

The oil "cartel", inasmuch as it can, sets the price of crude oil. Period. It is what they sell. Can they, if they wish, drive the price per barrel through the roof? Sure, assuming this (non)monolith of competing companies and nations can get on the same page. OPEC does not speak for all and even when it speaks for itself it is hardly 100% effective at price fixing.

But, let's just assume that they can ramp the price into the stratosphere just for the sake of discussion. That will impact prices in the mid-term, as it takes several weeks (not sure how long) for the ripple effect of increased price to move downstream to the consumer.

Two observations:

1. This happened in a day.
2. Oil is trading at, what, $68/barrel? That's high, but it's not high enough to justify $5/gallon gas.

Ergo, there is another consideration impacting price. Namely, the tendency of the sheep to run en mass to the pumps and tank up whenever something scary happens, and the reality of over-the-top reactions to the exhaustion of on-hand supply, which is what is happened in Atlanta when everyone ran to the pumps at once.

The "oil monopoly" has zilch to do with this sudden price hike in gas. This is 100% the retailers, trying desperately to have something to sell for the next week. Think they're making a killing on gas? Try having zero income for a week on for size. Mom and pop places could go under after a few weeks of that.

Mike

[wingman]

But I digress. High prices on fuel--any goods, actually--are a natural rationing device. You may not like it, but it's in your best interest. Think "tough love."



For sure all these years the oil company CEO's had my best interest at heart,
there is so much love out there from the wealthy I can feel it now. :barf:

[owen]

The oil companies don't set the price at the pump. The retail store owners do.

By the way, is it really unethical to charge what you can get for a product?

In that case, I insist you sell me your car for $50. Any more, and I say you are price gouging.

[Coronach]

Now, now, Owen. I think you and I are guilty of the same thing. We're trying to talk sense while others are having a good rant. ;)

[Titus]

For sure all these years the oil company CEO's had my best interest at heart,

The nice thing about the free market is it doesn't require people to be "nice", care what you think or any of that stuff that's never going to happen anyway to work. Have you been going around to these oil company CEO's doors, offering your services at discounted rates or on a volunteer basis because you're so concerned about them? Of course not!

there is so much love out there from the wealthy I can feel it now.

Maybe it's because they heard what you were saying about them on the internet.

[HankB]

Funny how when there's a spike in the price of oil or a disaster, the price of gas at the pump goes up - literally - overnight.

But when crude prices go down, all we hear are words to the effect of "There's a six to eight week lag because of the length of the supply chain, so you won't see the price of gas go down for nearly two months."

And if there just happens to be another spike in crude prices in that time . . . :rolleyes:

It will be very interesting to read the next quarterly reports of the major oil companies and see how bad they're . . . hurting.

[Art Eatman]

Here's some info about the problem:

http://www.businessweek.com/bwdaily/dnflash/aug2005/nf20050831_0413.htm?campaign_id=topStories_ssi_5

Some 1.4 million bbl/day ofrefining capacity is shut down. The lack of electricity means no pumping of gasoline to one of the Carolinas, among other problems. They don't anticipate much damage, but the lack of electricity means they can't test for internal problems, if any.

Of our domestic production of some 8 million bbl/day, 30% is from the Gulf of Mexico.

Florida is short on natural gas for electric generation, and the backup supplies of coal come via barge on the Mississippi (for part of the route).

Refineries are the least profitable part of the use of a barrel of oil. More profit from plastics (cars, plastic pistols, commo; computer stuff) and stuff like nylon/orlon/dacron/rayon. The nasty old petro-chemical guys...

Just keep thinking "Econ 101", and live with it. About all I know to tell you is you can either write God and complain, or take your TS card to the Chaplain and let him punch it. Oh, and tell your congressperson to consider allowing oil and gas production from those places now off-limits to drilling.

:), Art

[petrel800]

It's easy to see in a thread like this how the the politicians have used people's ignorance of economics to buy votes.

It's also very evident that the politicians have done a fine job of creating hate and envy of the wealthy in America. It's a shame people are more concerned with other people's wealth rather than trying to improve their own.

Ignorance and hate have been used by the ruling class for years to gain more power. It's obvious that America is not immune from this either.

[Derek Zeanah]

Here in Statesboro (just a bit west of Savannah, GA) gas prices went up $0.40 since this time yesterday. I just refueled, and actually found that my local station was out of diesel. The good news was that once I found some, it was $2.79/gallon.

I bought this car in 1998, and my buddy at the time was making fun of me for spending the extra $1,200 to get a TDI engine in it. Granted, it took something like 79,000 miles to make up the difference (about a year and a half at the $0.79/gallon at the time), but I'm grateful for it now.

The big advantage of 55mph/53mpg (or 85mph/42mpg which is more typical) is that I only refuel once a month, so I'm fairly insensitive to fuel costs. I was worried this morning though -- I only had about 120mi left in my tank...

[wingman]

[QUOTE]It's also very evident that the politicians have done a fine job of creating hate and envy of the wealthy in America. It's a shame people are more concerned with other people's wealth rather than trying to improve their own.Quote:


Bull, no one said anything about hating the wealthy, capitalism is great
if there are standards, morals, we are losing that in our society.
Per some on this board it would be ok for me to charge your 80 year
mother $30,000 to repair her roof and charge her neighbor $3,000.

You can spin it anyway you like oil companies are making huge profits
on the backs of working poor, I think it's wrong, if you believe it's
correct to make huge profits when it brings suffering to others that
indicates what I said before no standards or morals and sad to say
our country appears to be taking that path.

[wingman]

The nice thing about the free market is it doesn't require people to be "nice", care what you think or any of that stuff that's never going to happen anyway to work. Have you been going around to these oil company CEO's doors, offering your services at discounted rates or on a volunteer basis because you're so concerned about them? Of course not!


Sad statement but it indicates where we are heading. :(

[jefnvk]

Per some on this board it would be ok for me to charge your 80 year
mother $30,000 to repair her roof and charge her neighbor $3,000.

If she agrees to pay $30,000 for the service, then yeah, its OK.

Per some on this board, if you have 100 people ready to pay you $4/gallon for something you own, but 500 ready to pay you $3, you shouldn't sell for $4 either.

How often do I hear that people stockpile food or ammo, because when something like this happens, they could be worth their weight in gold, and a powerful barganing tool. Now, someone else has gas, and something like this happens, and it suddenly is not OK?

[petrel800]

You can spin it anyway you like oil companies are making huge profits on the backs of working poor. . .

Thanks for proving my point about envy.

Businesses are in business to make a profit. If profit was not a driving force, there would be no cures for sickness, no technology, nothing. It sounds like you would feel better if everybody had an equal amount of stuff and we all lived in equal 2 bedroom shanties.

if you believe it's correct to make huge profits when it brings suffering to others that indicates what I said before no standards or morals and sad to say our country appears to be taking that path.

Thanks for proving my point about ignorance about economics. The only moral thing to do is to follow the mathematically proven laws of economics. Otherwise, you are doing a complete and total disservice to society.

Best advice I can give you is this Adam Smith, Wealth of Nations (http://www.amazon.com/exec/obidos/tg/detail/-/0553585975/qid=1125590130/sr=8-1/ref=pd_bbs_1/104-3045734-2810331?v=glance&s=books&n=507846)

When you get done reading that you'll understand that by everyone doing what is in their best interest economically, we all benefit economically. In the end you are right it is about morals, unfortunatly you don't understand that by working for a profit, these companies are doing the moral thing for society.

[Zundfolge]

It's easy to see in a thread like this how the the politicians have used people's ignorance of economics to buy votes.

It's also very evident that the politicians have done a fine job of creating hate and envy of the wealthy in America. It's a shame people are more concerned with other people's wealth rather than trying to improve their own.

Ignorance and hate have been used by the ruling class for years to gain more power. It's obvious that America is not immune from this either.

Best advice I can give you is this Adam Smith, Wealth of Nations (http://www.amazon.com/exec/obidos/tg/detail/-/0553585975/qid=1125590130/sr=8-1/ref=pd_bbs_1/102-5789137-3884126?v=glance&s=books&n=507846)

/me buys petrel800 a beer

[Zundfolge]

Per some on this board it would be ok for me to charge your 80 year
mother $30,000 to repair her roof and charge her neighbor $3,000.
jefnvk answered that well.

But what you (and the "price controllers") are asking here is that we force someone to repair my 80 year old mother's roof for $1500 because she's "poor" and its "not fair" (even if its going to cost them $1800 in supplies and labor).

[MICHAEL T]

Yesterday morning gas was 2.42 Regular by 11am was 2.72 and when I got their at noon was 2.99. I filled up drove down street 3 blocks picked up dog food came back by was 3.09 This was lowest in town. Rest of stations at 3.19 to 3.40. It a rip off That gas is and has been in ground for at least a couple of days.$70 a barrel is for oil months awayfrom our shores. Only 4 refineres. of 8 shut down on Gulf coast were for gasoline. Just another way of friends in Washington screw the working class people I bet they all get a nice big donation next election from oil companys. They need to shoot the looters in La. and the suiter looters of you pockets in Washington.

[owen]

Let me ask you this, how much is it going to cost those gas stations to restock the gasoline?

How much is it going to cost the stations that have no gas to essentially be out of business for a week or more?

I'm sure the people that are complaining about the gas prices also expect the gas station owners to pay their employees during the week they aren't working also.

The gasoline is the property of the gas station owners. It is their right to sell it for whatever price they want. if you don't want to pay $4.00/gal, then don't. The subsequent decrease in demand will cause the price to go down again.

Micheal T, you do realize those 4 refineries represent 20% of the capacity for gasoline in the US, don't you?

You realize it will be months before those refineries are replaced don't you?

You realize that the pipelines that deliver gas to the southeast are running at just over 20% because of lack of electicity, don't you?

If you don't like the idea of price determining how a scarce resource is distributed, what do you propose as an alternative?

Let's talk about some other problems.

Like the farmers that are going to go out of business, because they can't ship their grain, because the 5th largest port in the world is now completely offline.

Like the collapse of the shrimping industry in the Gulf, because the fleet is destroyed.

Like the major east-west highway in that part of the world is underwater, and will be for quite a while.

How bout the hundreds of small businesses that are going to fail because they are going to be out of operation for at least 2 months.

How about the dozens of banks that are going to fail, because of millions of defaulted loans.

The price of gas is so inconsequential compared to the rest of the problems out there, you should all be ashamed of yourselves. The bodies of thousands of your countrymen are bobbing in the swell. A major American metropolis is basically a write off. There are millions of new homeless americans: homeless not because they are lazy, not because they are the dregs of society, but because of an Act of God.

And you are all pissed because it's going to cost you an extra $1 to drive to the grocery store.

???? You!

[Sindawe]

+1 What owen said.

[Zundfolge]

That gas is and has been in ground for at least a couple of days.

My GOD the NEA has done a damn good job of making sure Americans don't understand Economics ... makes for an easier transition to Socialism if the people don't understand how it works.


For the last time: GAS PRICES AT THE PUMP ARE NOT DETERMINED BY WHAT THE STATION PAID FOR THE GAS THAT IS IN THEIR TANKS, BUT IT IS DETERMINED BY WHAT IT WILL COST TO REFILL THOSE TANKS!!!

Look, if a business selling gas, bread, DVD players, whatever, wants to continue to stay in business they have to replenish their stocks. Therefore the price they set for the products currently on their shelves (or in their tanks) is NOT determined by what it cost to fill those shelves or tanks, but by what it WILL cost.

[cls12vg30]

How long before some economic ignoramus says, "Hey, we need gas rationing."

I'll wager we'll hear it tomorrow.

Here in Raleigh, NC, 87 Octane went from around 2.50 yesterday to 3.00 today. Rumors are about that gas stations on the coastal islands are already dry. Smaller "Mom & Pop" stations all over the state are reported to be dry as well.

Governor Easley :barf: went on TV yesterday to encourage carpooling, telecommuting, and general conservation of gasoline because of supply problems resulting from Katrina. Of course, before his press conference, a co-worker of mine who has "contacts" at the newspaper sent out an email that the Governor was going to be announcing gas rationing. Which of course was ridiculous, but when that idiotic rumor mill gets going, common sense goes out the window.

The news today is that the Colonial pipeline, which starts in Louisiana and Texas, and supplies 90% of gasoline for NC, is returning to operation today, and should be running at full capacity by the end of the day. So perhaps the sky is not falling after all.

[Titus]

Best advice I can give you is this Adam Smith, Wealth of Nations

And if you want to be entertained as well, check out P.J. O'Rourke's Eat the Rich. (http://www.amazon.com/exec/obidos/tg/detail/-/0871137607/qid=1125598231/sr=8-1/ref=pd_bbs_1/002-4065396-2598439?v=glance&s=books&n=507846)

[Titus]

Sad statement but it indicates where we are heading.

So I guess you're not going to help them out? Charity begins at home.

[BeLikeTrey]

ramp them up. And my other problem? It's gouging when there is not alternative so YES it IS a monopoly. I am going to be buying E85 whether it kills my ol vehicle or not. My friends have been using in their NON flex fuel vehicles with no change-improved performance.

Basically we have been addicted to black heroine (oil) and we have no viable alternative for the majority. We were lulled by the relatively low prices for so long that this country has been content with status quo. Now the drug dealer has pulled the rug out and we are addicted. I am both angry and feeling like WE COLLECTIVELY deserve it. Individually we are not responsible, but our government trying to have it both ways- being eco-friendly and still buying into big oil is not the people's fault and we are who suffer. May we all learn and be wary of such a monopoly in the future. Perhaps this is the kick in the pants we need to REALLY PURSUE alternatives and MAKE THEM AVAIALBLE.
Our government also knew about this ahead of time and could have set infrastructure up for this at least a week ahead of time by coupling the reserves with those 40% refineries. I could go on but I am getting long winded. I just want off of oil (how many times must we go through these shortages before we learn?) I think we need to have a wide range of choices economically available.

[Correia]

I agree with Owen. A huge chunk of the country has been devestated. Of course there are going to be repurcusions. We can deal with them, or we can whine about them on the internet.

[Jim Diver]

There is gouging..

Last night Rotton Robbie (A local discount gas chain) was selling for 2.99 for regular. Right across the street was a 76 (a premium gas chain) was selling for 2.95. Rotton Robbie is ALWAYS cheaper than the other station cause it is lesser quality with an alcohol blend.

[petrel800]

Our nations refineries have been running at 98% capacity for several years now, unfortunatly, envirowackos and politicians have made it impossible for us to build new ones. They have also prevented building newer more efficient and more technologically sound refineries. Did you know that coal can be refined into a fuel that will run in your vehicle? Do you know it hasn't been tapped into in a larger scale because we aren't allowed to build new refineries.

May we all learn and be wary of such a monopoly in the future.

I keep reading about this gas monopoly, yet when I drive down the street, I see a competitive free market. Shell, Exxon, BP, Quicktrip, Marathon, . . .
All of whom have two to three different suppliers of their product, GAS. Now if you are referring to oil as a monopoly you would be wrong again. It could possibly be an oligopoly, but there is certainly more than one seller of light crude oil in the world. Citco, conoco, exxon, . . . not to mention the state sellers (state owned oil companies Iraq, Iran, Saudi's).

The per barrel dollar figure you hear on the news is speculative selling and future contracts. Its not like all the middle east oil goes into a big warehouse and then you pay $68.00 per barrel. Just like stock in a company, when you look in the news paper and it says your stock is worth $45, that doesn't mean you could sell it for $45. It means the last transaction in the market was for $45. If you put your stock up for sale you might find a buyer for $43 or $47.

Now for all the people yelling "price gouging!", I have a question for you. If you go to school and develop a specialized skill and take a job out of college for $40,000 / year, and then 6 mos later there is a shortage of people with your abilities and you are offered a job at another company for $60,000, if you accept that job does that make you a "price gouger?" Because by doing so you are raising the cost to employ someone with your skills due to a shortage.

[Yowza]

Maybe Rotton Robbie had a smaller supply of gasoline on hand due to the fact that they are as you said, "always cheaper" and had been selling their supply faster than the 76. Supply and demand again. Of course, they could just be gouging for that extra 4 cents.

Rick

[Waitone]

Here, let me confuse things further. In a market for manufactured commodities (such as gasoline) price is not set by wholesalers. It is not set by distributors. It is not set by retailers. Price is set by the market. It is up to each level in the chain to decide if it wants to participate at that level.

In a market of increasing prices a decision to keep prices low will result in inventory being depleted tout suite. In a market of decreasing prices high prices will result in inventory staying put. In either case those who hold inventory will lose. Manufactured commodities markets demand equal pricing to clear inventory. No one wants to be out of inventory when prices are rising. No one what to have excess inventory when prices drop. The desire to clear inventory is all consuming.

Another characteristic of manufactured commodities (such as gas) is direct substitution and equivelent performance. Anybody in marketing in such a business wants to defeat direct substitution and equivelent performance. Why? Because prices are determined by the market and are wholly out of your control. Hinder direction substitution or stop equivelent performance and you are guaranteed a market price increase. And that kiddies, is precisely what the EPA did when it mandated designer fuel formulation. Formulations based on geography ensured higher prices. Why, because designer fuels stop direct substitution and equivelent performance keeping prices higher. Bush's decision to stay designer formulas will go a long way in reducing prices.

Are the oil companies a monopoly? Nope, but government is and government by its power of the gun is distorting the market place. The market will try to adapt and will be successful over time, but at some point its ability to correct will run out. The market will correct and it will be ugly. I maintain what we are seeing as a result of Katrina is the market's inability to continue correction. We have limited supply at the wholesale level and encouraged use at the retail level.

I've said it one and I'll say it again. We had better throw a blanket over environmental nazis.

[grampster]

"I'm hungry"

"I'm Thirsty"

"I don't feel so good"

"I'm wet"

"Can anybody tell me where my family/kids/husband/wife/gramma is?"

"What am I going to do, where am I going to go?"

"Everybody's dead, they're dead and my house is gone."

"Gas just jumped over $3.00, boy am I pissed!"

Sigh.......................

[Coronach]

Well, this thread just goes to prove that you can explain something multiple times, and still have people go "Well, it's price gouging, because I say so", and offer no clear reasoning for their position.

We exhort that Antis to think about what they're saying rather than spew rhetoric, but this is proof that we don't have a corner on the logical thought market.

Mike

[Zundfolge]

Well, this thread just goes to prove that you can explain something multiple times, and still have people go "Well, it's price gouging, because I say so", and offer no clear reasoning for their position.

We exhort that Antis to think about what they're saying rather than spew rhetoric, but this is proof that we don't have a corner on the logical thought market.

Damn you for being right :neener:


:banghead: :banghead: :banghead: :banghead: :banghead: :banghead:

[alan]

A repost of previously posted thoughts:

I might be wrong, but didn't there used to be laws regarding PROFITEERING?

Also, and re this I might also be wrong, but how would you like to be the proverbial FLY ON THE WALL of oil company board rooms, where decisions concerning which refineries will be closed are made, this respecting the shortage of REFINERY CAPACITY that we lately are hearing about, being a driving force behind price spikes. Articles appearing in the Pittsburgh Post-Gazette this past Monday, as I recall.

Finally, there is one more thing that I've always been curious about. Fuel prices, believe it or not, go down as well as go up, and sometimes they simply go sideways. When they go up, they move like that proverbial rocket, while when they go down, they move sloooowly.

When one asks about this seeming discrepancy, they are told something about the need for things to "work through the system". Fair enough, but how come working through the system goes much faster re upward movement than it does respecting downward movement?

As a nearby Sunoco station, don't know if it's "company owned" or a private operation, regular grade was priced at 2.50/gallon, rounded off to the nearest whole cent on Monday. Yesterday afternoon, the pump price was 2.60, and this afternoon, it was 2.86. By the way, the above price movements applied to what I strongly suspect was gasoline already in the station's tanks.

Additional thoughts:

As I remember, President Lincoln observed that Double sell of a slave is something not done be gentlemen.

Also, there hasn't been a new oil refinery constructed in this country in 40 or so years. How come? And the following might prove of interest to some. Oil company A buys oil company B. Guess what then happens? Oil company B's refinery or refineries are shut down. Any questions regarding this shortage in refinery capacity?

All of the foregoing bypasses what is sometimes described as THE LAWS OF THE FREE MARKET ECONOMY. Interesting thing about this is the following. Does anyone actually benieve that we have a FREE MARKET ECONOMY?

[TaxPhd]

Um, petrel800, you might want to review your graph.

1) Your vertical supply line makes no sense. It says that no matter what the price is, quantity supplied doesn't change. Doesn't work that way.

2) You showed a change in demand, and that isn't what happened. There was a change in supply, creating a supply curve shift to the left. The shift to the left in the supply curve caused movement ALONG the demand curve (not a shift in the curve) to the new equilibrium (higher) price. You could also make a case that there was a shift in demand, caused by the hysteria surrounding current events. But if so, it was precicpitated by the supply shift, and it's not necessary to explain what happened. If it did occur, it simply goes further in explaining the higher prices.

If prices are fixed (a price ceiling established) then there will be a shortage equal to the distance between the supply and demand curves and the artificial price.

Gouging doesn't exist. It is a term created by liberal bed-wetters and co-opted by politicians on each side for political expediency. Those who see gas stations with no gas are seeing the practical reality of what I just described.




Scott

[jefnvk]

By the way, the above price movements applied to what I strongly suspect was gasoline already in the station's tanks.

Hasn't this been beaten to death already? Can you guarrantee that owner that when the truck comes in next week, the gas is gonna cost the same amout that it did last time, to justify selling at the same price? What happens if the truck comes in with gas at $4.00, when he just sold his last supply for $2.50? That is a $1.50 difference, so he will have to sell the new stuff at $5.50 to make up the difference.

And I still fail to see where anyone is entitled to cheap gas, or gas at the price they want to pay. Want cheap gas? Go buy a station, and give yourself all the free gas you want. Sell yours at $2.50 when everyone is a dollar more, and see how long you last.

[Art Eatman]

In WW II, all sorts of things were rationed besides gasoline. Meat was one.

A lady goes to the butcher: "How can you charge $2.79 for a pound of porkchops? Across the street they're only $1.59!"

"So why don't you buy across the street?"

"He's out of pork chops."

"Okay. When I'm out of pork chops, I'll sell them at $1.59."

We don't need government rationing to deal with shortages. Raising the price, just itself, leads people to decrease demand, which eventually will help resolve the problem when the electricity goes back on and deliveries start again.

As far as Colonial pipeline and supplies to North Carolina, I think I'd check about which refinery is the main supplier, and whether there is electricity to all the booster stations along the pipeline. Then and only then would I maybe believe all is well.

Art

[gm]

Gouging doesn't exist. yeah right...it happened here in ohio the day of 9/11 and many stations took advantage of it,they had to reimberse everyone the next day and pay fines for it.incidentally,the price spiked well up to over 3 bucks that nite and funny,the very next morning, it fell back down to 149 after the attorney general got on the radio and announced there would be fines against "gougers" if caught.

last nite on tv,cnn of all news ,there was a bp in georgia that was charging over 5 bucks a gallon,the video was as plain as day and for all to see.a station nearby was charging about a dollar less for the same gas,interesting.on national tv no less.here today, it was 309 in the city and 5 miles down the road near a busy business route,it was 325...same gas.something sure smells like monkey business.


dont tell me there arent gougers taking advantage of this crisis.these things bring out the very WORST in people. :neener:

[TaxPhd]

It's not gouging. It is simply prices reacting to market conditions.




Scott

[Coronach]

last nite on tv,cnn of all news ,there was a bp in georgia that was charging over 5 bucks a gallon,the video was as plain as day and for all to see.a station nearby was charging about a dollar less for the same gas,interesting.on national tv no less.here today, it was 309 in the city and 5 miles down the road near a busy business route,it was 325...same gas.something sure smells like monkey business.Yeah. And in Atlanta some gas stations ran out of gas, which caused a panic and drove everyone to the remaining pumps, which caused a widespread shortage of gasoline.

What you are citing is ROCK SOLID EVIDENCE that the gas retailers failed to raise the price high enough, fast enough.

People should take economics classes. Seriously.

In the aftermath of 9/11 we had no such shortages, because retailers spiked prices and kept consumers away. They took flack for it from people who slept through econ 101 (some of whom were in positions to get in front of microphones and demonstrate their ignorance), and that probably lead to some reluctance to ramp up the price this time around.

Your choice. Expensive gas, no gas, or rationing.

Sounds like we all want "no gas."

Mike :banghead:

[Waitone]

Station A charges $6 / gal which is right across the street from station B charging $4 / gal.

If the government thinks station A is gouging and should be shut down, the station A's customers need to be pistol whipped. An advertised price with no takes benefits no one. Meanwhile Station A is paying for inventory he is not turning because rational human being when faced with my scenario will opt for station B.

Again, don't get PO'd at the guy pumping gas. Get PO'd at the ignorant, gutless, unprincipaled politicians who restrict supply in their pursuit of power and money.

[cracked butt]

If the government thinks station A is gouging and should be shut down, the station A's customers need to be pistol whipped.
If it came down to getting immediate service from station A or waiting in line for 3 hours at station B, I'd gladly (more likely begrudgingly) pay the extra $2 at station A without complaint.

[cracked butt]

My answer to people who claim oil companies are gouging is this:

Large oil companies are all publicly traded. If they are gouging and profiteering, only a fool would claim such and not take every last penny they have to their name to buy stock and get on the gravy train.

[gm]

Mike, you know what started the whole mess on 9/11?a service attendant starting a rumor..which quickly spread.I heard him telling everyone the same line of bull as they drove away.the nearby town shut down the gas stations cause the situation was "out of control"...then they all came back here amongst more disorder...because of a rumor which wasnt denied to be false by anyone standing around behind the counter,including the manager who was on the phone waiting for the go ahead to raise it another quarter that nite. I know because I was chatting with him for a long long time.

some were raising it and some werent that nite.I walked down afterwards and watched the mayhem.geesh.total gridlock for miles.ALL because of a rumor.


what becomes of this new mess,who knows.I do know alot of folks are going to be in trouble if it continues during the cold winter months on a tight and fixed income,the elderly and lowincomes will suffer most,most help programs are already full or cut from aid so whats it going to take before it changes?


stay safe.

[Coronach]

So, he started a nationwide rush to the pumps, overnight? All by himself?

That's pretty effective! Bush should enlist him as his new public relations guy. ;)

Seriously, that's to be expected. People by nature do that in crisis situations. Always have, always will. You have to expect that. The point remains that people ran to the pumps on 9/11, gas retailers jacked the price up, people paused, shook their fists, and many of them drove away without filling up. Over the next 2-3 days, the prices returned to somewhat normal levels, and people resumed tanking up as normal. No shortages, very little panic, comparatively few lines.

Here we have, in a few isolated areas, shortages and gas lines, and people still complaining that the price of gas is too high....when they're out!

Newsflash. If you're out- completely out- of a product, you were selling it for too little money.

Mike

[WT]

EXXON-MOBIL stock prices are up almost $3 this week. Started at $59 and went up to $62. People are making big bucks.

[wingman]

[QUOTE]It's not gouging. It is simply prices reacting to market conditions.Quote:

Do you also believe in the tooth fairy.

[Coronach]

You know? If there was no evidence of shortages, you might be able to at least make a case for it. You would still be wrong, based upon any economist's analysis using modern economic theory, but you could at least make a case for it without having to disregard existing data.

But trying to make that case in a situation where there are obvious shortages is simply absurd. That, or it demonstrates a fundamental misunderstanding of how capitalism works.

Mike

[jefnvk]

EXXON-MOBIL stock prices are up almost $3 this week. Started at $59 and went up to $62. People are making big bucks.

Actually, it means that investors think that Exxon will be making money, leading them to buy Exxon stock. Once again, when something starts getting bought up, the price goes up. The stock isn't directly linked to profit.

[JMag]

As in many arenas, guns included, one can pinpoint one troublesome state which always seems to have its hands all over regulations, restrictions, requirements, and fanatical enviro-**** policies....Kalifornia!

The ball-and-chain this state places on the refineries and the myriad of gasoline formulations cost a large fortune. Such costs are, of course, passed along to you and me. All too often many of the other states in this country parrot whatever the left coasters do. Please stop the insanity.

Kalifornia believes it's all worth it; all in the name of environmentalism.

I disagree. :fire:

[ctdonath]

gm,
I doubt it. May have had an effect, but it was far more likely the news reports and major Atlanta morning talk show pundit Neil Boortz reporting that the main source of gasoline to the area, two large pipelines, were shut down due to hurricane-related electrical problems.

Somehow I think major newspaper / internet / radio outlets reporting gas supply reduction had more effect than one gas station attendant. It's sure why I topped off that morning.

[TaxPhd]

Wingman,

I'm sure many here would be interested in your explanation of how a natural disaster causes the laws of economics to suddenly become null and void. :rolleyes:




Scott

[Zundfolge]

My GOD the NEA has done a number on our country.

Too many people in this country don't know anything about economics ... all they know are the socialist lies they learned in public schools and the leftist run media.


Its not the left's gun control that's going to destroy us, its the coming demand that the government enslave us so we are "safe" that will destroy us. The Soviet Union is going to reach out from beyond the grave and destroy us from the inside.

For God's Sake, here in a somewhat conservative/libertarian forum there are too many people who still embrace socialist thinking.


I was just watching MSNBC :barf: they kept showing "refugees" in NO yelling at the camera "they ain't give us nothin'! they ain't taking care of us!" and some woman complaining about the fact that they weren't serving hot meals at the Superdome.

The sense of entitlement among too many of the least productive in our society is just frightening.



To those of you who hate the "evil corporations" and "evil oil cartels" and believe they are engagin in "gouging" and believe in things like price controls are a good idea, y'all need to read the following 3 books:

Adam Smith's The Wealth of Nations (http://www.amazon.com/exec/obidos/tg/detail/-/0553585975/qid=1125632977/sr=8-1/ref=pd_bbs_1/104-5839219-0430343?v=glance&s=books&n=507846)
Friedrich A. Hayek's The Road to Surfdom (http://www.amazon.com/exec/obidos/tg/detail/-/0226320618/ref=pd_null_recs_b_t/104-5839219-0430343?v=glance) and
Thomas Sowell's Basic Economics (http://www.amazon.com/exec/obidos/tg/detail/-/0465081452/qid=1125633190/sr=8-2/ref=pd_bbs_2/104-5839219-0430343?v=glance&s=books&n=507846)

[Standing Wolf]

The sense of entitlement among too many of the least productive in our society is just frightening.

Well, yeah, sure, but they almost all voted for that Kerry creature, didn't they? Those welfare dollars were a pretty good investment for the Democratic (sic) party, especially considering they came out of the national treasury, not the party's coffers.

[R.H. Lee]

{shrug} Doesn't really matter much to me. I just made a 350 mile round trip to the Santa Cruz mountains today. Looks like I used between 8-9 gallons of gasoline. I'll let you know exactly after I fill up tomorrow. :p

[BeLikeTrey]

OIL not the companies is what i was referring to as a sort of monopoly. Does your car run on hydrogen? how about one of the other "alternative" fuels... Even Hybrids still run on Oil based fuel.

I rest my case, OIL itself has a monopoly over our fuel. I want viable alternatives is all I'm saying. since we have Price restrictive alternatives (I can't afford a hybrid and I don't see any viable hydrogen, etc. options) OIL still has a monopoly. My main gripe is oil dependence, period.

[Frandy]

FWIW:

WRAL story (http://www.wral.com/news/4927104/detail.html)

Gas Price Hikes Probably Legal, N.C. Attorney General Says

POSTED: 7:57 pm EDT September 1, 2005

RALEIGH, N.C. -- With gas prices climbing, some buyers may no longer trust their sellers.

"That just seems like they're taking advantage of consumers, and there should be consequences," gas customer Steve Vedell said Thursday, when gas prices reached $4 a gallon for unleaded fuel in some parts of North Carolina.

Another gas customer, Rachel Harper, added: "It's not right that they are allowed to do that and no one is stepping in to stop it."

The N.C. Attorney General's Office said it has heard the pain over the gas price hikes from hundreds of callers over the past several days.

"I understand it's frustrating," Attorney General Roy Cooper said Thursday. "It is wrong to try and make a profit off of a natural disaster."

It may be wrong, Cooper said, but he concedes that the rapid gas price hikes were probably not illegal.

"There are no laws that cover price gouging that are in effect right now," he said.

For gouging laws to go into effect, Cooper said, the governor must make an official declaration of a disaster, like the governor does when hurricanes hit North Carolina. That's not the case with Hurricane Katrina, he said.

North Carolina also can enforce price-fixing laws if a group of businesses conspire together to unfairly inflate prices. But that's hard to prove, especially since retailers can argue the market is highly unstable because of the hurricane and concerns over the gas supply, Cooper said.

Cooper admitted this puts the burden back on consumers.

"They ought to use the power of their purse, not only now but in the future to shame those retailers who would take an unfair advantage," Cooper said.

He added his office still wants to hear reports of potential gouging, and his staff would investigate those reports.

He also said he plans to reevaluate the current law in hopes of making it more effective in the future.

[Art Eatman]

A news report this morning said that the pipeline out of the southwest which carries gasoline to the northeast and the Atlantic coast is operating at about 45% of capacity.

That says to me that shortages will continue for a while. The fact that the refineries of Louisiana will not be online for several days to several weeks contributes to this shortage. The throughput is some 1.2 million barrels per day, or roughly (very roughly) 12 million gallons per day...

Generally, the price increases will spread across the country.

And Hawaii will be the worst hit for shortages, since the state government instituted price caps for wholesalers.

[Waitone]

The only price gouging in NC is the tax increase that NC residents will experience as a result of increases in the market price of gasoline.

Keep you eye on the ball, people. In a competitive market gouging does not exist. The only monopoly in the oil business is the governments ability to tax. Better yet, government in is collusion with other governments to keep piling on the taxes. If NC was interested in saving money for the consumer, the idiot governor could simply suspend the planned tax increase and even roll back what is already on the pump.

And lest you think I am unfairly characterizing your idiot governor, I have a right. I lived in NorthCarolinastan in the People Republic of Mecklenburg for a mere 12 years.

[alan]

gm:

Re your reference to rumors and gas prices, quite possible, perhaps even likely.

On another aspect of rumors that their results, whatever you might or might not think about our military activity in Iraq, these were, the other day, a large number of people killed during a "religious event" in Baghdad. Seems that "rumors" of a suicide bomber" in the crowd was sufficient to start a riot of significant proportions, which led to the death of many.

Seems as if lemming like behavoir is not limited to lemmings.

[BeLikeTrey]

Yet another way government could've eased this. So many options and so little effort by the powers that be.


Just a side note:
I know for a fact that many people around here are re-thinking doantions as to how much they were going to send to help, or whether they would at all, with gas prices the way they are. The available versus "extra" money just got real tight for alot of those that give so generously.

[Coronach]

No.

The Gov't should NOT "ease" this by reducing gasoline taxes. The price is a direct reflection of supply. Yes, there is tax factored into it, but there was tax factored into it before Katrina, too. The high price is used to curb demand. Around here, it seems to be working. In Atlanta and some other places, it has been less effective. Any reduction in price, either via tax reduction or a simple price cap, will increase demand while doing nothing to increase supply. The result will be a shortage.

This is simple math. Repealing taxes or capping prices does not magically make gasoline appear in tanks. It does, however, make it easier for you to fill up your tank. This means you buy more gas. Do the math.

Mike

[jefnvk]

Once again, Mike is right on.

[Waitone]

Coronach, from one point of view you are correct. Different view, an across the board drop in cost without a change in supply may or may not increase demand. I suspect what will happen in pricing will equilibrate at a different level given the same supply. To the extent demand varies will provide a decent estimate of demand elasticity. I suspect demand in the aggregate for a wheeled society is pretty much inelastic. That is why governments love to tax things like cigarettes (inelastic demand due to nicotine and tar addiction) and gas (demand is essentially fixed). Fixed demand results in constant stream of revenue to taxing authority.

From a political view, a suspension of taxes by relevant taxing agencies will serve to drive home the point that it is government that is the profiteer. It is government that is the source of limits on supply. It is government (particularly in the case of NC) that will profit from the hardship of its citizens. In reality, removing taxes will be symbolic but symbols at time drives reality.

[Control Group]

Any reduction in price, either via tax reduction or a simple price cap, will increase demand while doing nothing to increase supply. The result will be a shortage.
I was with you right up until this statement. Or rather, I'm even in agreement with this statement, but you're not following economics the next step down the road.

In WI, we're paying $0.42/gal in taxes, total. 87 octane regular (at least, near my apt) is selling at $3.259. If the tax were to be eliminated, one of two things would happen, depending on the supply situation.

1) If the supply of gasoline to the station is essentially unrestricted, the price would drop to $2.839 (or thereabouts), reflecting the real lower cost of gasoline to the station.
2) If the supply of gasoline to the station is facing a real shortage, the price would either drop less than $0.42, or stay the same. That is, it would stabilize around the supply/demand intersection given the position of the supply curve.

You can't argue that stations will raise prices to maintain their supplies, then also argue that government shouldn't drop taxes because stations will run out of gas. If running out of gas is the issue, then government will not be able to make the price go down. All they can do is change the percentage of the price that goes in their pockets, since stations will raise prices to maintain supply.

What it comes down to is that the government taxation of gasoline is an external influence on price that is not related to supply/demand (or at least, it's not a dependent variable on either supply or demand). It is a leech on the marketplace, and removing that leech will not cause the marketplace to fail, which is what you're implying.

By the same token, in areas with real shortages, it also won't cause the price of gas to decrease. But that doesn't mean elimintating the tax is a bad idea.

[Flyboy]

However, Mike, I'd also argue that laws like the one in Georgia that automatically increase taxes when prices climb above a predetermined threshold are also an unwelcome interference in the market. In theory, it should help to further ration limited supplies, but I don't think artificial price management is a good thing either way. And, given that the artificial increase goes to the government, not the actual supply chain, I'd say it really is profiteering.

Not to mention that the government probably exempts itself from paying taxes, so it's effectively subsidized. I don't know if NC has the same policy as GA, but if that's what Waitone was talking about, I think reducing taxes in the form of rescinding the automatic increase is probably appropriate.

[Flyboy]

BTW, just a clarification: a lot of people have talked about reduced demand as a result of the increased prices. Demand does not decline in response to price; quantity demanded is responsive to price. Demand shift is when the entire demand curve shifts (ditto with supply and quantity supplied). If anything, demand has probably increased due to the fuel-intensive rescue and transport operations in the New Orleans area.

The difference between supply and demand and quantity supplied and quantity demanded was aggressively beaten into my head with a cluebat when I took econ, and it's an important distinction.

[Borachon]

Many of our stations in Mississippi are out of gas.

The refinery capacity at Louisiana was about 16% of the country. That 16% wasn't distributed thru out the country. Most of it was sold in the South. Now the South has had 100% of it's refined gas cut off.

The South and anybody else that bought Louisiana refined gas will experience a shortage. Simple enough to look at and understand.

[Coronach]

Flyboy, Waitone, Control Group-

OK, I was trying to keep it as simple as possible, since people cannot seem to even grasp the basics. And, frankly, I'm not an economist anyway (but I did stay at a Holiday Inn Express last night), so I'm leery of stepping too far out of my depth.

In any event, suspending interfering taxes like GA's would not hurt, but neither will they help. The only thing reduction of tax does is make the price at the pump lower, which will allow people to buy up more of a limited supply. That, or it will cause a, say, $0.40 reduction in the price from taxes, and an immediate $0.40 increase in base price. I understand the government-profiteering angle, but in the most basic supply-demand sense, the only thing that matters is the price at the pump, not where the money goes after it is collected.

I understand (and agree with) you, Control Group. My point is that if you remove the tax the market will adjust...and will do so by driving the price (as paid to the retailer) higher, unless there is a change in supply. The net result will be:

1. Less revenues to government (small loss)
2. More PO'ed leftists, who will just accuse the gas stations of price gouging again.
3. No increase in gas in the holding tanks
4. No increase in gas in my own tank.

The only way to beat this is to increase supply or reduce demand. Demand will stabilize shortly, as everyone gets their tanks and hoarding supplies topped off, and rate of purchases will fall to the rate of actual consumption.

Supply is more iffy. Short term it will be OK. How long until the refining shortfall hits, though? And where will it go from there?

Mike

[Coronach]

To clarify:

Short term will be OK except in the south. If they've exhausted on-hand supplies and the pipeline to move the refined gas is compromised, supply wil continue to be tight.

And, to clarify again,

Reducing the taxes, in and of itself, will do not harm. It will also do no good whatsoever. Government, however, shouldn't do it, because if they do, people will expect a price cut. One of two things will happen:

1. They'll get it, and supply will dwindle further. (This was my original point)
2. They won't get it, and we'll all be forced to listen to people who slept through econ 101 speculate about how the Oil Companies are lining their pockets at our expense. Again. (this is Control Group's counter-argument, with which I agree)

Neither one is a winner.

Mike

[GunGoBoom]

Gas pricing has always bothered me. If they bought the supply that is in their current tanks underground at a certain price then why should it go up before they get the next higher priced supply?

Because it's their gas, so they can charge whatever they feel like (provided they don't have a monopoly). That's what capitalism is all about. Theory being.... don't like it? Go to a competitor or procure your own gas or don't drive. Simple supply and demand in a capitalist system - works VERY well 99.9% of the time.

[R.H. Lee]

OK here are the numbers on my road trip yesterday. 348.3 miles used 7.951 gallons (@ $2.979 per gallon-today's local price). That's 43.81 mpg. That's traveling at 80+mph with the a/c running, and a period where I got stuck in stop and go rush hour traffic for 20 miles.

Gasoline prices were steadily rising before Katrina. The reason there are shortages in some parts of the country have nothing at all to do with price. Let me repeat that; shortages do not exist because the price was too low. There are shortages because the hurricane knocked out refineries and distribution lines. In other words, it's physically impossible to get gasoline to some parts of the country. If it cost $25 per gallon, there would still be no gasoline. Got it?

[chaim]

On radio news I had heard that, in addition to the lost refinery capacity (which will cause increased prices, and hardship through this winter), pipelines serving much of the nation (including, at least partially, this area) are down. They will likely have at least reduced capacity for weeks. This expert they were interviewing predicted that if the pipelines aren't back up within days we'd be seeing 1970's style gas lines and shortages.

Some areas are already seeing this. I'm glad I'm not in Atlanta.

Around here some gas stations are running out of gas, and others are being limited by their suppliers as to how much they can sell per day.

The gas stations only have enough stock for 1-3 days (depending upon the area). The suppliers may have a couple weeks worth. With a decreased supply for a while we will be facing shortages, but outside a few limited geographic areas it won't be an outright crisis.

As for local prices, most stations around me were 2.72-2.79/gal just a couple days ago. Two days ago on my way to work a local station was still $2.72/gal but I didn't have time to fill up. On my way home from work when I filled my tank the same station was $2.99. Yesterday on my way to work (only a few hours after filling at $2.99) it was $3.09. There is a nearby station that is charging $3.45.

As for the "gauging" conversation...stations charging what most in the area are charging are not gauging. Around here that means anything from $3-3.15/gal isn't under or overcharging. However, those charging $3.40 probably are.

Short term gas price will get ugly. So I don't begrudge those who want to keep their cars full (I will be keeping my tank full for a while). Medium-term (months?) gas will probably stay over $3/gal. However, once refineries in NO, pipelines in the area, and offshore wells are back online (months to maybe a year) things should be nearly back to normal.

That said, I am going to watch things closely. I bought a mid-sized car (Hyundai Sonata) a year ago. I wanted the extra comfort and after a car crash messed up my back a couple years ago I wanted the extra safety of the larger car. However, I only get in the upper 20s MPG in the winter without AC (not bad) and around 22MPG in the AC months (minimum 6 months and really around 7 months around here) even with the 4cyl engine. If gas breaks $4 or $5/gal and stays there much more than a month, if it stays over $3.50 for more than 6 months, or if it stays over $3 this time next year, I'm not going to have much choice but to replace it (and I love my car). I just won't be able to feed it (my new job was a big pay cut, and I'm about to be a grad student again, I can't afford big fuel cost increases). I'm already pricing used Volkswagen Golfs and Jettas with the TDi engines and used Civic Hybrids and Toyota Priuses.

[Control Group]

Gasoline prices were steadily rising before Katrina. The reason there are shortages in some parts of the country have nothing at all to do with price. Let me repeat that; shortages do not exist because the price was too low. There are shortages because the hurricane knocked out refineries and distribution lines. In other words, it's physically impossible to get gasoline to some parts of the country. If it cost $25 per gallon, there would still be no gasoline. Got it?
You can repeat that all you want, that doesn't make it true.

Interruptions of the supply of gasoline do not make gasoline that's already been delivered somehow vanish. Prices spike to preserve the supply of gasoline that's already on hand, precisely because there isn't any more en route.

Given that stations can't be resupplied, which station do you think is going to run out of gas sooner: the one selling it at $2.50/gal, or the one selling it at $25/gal?

If you answered the one selling at $2.50/gal, you're right. You've also just demonstrated why shortages result from underpricing: at the end of the week, the one selling at $2/gal will be out of gas. The one selling at $25/gal will not. Thus, the shortage at the first station. Caused by underpricing.

If, on the other hand, you answered the one selling at $25/gal, I'm very curious as to your raionale.

[R.H. Lee]

Regardless of whether the price is $2.50 or $25 per gallon, the supply has been cut off. The station selling for $25 per gallon has no more gasoline on hand than the one selling at $2.50. Nobody will buy from the $25 seller until the $2.50 seller runs out, then enough people will buy from the $25 seller until his supply is exhausted, and that will be quick. A high price does not guarantee availability, yet you continue to assert that it will. There is no gasoline in some areas because of the hurricane. Excessive prices did not change that eventuality.

[Flyboy]

Regardless of whether the price is $2.50 or $25 per gallon, the supply has been cut off. The station selling for $25 per gallon has no more gasoline on hand than the one selling at $2.50. Nobody will buy from the $25 seller until the $2.50 seller runs out, then enough people will buy from the $25 seller until his supply is exhausted, and that will be quick. A high price does not guarantee availability, yet you continue to assert that it will. There is no gasoline in some areas because of the hurricane. Excessive prices did not change that eventuality.
You're missing the point. The supply hasn't been cut off, the resupply has been cut off. You're right when you say that filling stations are left with only the supply on hand, and you're right when you say that people will buy the cheap stuff before they buy the expensive stuff. However, you're completely failing to consider that an increase in price will cause people to use less, extending supply.

Right now, gas is about $3/gallon here in Norman. I'm going to go to the range and go hunting tomorrow. It's not that big of a deal to me. If it were $5/gallon, I'd stay home. At $10/gallon, I'd be walking or biking everywhere I go, and at $25/gallon, I'd be increasing supply by siphoning my own tank and selling the contents. In any case, as price goes up, quantity demanded goes down. People will cut their use for nonessential purposes.

When you have a (temporarily) fixed quantity supplied, and quantity demanded per unit time goes down, then the supply will last longer. That "longer" means that The Powers That Be have more time to find a way to get more fuel in. Right now, there are exactly two limiting resources in the fuel crunch: 1) manpower, and 2) time. More manpower means that work gets done more quickly (up to a point). The second limiting reagent, time, is the big one: some things just can't be done any faster. The only way to surmount those obstacles is to wait. Through rationing, the available fuel can be extended to last for the duration of the wait. As it turns out, and as several people (including myself) have explained, the market provides its own natural rationing devices in the form of price increases. The fuel supply will last longer because fewer people will be willing to stomach the price.

Incidentally, this is the very same concept that explains oil prices (and any other commodity). I keep hearing people say "we're running out of oil!" We're not. We're just running out of $40/barrel oil. There seems to be plenty of $70/barrel oil, and when that runs out, I'll bet we can find some $100/barrel oil down there somewhere. When supply runs thin, throwing money at the problem causes more to be found, while reducing the quantity demanded and stretching the limited quantity available a lot further.

[Control Group]

Regardless of whether the price is $2.50 or $25 per gallon, the supply has been cut off. The station selling for $25 per gallon has no more gasoline on hand than the one selling at $2.50. Nobody will buy from the $25 seller until the $2.50 seller runs out, then enough people will buy from the $25 seller until his supply is exhausted, and that will be quick. A high price does not guarantee availability, yet you continue to assert that it will. There is no gasoline in some areas because of the hurricane. Excessive prices did not change that eventuality.
No, I do not assert that. I assert that a high price will delay running out of gasoline. Unless you believe that there will never be resupply of gasoline, it's possible to delay running out for long enough that you get resupplied before it happens, which is why prices have gone up.

For what you say to be true, you have to accept at least one of the following premises: either there will never be a resupply of gasoline, in which case no price will be high enough to stretch the supply long enough. Or, people will buy the same amount of gasoline regardless of price, in which case changing prices will have no effect on how quickly one runs out.

The former is almost certainly untrue. We have every reason to think that the gasoline supply chain will, at some point, resume operating to some extent.

The latter is also untrue, if for no other reason than that if you raise the price high enough, some people who would like to buy gas will simply not have the money to do so, even if they're willing to pay it. I burn almost six gallons of gas a day over a 210-mile round trip commute to work. Since I need to keep earning my paycheck, gasoline is my first spending priority. But, at $25/gal, gas would cost far more than I earn, so I have to stop buying it. This will mean the gas station I frequent has a supply which lasts longer.

The logic is very simple. Stocks last longer the higher the price, because fewer people will/can buy gasoline. If the station can make them last long enough, they will still have gas available right up until resupply is possible. Hence, gas stations increase the price in order to make their stocks last longer. If the stocks don't last long enough, then the price wasn't high enough. They now have a shortage caused by underpricing. By extension, this means that stations already out of gasoline have already failed to price their stocks correctly: they're just further down the timeline.

This is all straightforward economics. The scarcer the supply, the higher the price at any given level of demand. The higher the price, the lower the quantity demand.

[c_yeager]

Whenever a station goes empty due to increased demand it is *always* a result of a psychological reaction among the populace.

Think about it. People use a finite amount of gas. You burn the same amount of gas going to and from work regardless of anything else. The station has supplied that quantity of fuel every day up untill today, when they run empty. How did people suddenly start consuming mroe gas over night? They didnt, they just heard that something happened, and everyone rushed out to buy gas RIGHT NOW. All it means is that there will be fewer people with empty tanks tomorrow.

People do seem to panic when gas stations run out of fuel though. Its almost like a bank-run, when people suddenly realize that there isnt a magical pit full of cash in the back.

[R.H. Lee]

No, I do not assert that. I assert that a high price will delay running out of gasoline. We're in agreement. However, the delay is insignificant if it fails to last until the re-supply :rolleyes: arrives. Such is the case in portions of the east and southeast right now.

I assert that when the re-supply arrives, the prices will be higher than warranted by reasonable operating profit motives, and instead will be dictated by pure avarice and a desire to exploit. That to me is extortion and a reason to place price controls and/or sanctions against gougers. Especially with something as vital to the economy as gasoline. In other words, if the oil/gasoline producers/distributors can't police themselves, public policy will and should regulate them. That's all I'm sayin'

[Control Group]

I assert that when the re-supply arrives, the prices will be higher than warranted by reasonable operating profit motives, and instead will be dictated by pure avarice and a desire to exploit. That to me is extortion and a reason to place price controls and/or sanctions against gougers. Especially with something as vital to the economy as gasoline. In other words, if the oil/gasoline producers/distributors can't police themselves, public policy will and should regulate them. That's all I'm sayin'
Fair enough. While I believe that the nature of the competitive marketplace will address the problem of price gouging without government interference, I also understand that this belief is a matter of opinion, which many (including yourself) disagree with.

If you're right about price gouging happening once the throttling of supply is no longer a real factor, then I agree that dealing with it is a legitimate function of government. I would argue for taking the approach of punishing gougers rather than pro-actively setting price controls, since I don't believe price controls, no matter how well-intentioned, will adequately adapt to market forces. But I will accept that actual gouging and/or price fixing should be dealt with.

Again, I think the market will take care of the problem without government intervention, but assuming that it doesn't, I agree with you completely.

[Coronach]

We're in agreement. However, the delay is insignificant if it fails to last until the re-supply arrives.Not quite. If I run a station and I run out of gas on Sunday, I'm screwed if resupply is Saturday. So are my customers. If, on the other hand, I bleed dry on Friday, things are a lot less dire. This is, in fact, the whole point of this exercise. Hopefully the price will rise fast enough and high enough to ensure that supply lasts until the (reduced, but hardly nonexistent) resupply occurs. If not, hopefully it will be close.Such is the case in portions of the east and southeast right now....which is proof positive that they failed to raise price high enough, quickly enough.I assert that when the re-supply arrives, the prices will be higher than warranted by reasonable operating profit motives, and instead will be dictated by pure avarice and a desire to exploit. That to me is extortion and a reason to place price controls and/or sanctions against gougers. Especially with something as vital to the economy as gasoline. In other words, if the oil/gasoline producers/distributors can't police themselves, public policy will and should regulate them. That's all I'm sayin'In other words, you're in favor of quasi-socialism. I'm not.

If they price gas too high, people will continue to buy ONLY what they MUST. One of the multitude of retailers will note that gas is overpriced, undercut the competition, and sell more gas, thus making more money. Then the fight to the bottom will be on.

Doing it the other way will cap the price, thus allowing demand to outstrip supply. This will result in shortages, and we'll be right back where we are now.

Now, if you have evidence of price-fixing or collusion, that's a whole other kettle of fish. I have not seen any yet, and the mere fact that gas is expensive when stations are going dry is hardly a sign of it.Think about it. People use a finite amount of gas. You burn the same amount of gas going to and from work regardless of anything else. The station has supplied that quantity of fuel every day up untill today, when they run empty. How did people suddenly start consuming mroe gas over night? They didnt, they just heard that something happened, and everyone rushed out to buy gas RIGHT NOW. All it means is that there will be fewer people with empty tanks tomorrow.Almost correct. In tight times people will conserve. In lucrative times, people will consume more. In panic times, people will fill every container they have with gas, and consider buying more. By and large, though, you're correct. This means that the post-Katrina spike will fade rapidly, and should already be doing so.

Oddly enough, gas has been $3.09 everywhere around here for the past two days. Suddenly, I'm seeing $2.99 signs. A ten cent decline in the past 8 hours. It's not universal, even for here, but it is a sign that the market might be subsiding to a more normal level.

There are shortages because the hurricane knocked out refineries and distribution lines. In other words, it's physically impossible to get gasoline to some parts of the country.The price spiked the day after Katrina wiped out the gulf coast. While what you say is true, especially in the south east, the irrational increase in demand caused the price spike in existing supplies. The inability to efficiently resupply certain areas over the next three days contributed to the problem. The refinery issue won't be felt for a week or so, yet, which is why gas prices will not immediately subside to pre-Katrina levels. They'll drop, but not down to $2.50/gallon, at least not until the refinery output is stabilized.

The hit to our refining capability and the immediate price spike post-Katrina are two separate issues, just as OPEC and gas retailers are two separate groups.

Mike

[Derek Zeanah]

I just don't agree that price gouging can actually happen in a market like this, where everyone is selling essentially the same commodity.

Think about it: I decide that the demand curve for gas is fixed, as everyone needs to drive, right? So I decide to get rich by selling gas for $100/gallon. More than $1,000 per tank - mua ha ha ha!

Except...

No-one will buy it. Not even at $100/gallon, or even $10 per gallon.

I could decide to collude with all the other sellers in the area to raise rates to $10 per gallon (already illegal), but then all it takes is one person to sell his fuel for $7 per gallon and the scheme is broken -- he gets rich, and my cashflow is zero.

What you end up with is margins that are barely enough to stay in business -- it's how markets work. Gas stations end up making money on twinkies, chips, candy, and lotto tickets. Gas is essentially sold at cost.

You can't gouge. What you can do is allow your rates to go up in response to supply, so you've got a steady stream of twinkie buyers through the rest of the week instead of selling out on Monday and losing all your business -- remember, twinkies pay salaries, and a big cardboard sign saying "no GAS 'til SATURDAY" means no twinkie sales, but you've still gotta pay your employees.

You end up with a situation where prices jump to the point where most people don't want to pay them, but the UPS and ambulance and Fire Department and milk delivery folks can still get it. If prices don't go up, then supplies get depleted, and those folks we all agree should be able to buy gas because their need is provably greater than our need to go buy ice-cream, can't.

This applies to stuff like generators too. Yeah, it sucks when I can't buy a $300 generator for less than $2,000 and it sucks to live without air conditioning in a humid southern summer. But there are folks willing to pay $2,000 per generator (like the old folk's home down the street trying to keep feeble old ladies alive), and they can because all the cheap bastards like me weren't allowed to suck up all the available units.

You know what's better? The guy smart enought to buy generators sees the profit, and orders 5 times the number for next year on the off-chance that they'll be needed. If not, he can sell them at cost at the end of the hurricane season and cheap bastards like me can get them then.

Works for everyone. Certainly better than centralized control.

[jefnvk]

Once again, those saying the rise in price is due strictly to greed have yet to show an example. Show me some examples of what gas costs to the retailers, what it is projected to cost to them next week, and what they are selling for, plus how much they would normally make on gas.

Until someone can do that, I am going with the more reasonable and much more likely explination that they are trying to either save the supply they have, or make enough to pay for the next fill up.

[pete f]

The price of gas is usually set by the wholesaler not the retailer and the retailer will use the price of the gasoline in the ground OR the cost of the gas to refill his tank in the ground. which ever is higher.

I drive a diesel jetta, i get 56 Mpg most days. if it is hot I can get 59 to 61 Mpg. it still affects me. I have a new sprinter Van. from dodge. that gets triple the gas milage that my old Ford E350 econolines.

What bothers me is the person who drives 40 miles a week who demands to stop and spend time in a gas line on the fear that "theres a gas shortage coming.'

[R.H. Lee]

In other words, you're in favor of quasi-socialism. I'm not. That may be a whole 'nother discussion, but it is no less than a knee-jerk reaction ignoring the realities of the corporate/government incestfest that rules economics.

If they price gas too high, people will continue to buy ONLY what they MUST. One of the multitude of retailers will note that gas is overpriced, undercut the competition, and sell more gas, thus making more money. Then the fight to the bottom will be on. Uh huh. That's the way it's supposed to work. I haven't seen a 'gas war' in what??? 30-40 years??

Gasoline (& diesel) is the primary substance that fuels this (and the world's) economy. Not only is its availability vital, but it must be priced at a level that allows industry and commerce to thrive. When the small group that controls supply (re-supply) frivolously manipulates price and availability the result is an increase in the cost of everything and a lower standard of living for everyone. Corporate tyranny is ok by you but government regulation is by definition socialism. At some point common sense needs to override blind ideology.

[tomhorn]

mobile oil has payed off all there outstanding bills bought back all there stock and put 9 billion dollars in the bank . since jan 05 wow some body is making money .
As for overseas 22 per cent uneployeement some countries have 3 months vacations .
mom and pops dont set the price people selling them the gas sets the price they raise the price to pay for it .
oil companies are true Americans makes me sick .

[R.H. Lee]

Ergo, there is another consideration impacting price. Namely, the tendency of the sheep to run en mass to the pumps and tank up whenever something scary happens, and the reality of over-the-top reactions to the exhaustion of on-hand supply, which is what is happened in Atlanta when everyone ran to the pumps at once. Uhhhhh....there were a whole lot of people trying to get away from a hurricane. That might cause an increase in the demand for gasoline, and hardly qualifies them as sheeple.

The "oil monopoly" has zilch to do with this sudden price hike in gas. This is 100% the retailers, trying desperately to have something to sell for the next week. Think they're making a killing on gas? Try having zero income for a week on for size. Mom and pop places could go under after a few weeks of that. How can the retailers be solely responsible, when their costs are steadily increased by the producers? You can't have it both ways. There is a small group who control the refineries and distribution; they are the monopoly. They have been increasing prices and their profits are at record high levels. That is hardly the definition of a 'free market'.

[Coronach]

That may be a whole 'nother discussion, but it is no less than a knee-jerk reaction ignoring the realities of the corporate/government incestfest that rules economics.Not so. I'm hardly opposed to limited regulation in some industries. When you start using phrases like "price control" however, you're basically espousing a form of socialism. If this sounds offensive to you, perhaps you should more closely examine the implications of your position.

Uh huh. That's the way it's supposed to work. I haven't seen a 'gas war' in what??? 30-40 years??I see gas wars every day. I see neighboring stores charging different rates all the time. Usually they're close to one another because- surprise! that's what the market will bear.Gasoline (& diesel) is the primary substance that fuels this (and the world's) economy. Not only is its availability vital, but it must be priced at a level that allows industry and commerce to thrive. When the small group that controls supply (re-supply) frivolously manipulates price and availability the result is an increase in the cost of everything and a lower standard of living for everyone.Note that we've shifted emphasis from the gas retailers to the gas distributers and oil comanies, now. Lets talk apples to apples.Corporate tyranny is ok by youNow, hold on. Once again, if you have evidence of collusion or price fixing, or of a monopoly, you have a situation where the free market model falls apart. We can, of course, go on a tangent in reference to this, but you've now stepped several degrees of separation away from gas retailers and their post-Katrina price hike. Let's keep talking about gas retailers, as opposed to oil companies. If you want to claim the retailers or their distributers are tampering with the price, cite your case. If you want to blame Conoco-Phillips, you'll be hard pressed in this instance- any price increases they have instituted have not had time to be felt downstream.but government regulation is by definition socialism.Well, at least you have that more or less correct.At some point common sense needs to override blind ideology.Actually, I agree with that. Your argument, however, is not a shining example of common sense. It seems to be an ad hoc mishmash of partly-right and mostly-off-point ideas used to justify a position opposed to gas retailers hiking up prices when supply is fixed and demand has spiked.

Mike

[Coronach]

Uhhhhh....there were a whole lot of people trying to get away from a hurricane. That might cause an increase in the demand for gasoline, and hardly qualifies them as sheeple.Nice try. No one in Atlanta was trying to drive away from the hurricane, and yet Atlanta is getting slammed with gas shortages. Hmm.

The demand to which I am referring is the simultaneous gas-run made by everyone in the USA one day after Katrina stormed ashore. Everyone in Atl went to the pumps. The supplies got tight. Then, due to the storm, the resupply did not happen, and supplies got tighter.

How can the retailers be solely responsible, when their costs are steadily increased by the producers? You can't have it both ways. There is a small group who control the refineries and distribution; they are the monopoly. They have been increasing prices and their profits are at record high levels. That is hardly the definition of a 'free market'.You keep repeating this. Make your case for collusion or price fixing, or let it go. Note that when you have a significant portion of our drilling, importing, refining and transport capability decimated by a natural disaster, you're going to be hard pressed to find proof in a $0.50 hike in the cost of gas, when taken alongside widespread shortages in key urban areas.

The fact that gas prices went up is not proof of anything, especially when there are readily identifiable (free!) market forces impacting the price.

Mike

[jefnvk]

mobile oil has payed off all there outstanding bills bought back all there stock and put 9 billion dollars in the bank . since jan 05 wow some body is making money .
As for overseas 22 per cent uneployeement some countries have 3 months vacations .
mom and pops dont set the price people selling them the gas sets the price they raise the price to pay for it .
oil companies are true Americans makes me sick .

OK, once again there is nothing against making money. You want gas companies to make no money? My guess is that not too many will stay around selling at cost.

I don't see how other countries unemployment or vacations affect us.

The mom and pops part is right.

People thinking that there should be rules against making too much money, or preventing selling their product at what they see fit make me sick.

[Waitone]

Classic example of the market place at work. Profits go up when products are in short supply. That's just the way markets operate.

They work just the opposite when products are plentiful. No one bellyaches when oil companies have substandard performance yet let them show increased profitability during a shortage and everyone is outraged.

Humans are driven by greed. Those who are alturistic will paint a thin coat of excuse over it but the facts are no profitability no interest in providing service. The wonder of the market system is it rigorously enforces penalties when greed rules and market principals are violated. No one can run up prices willey nilley without market consequences being imposed. An unfettered market is its own check on human greed.

[Firethorn]

I'll chime in that as gasoline shoots ever higher, that eventually people are going to start making changes. I think ethanol becomes competitive at ~$4 a gallon. Lower in the midwest around the production facilities, higher in other areas. Hybrids/AltFuels are likely going to outnumber standard vehicles in the next ten years.

I'm already shopping for an E85 compatible vehicle(most of the ones I find are trucks and I don't want a truck), or an affordable conversion kit. I was looking at Subaru before the last price increases, but their vehicles only take standard gas.

I'd look at hybrid/electric, but I have concerns about Minot, ND being able to handle them, they also don't have the feature set I'm looking for.

Heck, are there any E85 hybrids?

[gm]

filled up last nite after work..paid 10 cents per gallon less than the day before.the fuel truck was also there filling the stations tanks.On my way back, I passed through a small town about 10 miles south,it was going up. MY home town,20 miles away from where I filled up, had it for 299,the duke across the street still had it at 309,folks were still buying gas there in spite of the extra cost probably cause of the extra goodies and junk food,neither place was packed with cars..I did notice diseal had gone back up though.


lots of people I know are considering hybrid cars now,they are a tad more expensive but after being in this mess are considering it to pay off in the long haul should it keep happening.I drive a 4 year old honda,it gets great mpg but Im going to consider the hybrids too now.the technology is what 60 years old..gas and electric motors?I think the uncertainty of gas prices and the waiting and pricing games have gotten alot of people fed up and are starting searching for more reliable/stable transportation costs.eventually,it would be nice if manufacturers streamlined the hybrid market and made them cheaper for everyone.We are also updating our heating to the most efficient design minus gas usage.the gas companies can eat it someday,Im tired of the games.


not to stray too far off here but there are alot of great ideas to power automobiles and trucks that dont use gas,why dont we hear more about them?

[R.H. Lee]

I'd wager that in the months to come, we'll see some successful prosecutions of individual price gougers. I predict the 'free marketers' will be either strangely silent, or join the chorus of condemnation then.

[Titus]

I'd wager that in the months to come, we'll see some successful prosecutions of individual price gougers.

Why not? All you need is a jury full of people that have no more understanding of Econ 101 than most of the people who've been boo-hooing the past few days. And there are plenty of them around.

I predict the 'free marketers' will be either strangely silent, or join the chorus of condemnation then.

Well, I guess some people could be intimidated into denying basic economic reality. Or they might just be politicians.

D@mn free market! What we need right now is some good old fashioned communism!

[Firethorn]

I disagree. As long as no fraud was commited, both parties agreed(however grudgingly) without force, etc, I'll be upset if a party is sued for 'price gouging'.

[R.H. Lee]

D@mn free market! What we need right now is some good old fashioned communism! A 'free market' is an environment where fair market values are set between a willing seller and a willing buyer with [/b]all the facts known and neither party being under duress[/b]. Since a small group of gasoline producers control the supply, you have a monopoly, not a free market.

When all else fails, shout 'communist'. No, communism would be more along the lines of nationalizing the oil industry (at least the fuel producers) in the interests of public policy. That's not entirely out of the realm of possibility, given the recent SCOTUS ruling and the fact that Democrats will probably control the government come 2008; the Republicans having done nothing during their term.

[jefnvk]

I'd wager that in the months to come, we'll see some successful prosecutions of individual price gougers. I predict the 'free marketers' will be either strangely silent, or join the chorus of condemnation then.

STILL NO ONE HAS SHOWN ME HARD NUMBERS OF HOW PEOPLE ARE GOUGING, OR EVEN GIVEN A DEFINITION BEYOND 'OIL COMPANIES MAKING MORE MONEY THAN THEY SHOULD'

A 'free market' is an environment where fair market values are set between a willing seller and a willing buyer with [/b]all the facts known and neither party being under duress[/b]. Since a small group of gasoline producers control the supply, you have a monopoly, not a free market.

The oil supply is NOT a monopoly. MONOoploy means ONE. As in if Shell was the only supplier. REPEAT AFTER ME: Mono means ONE. ONE. This is just proving Titus's point that all you need is a few people without any economics background.

What you have is an Oligopoly.

In all honesty, unless you are forced to buy something by the government, I fail to see how anything should be prosecuted for gouging. Kinda reminds me a while back, when Microsoft was found guilty of overcharging consumers. There were other products out there, no one was forcing them to buy Microsoft, why should they be punished (I am leaving out the other stuff they did, that was borderline illegal).

I se no point in continuing on in this until:
1) Someone shows me some hard figures on how much costs and profits are at each step of the process
2) Someone shows me what normal figures would be
3) Defines 'gouging' past 'big oil making money'
4) Using laws of economics, shows how the change in price was not due to the potential lack of supply in the future, and simply due to 'gouging' by whatever definition they came up with

[Titus]

No, communism would be more along the lines of nationalizing the oil industry (at least the fuel producers) in the interests of public policy.

And would be more in line with your way of thinking...

A 'free market' is an environment where fair market values are set between a willing seller and a willing buyer with [/b]all the facts known and neither party being under duress[/b].

Okay, how 'bout this then? We don't let anyone sell gas until after all the damage has been cleaned up? We wouldn't want anyone feeling they're buying under duress.

Since a small group of gasoline producers control the supply, you have a monopoly, not a free market.

What's the minimum number of producers of a product you require for "not a monopoly"?

[R.H. Lee]

And would be more in line with your way of thinking...
No, I'm just not drinking the same corporate/government KoolAid™ you are.

What you have is an Oligopoly.
That's a distinction without a difference. The result is the same.

In all honesty, unless you are forced to buy something by the government, I fail to see how anything should be prosecuted for gouging. IF (notice I said if) supplies are manipulated, rationed, crimped by producers to support high prices, it's not a 'free market', and those high prices would qualify as 'gouging'. Gasoline is not for the most part a 'luxury' item that you can choose to forego. For nearly all of us it's a basic economic necessity. Its consumption is guaranteed into the future as far as the eye can see. There is no reason for oil companies to enjoy windfall profits at the expense of the overall economy.

[jefnvk]

It may be similiar, but it still shows the lack of knowledge of many in economics when I keep hearing people cry that the oil industry is a monopoly, over and over, its a monopoly, its a monopoly.

[Flyboy]

IF (notice I said if) supplies are manipulated, rationed, crimped by producers to support high prices
I agree; when producers manipulate the market, it's not a free market.

Unless, however, you're alleging that the gasoline producers orchestrated the hurricane, that statement's a non sequitur.

BTW, an oligopoly does have some significant differences from a monopoly. It's not as free as a market with a large number of suppliers, but it does provide some protection against the producers abusing the market, unless there's collusion. Are you alleging collusion (a criminal action) among the producers?

There is no reason for oil companies to enjoy windfall profits at the expense of the overall economy.Sure there is. They have a product that's in high demand right now. That's how capitalism and free markets work: if a lot of people want your product, you can make money at it.

By the way, they'll not be keeping a lot of that money. Turns out that building or rebuilding refineries is expensive. Guess where those "windfall profits" are going to go.

Titus commented that you seem to be trending toward communism. I'll not use the dreaded c-word, but you clearly seem to be favoring centralized (governmental) control of the market. Rather than trying to infer your beliefs from your posts, why don't you tell us all what you would do, were you king? How would you solve this temporary interruption in the supply chain?

[R.H. Lee]

Beginning in the late 1990s, the industry saw increased consolidation as already large oil companies merged with each other, including Exxon (the largest U.S. oil company) with Mobil (the second largest; forming ExxonMobil), Chevron with Texaco as ChevronTexaco, British Petroleum with Amoco and ARCO as BP, and Conoco with Phillips Petroleum as ConocoPhillips.
http://www.answers.com/topic/history-of-the-petroleum-industry

Crude oil production in Opec only costs between $7 and $8 per barrel.

Meanwhile, based on their 2003 financial reports, Chevron Texaco spends $3 per barrel for exploration, and Royal Dutch Shell, almost $4 per barrel. This means that the upstream (exploration and production) costs plus the royalties range from $15 to $17 per barrel, or a difference of $18 to $20 per barrel from the latest price of Dubai crude. The difference between the posted price and the estimated total cost of producing crude oil represents windfall profits for the oil companies.

Giant oil companies' strategic control of crude oil production is further strengthened by their domination in the downstream level of the global oil industry. The six biggest oil TNCs in the world (Exxon Mobil, Royal Dutch Shell, BP, Total, Chevron Texaco, and Conoco Phillips) own 186 of the 744 refineries in the world. As of 2003, they also accounted for 19 percent of global refining capacity of 112.4 million barrels per day and 16 percent of global sales of petroleum products of 79 million barrels per day.
http://www.inq7.net/opi/2004/jun/15/letter_2-1.htm

and this:

http://www.citizen.org/documents/oilmergers.pdf

There's plenty more hard verifiable numbers available. But why let facts get in the way of ideology?

Anyway, I'm on my way to the range right now. Gonna drive my truck, which only gets 16 or so mpg :)

[Titus]

No, I'm just not drinking the same corporate/government KoolAid™ you are.

Yeah, it's either the KoolAid or the bachelor's in Industrial Management and Finance MBA that drives my view of basic economics.

Gasoline is not for the most part a 'luxury' item that you can choose to forego. For nearly all of us it's a basic economic necessity.

Why? What happens as prices go up? Shortages persist? What happened in the late 70s/early 80s?

There is no reason for oil companies to enjoy windfall profits at the expense of the overall economy.

What is the correct level of profit for a company? How will you enforce that? This makes sense if I'm going to run on the Dean/Titus '08 ticket, but not if I know how the free market actually works. Why is that?

[Titus]

Crude oil production in Opec only costs between $7 and $8 per barrel.

Q: Is price a function of cost?

[Titus]

Titus commented that you seem to be trending toward communism. I'll not use the dreaded c-word, but you clearly seem to be favoring centralized (governmental) control of the market.

Well, if MONOpoly=oligopoly, then I get to use the c word! ;)

By the way, they'll not be keeping a lot of that money. Turns out that building or rebuilding refineries is expensive. Guess where those "windfall profits" are going to go.

Exactly! I think I may be stealing from the PJ O'Rourke book I recommended, but as it turns out, at the Exxon offices, Scrooge McDuck isn't in his vault swimming in his pile of cash... :)

[TaxPhd]

jefnvk, Mike, Titus, and others,

This is an interesting discussion. It appears that those of us who have actually studied economics seem to be on the same page.

This whole thing reminds me of one of Billy Bob Thornton's lines from Tombstone:

"I feel like I'm arguing with my sister's kid's."

For those on the price gouger/market manipulator side - show some evidence of price fixing, because without it, you don't really have an argument.




Scott

[Titus]

http://www.answers.com/topic/histor...roleum-industry

Hey, what does the rest of the paragraph you quoted say?

http://www.inq7.net/opi/2004/jun/15/letter_2-1.htm

This is under "Letters to the Editor" and contains gems like this:

Consider this: If Shell oil were pumped from Shell oil fields into Shell storage tankers, and through Shell pipelines, on to Shell retail stations, what can prevent Shell from manipulating the amounts in their transactions? Of course, there are "commodities markets" in the global oil industry but if giant companies are both the buyer and the seller, such markets lose their significance.

[mussi]

Coronach left out a few ideas how the fuel price problem could be alleviated.

Let's have a look at a country that is much-maligned by every other European country and has become the target of many jokes: Belgium.

After the fuel prices have become very high, they did something very sensible. Every family gets a 75 Euro rebate in their next tax return, which equals 75 more Euros to spend, car or not.

The effect? The price at the pump stays high, but at least these who really have to commute by car get a little rebate. And those who don't have a car can at least partially offset the additional cost of heating oil, more expensive deliveries and so on. Maybe some countries could take a hint?

[owen]

sounds like another wealth redistribution scheme to me.

In other words, Belgium is making a killing of the taxes on the gas, just from the people that buy gas.

At the end of the year, they redistribute the money to everybody.

If that was my good idea, I would hope to be much maligned also.

Why don't they rebate the money to the people that spent it, or better yet, just lower the taxes on gas to get the price back to "reasonable," whatever that is.

3 companies owning 1/4 of the refineries, and 18% of the capacity does not make a monopoly, or even an oligopoly. It indicates to me that are probably 50 or 60 players in the game. The big guys are always much bigger than the little guys in every industry. Look at the gun industry...5 or 6 huge companies, and dozens, hundreds of small manufacturers. Is the gun business a monopoly?

Oh and the surest way to make sure that those big companies don't become monopolistic...huge profits. High profits will attract new companies to the business like poop attracts flies. Then those competitors will undercut the big guys, and prices will drop. I think Adam Smith called it the invisible hand.

Of course, I'm sure you think that companies that produce products you "need" should be charities.

[JohnBT]

I was just browsing a shotgun board and noted some posts that prices in parts of the country have fallen 50 cents/gal. Looks like the supply is coming back.

John

[Moondoggie]

If anybody's interested in perusing current gas/diesel prices all over the country you can go to the Flying J website.

This is the first time in 6 yrs of trucking that I've seen them annotate "Low Supply/Out" status on their website.

You also have to factor in state fuel tax differences which run from about 0.13/gal in OK to 0.33 in NY and the more populus states (except NJ which has surprisingly low rates).

[alan]

Flyboy wrote:

By the way, they'll not be keeping a lot of that money. Turns out that building or rebuilding refineries is expensive. Guess where those "windfall profits" are going to go.

------------------

Flyboy, would you please tell me when the last new refinery project was done in the U.S. I'm retired these days, but I spent a lot of years working in design engineering and construction, mostly in chemical process and petro-chemical plant design and construction, which included OIL REFINERY PROJECTS.

In the early 90's, while on an assignment at Badger in Cambridge, Mass., I worked on a REFINERY REVAMP for Koch Refining. It was a fairly extensive project, but it was an ADD-ON. There was another Koch project in the house, it was located at Corpus Christy. It was also a REVAMP.

In 1998, I was in the New O'leans area, at the Trans American refinery, right across a narrow road from Shell Norco. The project was a fairly extensive one, but it was NOT a new refinery, rather it was repair-revamp work. Over the years, I hit a few refinery projects, almost all of them being revamps of one kind or another. The last GRASS ROOTS refinery project I worked on was in the early 1950's, while employed at Lummus Co., in N.Y.C. The project was located at Mandan, North Dakota. Cannot off-hand recall who the client was, though Standard Oil tends to ring a bell.

Do you want to detail the "new" refineries you mentioned?

As for other aspects, assuming that the daily stock market reports heard diring the course of news broadcasts, oil companies appear to have been booking RECORD PROFITS. As for oil companies combining woith each other, R.H. Lee offered some interesting comment on that score, and re that, when A buys B, it often turns out that B's refinery or refineries get shut down, a situation that could contribute to the shortage of refinery capacity recently mentioned in news stories.

[owen]

I think you misread Flyboy.

Those record profits the oil companies are making now are going to be needed to replace the damaged/destroyed refineries on the Gulf Coast.

Second, because of the scarcity, caused by Katrina and the run on gasoline, they should be raking in the dough.

[Flyboy]

As owen said, I was referring to repair/rebuild of the refineries damaged by the storm. Yes, I know there have been no new refineries built since, what, the seventies? That's part of the reason we're in this mess in the first place, and it's why the price of crude oil is actually not the limiting factor in gasoline prices. I was just pointing out that those "record profits" are not likely to last beyond this quarter, because they're about to start hitting some serious expenses.

[R.H. Lee]

And on another note, how about ONE formulation for the entire country (with maybe 3 octane levels). I understand each area has to have different blends depending on the whims of the local 'Air Resource Board'. For example in CA we had to have MTBE in the gas, now it's in the groundwater and they can't figure out how to get rid of it.

More refineries making one formulation for the entire country. There's something the Republican majority could do that would actually be useful.

[riverdog]

How about two octane levels, 87 and 91. Get rid of that 89 stuff and make more of the other two. .

[jefnvk]

And on another note, how about ONE formulation for the entire country (with maybe 3 octane levels). I understand each area has to have different blends depending on the whims of the local 'Air Resource Board'. For example in CA we had to have MTBE in the gas, now it's in the groundwater and they can't figure out how to get rid of it.

Yeah, what was the number I heard? Something like 43 blends for the country? Pick one that is good for the majority of the people, maybe one or two more if there is a sizeable population that needs a different blend for a certain, specific reason and go with that. And yeah, 87 and 91 would probably work for the majority. Maybe 89 could be found in some certain places, kinda like racing fuel is only found at isolated gas stations. But when I drive into a gas station and see 85.8, 87, 89, 91, and 93 or 95, I just gotta shake my head. I'd bet 90% of people just put in what is cheapest.

[Coronach]

I predict the 'free marketers' will be either strangely silent, or join the chorus of condemnation then.No, as almost all of us have said, if there is evidence of price fixing, we will be in the condemnation crowd from the instant we see that. Nothing torques a free-marketer like tampering with the free market. However, I'll note that everything you have stated/cited thus far has dealt with oil companies, and we're talking about a price spike instituted by gasoline retailers. I'll repeat for the umpteenth time that they are not the same thing.

Does the price of oil influence the price of gas? Of course. However, when you're talking about a rapid fluctuation in the price of a product following a natural disaster, you're not seeing an effect of changes in raw material price. I suspect you'll continue to ignore that, so this is growing increasingly futile.

Again, if you want to make hay about "price gouging", cite some evidence of price fixing among gasoline retailers. The "free marketers" are waiting.

And Mussi...have you been talking to my wife? ;) Becaue that's what she always says. ;)

Mike

[R.H. Lee]

Coronach, now you're doing a 180. Earlier you said that price increases at the retail level were simply due to 'free market' forces and the desire to maintain supplies. Now you're acknowledging the possibility of 'gouging' and cya for future condemnation of same after a successful prosecution.

There will be prosecutions for 'gouging' at the retail level, and I think you know it. Do I currently have 'evidence'? No, those in the business of investigating and prosecuting these offenses will unconver that evidence, and it will take months.

[Waitone]

Hep me understand somethin'. What does windfall profit look like? Is it on the balance sheet, or income statement? Maybe it is something only a politician or tax collector would recognize. What would it look like if I were to see a free range windfall profit? Can you tell if one is lurking nearby based on market prices? I just need some distinguishing characteristics so I'll know one when I see it.

If it is ok to gig a business owner for windfall profits, is it ok to subsidize the owner for . . . <flip, flip, flip; ah, there it is: the antonym for "windfall"> . . .ill-fortune losses?

[R.H. Lee]

A windfall profit exists, it's real and it's taxed. As we're using it here, it's a colloquialism for an unexpected event that allows the profiteer to exploit the market and raise prices in order to make a higher than usual gain on the same amount of product sold. The profiteer is able to do this because he has a) exclusive control of the supply; and b) a captive group who cannot do without his product and will pay (almost) whatever it costs to obtain it. Windfall profits would appear on the income statement during the current year and close into owner's equity at year end. They would probably appear as a seperate line item in revenue so as not to skew operating cost percentages for that period.

Almost forgot...'ill fortune losses'.... yes, they're deductable as 'casualty and theft losses'. Their deduction may be limited in the current year, but the balances can be carried forward and written off in subsequent years.

[gm]

so then they must be some sort of cartel? :D



Im glad these folks arent in the bottled drinking water biz. :neener:

[Coronach]

Coronach, now you're doing a 180. Earlier you said that price increases at the retail level were simply due to 'free market' forces and the desire to maintain supplies. Now you're acknowledging the possibility of 'gouging' and cya for future condemnation of same after a successful prosecution. :scrutiny: How do you get that from what I just wrote?

I mean, ok, yes, I did write that the retail increases are from market forces acting "to protect supply", if by that you mean they are driving the price up as demand increases and supply remains fixed. Beyond that...wha? Are you even reading what I write, or do you just not understand it, period?

Someone else, advise: am I just completely missing a valid point, or is he talking no sense whatsoever now?

As to the rest, I have, from the onset, acknowledged and stated that if there is a valid case for price fixing, I would most sternly condemn the price fixers. Do you even understand the difference in concept between price fixing (a valid economic term) and "price gouging" (which is just a term for someone charging a lot for a product).

There will be prosecutions for 'gouging' at the retail level, and I think you know it.Uh, ok. Do I currently have 'evidence'? No, those in the business of investigating and prosecuting these offenses will unconver that evidence, and it will take months. Get back to me when it happens.

Mike

[dustind]

A windfall profit existsThen you should invest in them.

Coronach has not changed his position or said anything different than before.

I think we should have 86 octane, 91 octane, and something higher like 96 octane. Gas would really get expensive after 96 octane IIRC from an aviation article about unleaded gas.

I think that if we started teaching economics in high school again I think it would be a pretty significant blow to the Democratic party as well as many politicians that play on people's ignorance.

[JohnBT]

A Shell station here is down to $2.89. Others are under $3.

The marketplace marches on.

John

[wingman]

[QUOTE]I think that if we started teaching economics in high school again I think it would be a pretty significant blow to the Democratic party as well as many politicians that play on people's ignorance.Quote:

Yeah, that would work. :rolleyes:

[sumpnz]

A Shell station here is down to $2.89. Others are under $3. Gas here is still climbing - about $3.15 seems average right now, up a few cents each day.

[JohnBT]

My neighborhood 7-11 is still at last week's price - $3.31. They aren't doing much business. :)

John

[R.H. Lee]

Yeah, but they're conserving their supply, which is what it's about.

[JohnBT]

But there hasn't been the first supply problem in central VA. They're just slow - they were at $2.91 last Thursday night and by 6:30 the next morning they were up to $3.31.

John

[jefnvk]

My neighborhood 7-11 is still at last week's price - $3.31. They aren't doing much business.
Yeah, but they're conserving their supply, which is what it's about.

Yeah, and free market is working. They are higher than everyone else, so no one buys from them.

Its back to everyone trying to drop their price a penny lower than everyone else here. Now I am hearing complaining that Wal-Mart is trying to undersell the local owners again :rolleyes:

[JohnBT]

On my walk home from work I noticed the local 7-11 has dropped the price from $3.31 to $3.09. The marketplace marches on.

John

[pax]

It's been pretty steady at $3.09 here.

I take comfort that it's still a little cheaper than milk. Though not by much.

pax

[ctdonath]

Here near Atlanta, where gas simply ran out when the prices started racing up, gas is back down as low as $2.79/gal.