Lowering Gas Prices through Supply and Demand

[tongodeon]

Gas is expensive. Boycotting certain specific gas companies, boycotting on certain days, buying a few gallons of gas at a time, and petitioning President Bush will not bring down gas prices.

Only three things control open market gas prices: supply, demand, and taxes. Our gas taxes are already very low: Federal taxes are 18 cents per gallon, and

Comments

[madbodger]

Darn shame that. I love cane and beet sugar, and if it gets used as fuel, it's gonna get
more expensive, and more products will switch to the greaded HFCS.

As for your overall point, well yeah, you're right.

[mkb_cbr]

Thank you. I am so sick and tired of hearing people's moronic rantings about gas prices.

[swingland]

bless your sweet soul.

nothing more concisely intelligent could have been said to sum up the problem and the solution.

Just to be contrarian

[sploof]

I'm not an expert, but, as I understand it, there isn't exactly a free market in gasoline. There's a small cartel of raw material suppliers, a small group of refiners/wholesalers, a retail market dominated by franchises, and a heavily manipulated demand curve

Re: Just to be contrarian

[tongodeon]

there isn't exactly a free market in gasoline. There's a small cartel of raw material suppliers, a small group of refiners/wholesalers, a retail market dominated by franchises, and a heavily manipulated demand curve.

That was certainly true during the OPEC heyday - producers would cut back excess capacity to drive up prices and maintain their profits through high and low consumption seasons. That behavior seems much less prevalent these days: every country that can produce oil is producing oil at full capacity. When a refinery or pipeline in Iraq gets bombed the Saudis don't increase capacity to make up for the loss because they can't - everyone is already running at redline. Sure, oil companies seem quick to raise prices and slow to let them fall, but

Gasoline usage inflicts all kinds of costs on third parties that aren't accounted for in the price, which means gasoline users get a free ride at everyone else's expense.Certainly. That's what I meant when I said that we should stop paying direct and indirect subsidies to energy

Re: Just to be contrarian

[sploof]

That was certainly true during the OPEC heyday

I'm not really arguing about the raw materials suppliers. I'm talking more about the wholesalers.

Sure, oil companies seem quick to raise prices and slow to let them fall

It's not about speed, it's about distribution of costs. If there were competition between wholesalers, the rise in the price of gasoline would be less than the rise in the cost of the raw materials to make the gasoline--wholesalers would bear some of the burden of the cost of the raw materials, in other words, and their profits would drop. If, on the other hand, there's some collusion between wholesalers, they can use the increase in raw materials cost as an excuse to raise prices even higher than that, thus giving themselves a windfall.

In short, rising oil prices should be hitting gasoline wholesalers where it hurts. The fact that it's not seriously suggests that they're colluding.

. I'm hesitant to let any one regulatory body decide: I'd rather the market become open and free enough so that it can settle the

Re: Just to be contrarian

[tongodeon]

If there were competition between wholesalers, the rise in the price of gasoline would be less than the rise in the cost of the raw materials to make the gasoline--wholesalers would bear some of the burden of the cost of the raw materials, in other words, and their profits would drop.

In the past year the price of crude oil has increased 52.7%.

In the last year the price of gas has risen 40%.

It seems that gas companies *are* spending more money on raw materials than they are recouping on gas at the pump, compared to last year.

[catbear]

Next perhaps you will realize that 90% of the food you eat has been trucked hundreds if not thousands of miles, or perhaps even sent across the equator, which, considering the rising cost of fuel, is why the cost of produce has jumped so much lately. Now that you've realized you need to buy less gas, maybe you can also take the step of buying locally produced food -- or at least trying to. And you'll find its really fucking hard to do. Vegetable gardens are wonderful, though. Even 100 square feet of space can produce amazing amounts of food that can be canned and preserved for use during the year

[tongodeon]

Yeah, an increased gas price will inspire a lot of "efficiency corrections". I should have said a bit more about indirectly using less gas.