Skip to comments.$3 gas fuels a fevered debate - Some see big rip-off, others a balance of supply and demand.
Posted on 09/09/2005 10:38:44 AM PDT by SmithL
They're ripping us off.
No, they're doing us a favor.
Gasoline at $3 a gallon has motorists and elected officials spewing allegations about oil companies' price gouging and profiteering. But even as California's attorney general begins an investigation into the record-breaking run-up at the pump, some economists say the high prices are a necessary and even beneficial response to the legitimate supply shortages that have followed Hurricane Katrina.
High prices serve as the most efficient way to allocate a scarce resource, said economist Severin Borenstein, director of the University of California Energy Institute.
Keeping prices low through some sort of government regulation would exacerbate the shortage and create gas lines like those in the 1970s, which helped plunge the nation into recession, he said.
"Suppressing prices when there's a real shortage is an ostrich policy to a real problem ... a head-in-the-sand policy response," he said. Letting prices rise "sends exactly the right signal: There's a real shortage, don't use so much gasoline."
That doesn't wash with California Attorney General Bill Lockyer, who has begun a probe into price increases of 25 cents per gallon or more since Katrina ripped through the Gulf Coast's vast energy infrastructure.
"I haven't seen any textbook on U.S. economics that says it's OK to violate the law, gouge consumers, collude, fix prices or to engage in unfair business practices," said Lockyer spokesman Tom Dresslar.
Dresslar said the state's anti-gouging law prohibits retailers from raising prices more than 10 percent when either the governor or the president has declared a state of emergency. Gas prices on average have risen
(Excerpt) Read more at sacbee.com ...
I am sick of people talking about it. Drive for emergencies only then. Stay home and make whoppee with the wife. That is much more fun.
I am sick of hearing people talk about gas. Drive for emergencies only. Stay home and make whoopee with the wife. Much more fun.
countdown to the free republic situational socialist brigade showing up...
And you can't trust Lockyer if his mouth is moving.
Funny how everytime the California politicians put on a dog and pony show about this, the report always comes back to say the same thing.
The lack of refineries is the cause of high gas prices in CA.
What's Congress doing about it? In the local paper dated August 23, there was a report entitled CONGRESS LOOKING AT GAS PRICES by Gannett News Service reporter Doug Abrahms. See below for the full article:
WASHINGTON--With gasoline prices setting new records, members of Congress are feeling the heat from constituents and are taking action--by scheduling a hearing.
The Senate Energy and Natural Resources Committee on Sept. 8 will look at factors pushing oil prices higher, including sky-high crude prices, limited U.S. refining capacity and increasing gasoline demand.
"While there is no immediate solution to lower the price of gasoline, this hearing is a start," Sen. Pete Domenici, R-N.M., who heads the committee, said in a statement. "Today's gasoline prices are taking a severe toll on Americans pocketbooks. Consumers are anxious."
So are lawmakers, who are back in their home districts on summer recess and are hearing from voters about high fuel prices. Regular gas rose to $2.61 a gallon nationwide on Monday, a record high, according to auto club AAA.
But the reality is that the oil and gasoline markets are global, and Congress can do little to affect prices, especially in the short term. The energy bill passed by Congress last month has done nothing so far to lower prices.
What happened last week is what always happens when a crisis hits anywhere in the world -- the oil companies panic, and raise their prices, and when the crisis doesn't appear to be as dire as first expected, the prices start to drop. What all of this means is that the price increase last week had absolutely nothing to do with supply and demand (well, maybe a bit with demand, because it was Labor Day weekend).
Yes, having several refineries in the gulf had nothing to do with the supply of gasoline.
As someone else appropriately put it: Would you like $3.00 per gallon gasoline which is available, or $2.00 per gallon gasoline which is gone?
You can't legislate the laws of economics away!
Gas prices are going down (slightly) here after taking a big jump. I expect a gradual decline for some time.
And not coincidentally, 100% of the latter group understand economics while none of the former do.
Gas in Oklahoma is $2.73.........and falling
Gas in Oklahoma is $2.73.........and falling
Completely irrelevant. If gas stayed at $2.49 (or whatever) in CA but went to $3.19 in, say, Texas -- then it would pay for oil suppliers in CA to truck their gas to Texas to sell it, creating a shortage in CA, and forcing the price right up to where it is.
Gasoline producers do not "truck" their gasoline half way across the country. That's what pipelines are for. Calif. gasoline is typically piped to Reno and Las Vegas, NV, and to Phoenix, AZ.
Not in the California market.
Some see big rip-off, Some are ignorant of economics, others see a balance of supply and demand.
There, I fixed that.
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