Posted on 04/18/2006 8:09:46 AM PDT by ex-Texan
WASHINGTON (Reuters) - President George W. Bush said on Tuesday he is "concerned" about high gasoline prices, and pledged that the U.S. government will keep a close watch out for profiteering.
"I'm concerned about higher gasoline prices," Bush said at a Rose Garden news conference to name new staff appointments.
"The government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging, and we will do just that," Bush said in unprompted remarks about energy prices.
U.S. crude oil futures hit a record of $70.88 a barrel on Tuesday on fears of supply disruptions in Iran stemming from its nuclear standoff with the West, as well as lingering outages in Nigeria.
U.S. retail gasoline prices rose 10 cents last week to average $2.78 a gallon, up 29 cents over the last three weeks and 55 cents higher than a year ago, the government said on Monday.
Bush said high crude oil prices, rising summer driving demand and a switch to new motor gasoline standards is keeping gasoline prices high.
"It's tight supply worldwide and we've got increasing demand from countries like India and China, which means that any disruption of supply ... (is) going to cause the price of crude to go up," Bush said.
More drivers will take to the road this summer, which will also boost demand, he said.
"At this time of year people are beginning to drive more, getting out on the highways, taking a little time off," Bush said. "That increasing demand is also part of the reason the price of gasoline is going up."
Thank you.
Hopefully, someone will pick up on it.
it hasn't happened, you can post all you like making that claim - but demand/consumption of gas has been fairly steady - whether the price is $1.90 or $3.
the supply isn't being "protected" - its simply being consumed at a higher price. come up with some other theory as to what is going on. let's recap:
price is higher
demand/consumption is the same
no shortages, no gas lines - so that must mean supply is available to meet demand. you can buy as much gasoline as you want at $3
so what is the reason for the higher price, in terms of what is the typical supply/demand/price relationship?
yes, you can make some arguments that the supply is being met only because the higher price allows "spot market" activity plays to enter the market to fill demand. but that's only a marginal factor in my opinion.
ending the ethanol blended fuel requirements would provide some price relief. that's why I would implore the President - DO SOMETHING - delay the ethanol blend requirements for one year.
They will do that. But gas isn't the only market this impacts. Oil also powewrs our industries.
It will also drive the costs of munufacturing up. It will effect the costs of transporting our goods up, etc. etc. Inflation is right around the corner now. Buying power will go down, and what does that do? It lowers demand on consumer products. We could find ourselves in a recession, especially with rising intrest rates on top of it all. Things could get bad.
Yikes! I'm glad I wasn't speculating on your commitment to freedom! I thought you "got it".
I'm sure you wouldn't like it if banks decided to raise interest rates to 50% because they can.
I wouldn't mind, it's their money. They can let it sit idle if they choose. No one will borrow money at 50% so they will get zero return. Quick way to go broke in the banking business.
Usury laws are antithetical to freedom. They are an abomination.
You expect reasonable speculation in any market, be it oil or wheat.
All speculation absent force or fraud is reasonable.
But when it becomes unreasonable, how do you correct it?
Name some "unreasonable" speculations.
I can't stop buying gas to drive to work,
Time to move? Time to car pool? Time to take a different form of transportation? Time to cut out that golf game? Time to buy hamburger instead of ground sirloin? Time to change priorities?
Time to consider what might happen to how people move about if oil is no longer an affordable option?
to actually protect supply, demand/consumption has to fall. gas will have to go to $4 before that happens, its not happening now.
(Don't think I don't agree with your ideas in principle, but the devil is in the details)
What should they do?
70 + $$$ a barrel. And I myself can afford gas at $10 a gallon if need be. And still eat prime rib. No need to move, or take (Gasp!) public transportation.
I don't think you get it.
The gas station ITSELF has to pay a certain PRICE for its gas supply. It'll put some mark-up to reflect its market area.
So, their price is already set, essentially. And it then goes to us.
If the price is suddenly down-graded artificially by *force* - rather than by the overhead market - AKA "price control", then you WILL see long lines because the GAS STATIONS NO LONGER HAVE ENOUGH MONEY TO PAY TO GET MORE GASOLINE THEMSELVES, because they are forced to LOSE money on every sale!
I don't want hydrocarbon prices regulated. But then, I'm not in a position to make that decision unilaterally, and neither are you. If hydrocarbon producers engage in a "squeeze and ease" price manipulation over a sufficient length of time, with no evident shortage of actual supply, folks who don't share our views may (and probably will) decide that price regulation is warranted.
The industry itself can fend that off, or invite it.
Also, your question suggests that regulatory agencies with price control powers have been nonexistent in the past. To the contrary, they have existed, and they can be resurrected in a heartbeat, whether we agree with their mandates or not (think FERC).
Also, you didn't answer my question concerning the alternative product that will be used by individuals and industry in the short term if "they don't like the price."
And believe me, driving a V8 vehicle to work these days (the alternative, a 4 cylinder commuter car, is unthinkable) is like paying 10$ a gallon... It cost $220 to fill up this morning.
Like me they will do more walking.........
So your opinion is that $70 is a bad speculation? Or that no should be allowed to pay $70 for oil? What part is unreasonable?
If I offered you $80 for future delivery of a barrel of oil right now, should I be prohibited at government gunpoint from making the offer? Or would you consider selling it to me?
And I myself can afford gas at $10 a gallon if need be. And still eat prime rib. No need to move, or take (Gasp!) public transportation.
I see, so it's the little people you fret for?
"I see, so it's the little people you fret for?"
Of course. They'll want a raise.
I am not arguing for price controls. And the micro-economic issue surrounding the service station's finances doesn't interest me.
I am simply telling you that at the macro level, your claim that the higher price is curtailing demand, isn't true. and since there are no shortages, there must be supply. so the typical supply/demand/price relationship isn't there.
there are reasons for this - the inelastic nature of demand for gasoline, and the fact that so many americans buy gasoline on credit card, and therefore don't actually "see" the full impact of price increases, and as such, their consumption behavior is not altered. the increased costs of gasoline, are simply being rolled into the debt burden americans carry on their credit cards.
imagine if tomorrow, buying gasoline on credit was outlawed - cash or debit only. what do you think would happen to demand in that case?
You seem to be fairly ignorant of the boom-and-bust history of the petrolem market.
I lived in Houston during the oil bust of the early 'eighties, and was able to buy a really nice house for pennies on the dollar.
It takes years to bring new oil production online, and by the time it comes online it takes years to slow it down.
It's just a matter of time before the market is glutted, just as has happened innumerable times in the past.
But you economically near-sighted types can barely see past your nose, so I know I'm wasting my breath.
Maybe because it's not the President's job to micromanage the economy?
Ever heard of the law of unintended consequences. I guarantee that the actions you are whining about will have lot of those, and you won't like 'em one bit, but at least you'll have plenty more to whine about.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.