While we COULD find an alternative fuel for our method of transport , there isn't enough 'pain' that $4 gas would cause the average person to write their congresspersons to complain and demand some sort of action. (Just like most of the problems in the USA - until 50% of the voting population doesnt like something it wont change...)

Certainly, we see some companies (like Toyota) moving towards selling products to take advantage of this situation but it is a drop in the bucket at the moment.

The main problem I have with Gas Prices - like all forms of deregulated energy (wouldn't you call it that?) - is that there really are not any options for the consumer. There really is not a competitive market for gas despite using all of the market jargon (supply and demand in a cartel?).

The refineries dictate the price and we pay it. How else could it be that oil companies/refineries make record profits ?

So, until we gather the political will and realize that energy resources are something that a) needs to be conserved and b) developed for the common good (vs pure profit motive) you should probably buy stock in oil companies to offset the rise in prices(!).

As energy prices start rising across the board you will see more push towards alternatives: solar, biofuels, etc. but not until there are a lot of peole living in agony because of it.

Greenbeard

What are the profit margins of oil companies compared to the profit margins of computer companies? to Walmart? to then national average?

Tonguetied

Tonguetied

World oil prices jumped briefly on Wednesday after a television station in Tulsa, Oklahoma -- the No. 62 U.S. media market -- posted an erroneous story about a refinery fire on its Web site.

Carey

brew400

zolielo

As for your National Health Care? That will succeed when people stop flocking over here to self pay for operations that they cannot wait 2 years for. Our health care is expensive, but that is because we have more of it available.

ed-man

@virgilstar: I agree with you 100%.

synergy

maxepad

People and institutions playing the future's market, which drives the price of crude, also have no motive beyond profit. They don't really care what they're trading.

Of all the commodities that reach the consumer, the price of oil is the least influenced by supply and CONSUMER demand.

I spent the last two years working in oil-producing countries in the Middle East, where oil and gas for the local market bypasses the future's market. The retail price is not subsidized (though it is tax-free) and is sold at a profit. And yet, in two years, the price has stayed steady at around 90 cents per gallon.

llanim

I find your simple mindedness astonishing. Is riding a bike really the only way you can think of to conserve energy? Since you seem to suffer from a lack of imagination, here are some other options.

-Use public transportation
-Carpool
-Live closer to work
-Work closer to home
-Buy a more fuel efficient car
-Turn off and unplug appliances when not in use
-Use energy star rated appliances
-Switch to CFL's
-Install better insulation in your home

Granted, not every all of those are options for most people. However just about anyone should be able to do at least one of those, and everything on that list will save you money while simultaneously helping to lower the price of gasoline and other sources of energy.

This mindset that there's nothing any of us can do and that we're all at the mercy of 'Big Oil' earns no sympathy from me.

mnikkel55

terry-j

The intro to a rant on my blog:

Our diligent lawmakers in the House passed a bill that would make gasoline price gouging a federal crime. I guess gouging the public with pork projects, bridges to nowhere, and subsidies to increase our daily costs is not high on their list of atrocities against U.S. constituents, but intervening in free market forces in an attempt to artificially cap commodity prices is deemed as a worthy cause. I have a problem with this nonsense. I can think of very few times where the country actually benefited from having the price of any particular good or service regulated by law, as opposed to free market capitalism...

dpritch15

Don't tell me to look into alternatives that are NOT THERE thanks to big oil/car companies/bought and paid for government.

Don't worry, the oil will be GONE in ten years or so anyway.

doctor_cos

My husband and I live in the UK. Where can we sign up for this 6+ weeks of vacation and 35 hour work week? My husband gets 4 weeks vacation and regularly works 45+ hours a week.

Also @Buran

Haven't we had this chat before?? Most Europeans DO NOT pay for there health care with petrol taxes. If that we're true, we wouldn't all be paying up to 40% of our income in taxes + a special tax for health care/national insurance.

Here in the UK, 70% of the price of petrol is tax. This tax goes to schools, roads, guilt and a government who is quite used to and comfortable with it's petrol revenue.

Enjoy your cheap gas while you can. It won't last forever.

When I was in high school in VA, gas was 99 cents a gallon (1995). You won't see that again.

radleyas

I was living in California when Enron pulled this same stunt with electricity. They asked/told plants to go offline for 'maintenance,' causing rampant blackouts.

Now we're getting the same tactics with fuel. That's why our gas is so expensive right now.

sully127

Bigger and faster is NOT better. "Zero to 60" scores are NOT relevant unless you're driving a racecar - the average speed limit during my commute to work is 40 m.p.h.

There's little or no reason for any average commuter to own a vehicle that's powered by a 6 or 8-cylinder engine. Yet you sure do see a disproportionate number of idiots driving quad-cab Ford Lariats, Chevy Tahoes, & other monstrously oversized vehicles for doing nothing more than commuting to work or the grocery store - alone.

But the prevailing attitude here in Texas - and I suspect most other areas of this country - is something like, "By God, if you ain't got yerself a big dick truck, well heck, ya just ain't much of a man, now are ya?" Tell people that your daily driver is equipped with a 4-cylinder engine and they'll cast a shameful look at you as though you drove to work on a lawnmower.

It's high time that automakers & advertisers take responsibility for the public's mindset and get budy with altering the misconceptions that they've fostered for the sake of profits.

Rob O.

asherchang

asherchang

Anyways, what's funny about this whole thing is that as much as we will complain about gas prices, we'll never change our driving habits, and our food will always be shipped from far far away, and we'll always shell out money for that little smidgeon of comfort.

asherchang

Either way NY is the worst state when it comes to taxes and yet the tax payers keep electing the idiots in charge. Change begins at home and with our decision to vote or not to vote. So vote the idiot out and put the new idiot in.

Politicians do crack me up when they hold hearings and discussions, do they actually think that oil execs are going to admit they are gouging the american people, I think not.

Don't forget politicians just give themselves a raise and they use gov't vehicles or lobbyst funds to pay for their gas.

MikeTheKat

Rusted

The thing that really pisses me off is that no one makes a big deal about the profits of the oil companies... They keep jacking up the price of gas while their profits are through the roof... billions of dollars for ONE QUARTER! BASTARDS. That right there should be taken seriously and looked into and get the "problem" fixed.

quiksilver180

@adamondi: Yes the lack on additional refineries is definitely a factor that the article did not touch upon enough. Also several states require special bends of gasoline further bounding the situation. Barriers to entry from competition, government regulation, and the local "not in my backyard" populous surely come into play.

@Carey Greenberg-Berger: It is getting to the point that there are increasing vertical and horizontal unity (not by definition monopoly) of a firm which coupled with near oligopoly coordination between firms leads to non-market conditions in the oil industry. What can be done to counter that is not transparent, at least to me.

@virgilstar: Housing relative to commute is often too complex a system because of personal limitations and bounds to be simplified in the manner which you have put forth. Sure living within one's means is the proper way to live, but that is non sequitur to your statements. Also the externalities of national defense should not be overlooked simply because it is not the original primary use. The interstate highway system (personal travel, …), internet (personal communication, …), extraterrestrial endeavors (global communication, maps, …), etcetera .

For a Lifehacker style tip: Similar to how a Starbucks is an indicator of the gentrification of a neighborhood the addition of a Costco gasoline station is an indicator that the local gasoline stations are competitively over priced. Note: that Costco gasoline is relatively additive free.

zolielo

our governement is messed up. Everyone carpool, I know it sucks, but buy a PSP with the money you save not driving.

Android8675

If people are willing to buy gas for $15 dollars a gallon, then people will sell it for $15. If you think the price is unfair, then DON'T BUY THE GASOLINE. Nobody is forcing you to fill your Expedition to the brim with gasoline. Some of these people think that free markets should not be allowed to work, and that the government should run the business instead of a private individual. People have tried that (Stalin, Mao, Kim Jung Il, Pinochet), look at the results. Russia is still recovering after almost 20 years of recovery from the socialists; China is moving towards freedom; Four million people have died in North Korea and Milton Friedman and other U of C economists saved Chile from a certain fate.

If you think the price of gasoline is unfair, don't have mommy government step in, just DON'T BUY THE GASOLINE. If there is price gouging, people will stop buying the product, and the business will have to lower prices to simply stay afloat. I feel foolish saying it again but some people don't get it: DON'T BUY THE GASOLINE.

beansac

shoegazer

Why not move so you don't live 30 miles from work? This kind of attitude is just failing to see the real root of the problem. The only reason Europe (and the rest of the planet apart from oil-rich nations) can survive on gas that is double the price we pay in the US, is because long ago they made planning decisions NOT based around the car. The interstate highway system was designed to move (troops) around the country and BETWEEN states. It was never meant to be an engine for suburban development so people can live out in the country and drive to work.

My biggest issue with this gas thing is the constant whining based on bogus economics. Last year gas was $2.70/gal. If your car/SUV gets a measly 15mpg and you have a 30-mile commute in each direction, then gas going up to $3.50/gal is gonna cost you a whopping $16 a week extra - that's a crazy ass-busting $3.20 a day! Oh my God, the skies are falling in! If you can afford a drive a 15mpg car (likely an SUV costing $25k plus), and live 30 miles out of town in the countryside, then you should suck up the $3.20 a day for your stupid lifestyle choices! The above represents an extreme scenario (most cars get better gas mileage than 15mpg highway). If you're working at McDonalds you shouldn't be able to afford the car/house/lifestyle that got you inot this mess in the first place. You get no sympathy from me if the above numbers apply.

Sorry ot come across as self-righteous, but as someone who has deliberately made choices to protect against this type of scenario (living never more than 2 miles from work, cycling or walking there and driving only on weekends), it just ticks me off when people want the government to bail them out for their own irresponsible decisions.

virgilstar

There is no such thing as "charging the price the market will bear." Firms in the market determine what OUTPUT (quantity, not price) will maximize their profits, GIVEN the shape of the demand curve they face. If their costs rise, they will have to restrict output. If demand rises, they can profitably produce more.

NoneMoreBlack

rouftop

Panama - Panama City $2.19
Russia - Moscow $2.10
Puerto Rico - San Juan $1.74
Saudi Arabia - Riyadh $0.91
Kuwait - Kuwait City $0.78
Egypt - Cairo $0.65
Nigeria - Lagos $0.38
Venezuela - Caracas $0.12

and

U.K. $7.25
Argentina - 6.60
Japan - 6.60
Holland - 6.40
Germany - 5.60

???

obviously it's got to be taxes, i.e., community add-ons. also, i seem to recall reading how the US govt subsidizes the gas companies to such an extent that they made collossal, record revenues and income figures in the past couple years. how do we get that stuff removed from the equation?

kewpiedoll99

ExGC

Ink Jet Crtridges - Now that is price gouging. Gasoline - That more of an extra tug on the wallet.

cgarison

iMike

hokiexterra

Fortunately, the lawmakers aren't smart enough to make the taxes a % of base gas price. Typically here in the US, it's a fixed # of cents/gallon. For instance, NC's tax load on a gallon of gas is in the neighborhood of 30 cents, regardless of the gas price. In other words, at $1/gallon, the taxes are 30%. At $3/gallon, the taxes are 10%. (roughly) And NC has the highest tax loading in the Southeast (and almost the most state-maintained paved roads in the nation).

hokiexterra

There are precious few refineries, and so gasoline is scarce. The gas companies charge what the market will bear.

The FA says:

price gouging occurs when dealers keep prices artificially high in order to gain a little extra profit or recoup costs, even though the DTW price has declined.

But isn't that the same thing as saying that the dealer thinks that the market will continue to bear higher prices, so he keeps them that way until the market stops bearing the high price?

I'm no apologist for big oil, but when I hear talk of legislation to "fix the gasoline price gouging problem," I get the gibblies.

Hawkins

A voluntary and permanent moratorium on media agencies offering speculation that fuel prices may rise might be pretty helpful.

Troy F.

Danilo Campos

Again, plastics prices are determined by what they can sell it at, and consumers will not tolerate a 200% spike in tupperware. So, the companies' margins on those products have gotten killed.

GE just sold their giant plastics division because oil prices have essentially made it unprofitable.

Oh, and who did they sell it to? A Saudi company that really doesn't have to worry as much about the rising oil prices.

tizzed

ChiefDanGeorge

In the early 80's, there were over 350 refineries, mostly owned by the oil companies. The oil companies didn't see refining as a place to generate profit, but as an integral part of a larger operation.

By 2002, there were only 153 refineries, and most of them were no longer controlled by the oil companies.

This is the only part of the article that you really need in order to know why the cost of gasoline rises steadily every year. If you have a diminishing supply, and a growing demand, the prices will go up. That is all there is to it. Since it is essentially impossible to build a new refinery in the United States due to environmental regulations, there is little hope of an increased supply in the future. The only thing we can hope for is less consumption in order to lower demand. However, given the fact that most people I know drive trucks or large V6 or V8 cars all the time, even with no passengers, that is not likely to happen.

So, either we must loosen or repeal environmental protections in order to build more refineries (bad idea), or we must reduce our consumption (really good idea). How many people do you know who drive SUVs or big honking cars all the time, but could switch them out for motorcycles or little cars easily? I would say that 90% of the people at my office building could drive much smaller cars, save tons of gas, and be better off for it. But they drive trucks, SUVs, and huge sedans instead.

adamondi

Here (as in most states) all tax revenue goes into general revenue and not some special "lockbox" for road repairs. Usage and license fees are supposed to pay for repair and expansion...

See how much you state is rakin' in:

http://www.gaspricewatch.com/usgastaxes.asp

stephen5

backspinner

It's all about process and capacity. What it takes to convert crude into plastic is much less than what it takes to convert crude into gas. I could probably dig up the specific process. Combine that with no new refineries in the US in 20 or so years and there's simply not enough throughput.

Also there's a very healthy and active recycling community with plastics which I'm guessing (no actual facts mind you) probably offsets some of the cost of acquiring raw materials. Unfortunately, we can't recycle gas yet ;)

lusis

@Toof_75_75:

Lets look at prices from Developed countries;

U.K. $7.25
Argentina - 6.60
Japan - 6.60
Holland - 6.40
Germany - 5.60

banned

I'm glad I didn't have to be the one to bring up profit margins vs. profits.

lusis

Gasoline is not the only thing crude oil is made into. Petroleum is made into tons of other things like plastic. How come we don't see Tupperware prices surge at the same time as gas prices? If the futures market is controlling the price of oil, it should get more expensive across the whole board for everyone who uses it, not just gas refineries.

DeeJayQueue

I never said it would be easy. God knows I hate now working for a company in-town instead of 7 miles from my house when it comes to filling up the tank.

But I love the company and the pay raise offset the new cost of fuel. Additionally I get the option to work from home twice a week.

One thing that I have at my disposal that others might not is:

http://www.georgiagasprices.com/

My dad is a truck driver and the fuel prices have hit him especially hard. But he has a laptop and Verizon wireless highspeed so he can actually plan his refueling much better. One website he uses will tell him the gas prices for the next 20 miles so that he can better plan his stops.

lusis

something_amazing

And the resone why oil companies make so much money is because we consume so much oil. Their profit margins range from 6-9% - often less than sales tax!

orig_club_soda

I also think we need to allow more refineries to be built and allow drilling off the coast of California and Florida. This NIMBY attitude they have has got to go.

I'm also against drilling in ANWAR though. This probably comes from having a wife who works for EPD and explained to me what the REAL plan for ANWAR is.

lusis

But we don't get paid at ALL if we don't go to work ...

Buran

But oh no it's easier to bash than research.

Buran

Why is it price gouging? In a free market, there is no price gouging per se. There is only the price that someone is willing to pay. If someone isn't willing to pay the price then the price will drop.

I don't understand why you're trying to absolve the consumer of his responsibility in the free market system. Less than two miles from my house there is a gas station that sells gas for 3.15 a gallon. If I drive five more miles down the road, there is a cluster of gas stations that sells for 6 or 7 cents less.

As to "event pricing", as someone else mentioned, it's all about supply and demand. A gas station with no gas is useless. There's no one to come in and buy the real money makers like Coke or candy bars. In order to mitigate that high demand, the prices rise.

People also seem to forget that the cost to acquire replacement fuel must be taken into account. It doesn't matter if you have the lowest prices in town, if you can't refill the tanks when that current supply is gone, you're out of business again.

Make no mistake, "price gouging" laws are nothing more than a politician's attempt at making you feel like he's actually DOING something.

lusis

zibby

Panama - Panama City $2.19
Russia - Moscow $2.10
Puerto Rico - San Juan $1.74
Saudi Arabia - Riyadh $0.91
Kuwait - Kuwait City $0.78
Egypt - Cairo $0.65
Nigeria - Lagos $0.38
Venezuela - Caracas $0.12

Toof_75_75

minneapolisite

Curiosity

mikyrok

minneapolisite

banned

The sellers can increase the price right before a large event because the demand of their product will be much higher than normal. It's not price gouging; they have a product, a demand, and persons X are willing to pay the price for the product.

The slowly dropping of the price after-wards is more to be frowned upon IMO.

zephyr_words

Moosehawk

Moosehawk

...Or can I...

bluemeep

MrGuts

banned

I don't see how it's not price gauging, and it'd take one hell of an argument to convince me otherwise.

enm4r

Greeper

B

A gallon of milk is cheaper than gasoline though...maybe we should try using milk as a fuel...

I gotta go, patent office awaits.

crayonshinobi

Git Em SteveDave is a poor substitute for LindsayJoy

read the article on why coke is so expensive, the soft drink not the drug, that should clarify it better. http://consumerist.com/consumer/food/the-history-of-the-pr...

vr4z06gt

vr4z06gt

justin.ryan

zibby

Isn't that gouging?

tigerjade