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."
OK, after today I might have to stop defending gas stations...local station up 20 cents since yesterday morning to $3.19/gal.. Remind me again why gas already in the underground tank at the gas station should go up 20 cents. (The station in question did not get a delivery in this time period).
Why the heck must demand fall? Are you some sort of closet environazi?
Demand simply spurs business to INCREASE SUPPLY.
Or did that economic lesson pass you by?
Geez...
Just wondering... does anyone know what gas is selling for in Peking, adjusted to US currency?
- John
Pardon the heat of my last post.
I've seen far to many on this thread speak about demand...
...but constantly ignore that demand is an indicator signaling that supply must be increased.
Just imagine if the same arguments were made regarding food.
"We're not growing enough food, so you just have to eat less!" <-- Heaven forbid we decide to grow more food!
Adam Smith is Senator Schumer???
Okaaaaay... Sure thing, fruitloop.
No, you are.
Gas prices are up, must be a monopoly. LOL!
my comment about demand is simply aimed at folks here who say the price increase is part of the normal market forces of supply/demand/price.
OK, where is it? price is up, supply is at record levels, there are no shortages, and I doubt we will see much in the way of demand reductions for some reasons I mentioned earlier.
let's just acknowledge that the price increase has nothing to do with either supply or demand. the oil companies, the arbitrage traders, they know they can get a higher price - so they are. the free market dynamics on this are out the window. the oil industry is made up of foreign cartels, highly consolidated industries in the US, wall streets arbitrage specialists, etc. until their grip is busted, we are all just along for the ride.
Yeah, and we have too many here on the Free Republic that call themselves 'capitalist' but oppose everything Adam Smith ever stood for.
I don't know what they are, but they are definitely NOT capitalists.
You couldn't possibly be more wrong.
Price controls mean there will be no gas at any price. You must not remember the gas panics of the late 70's, which were a direct result of price controls imposed by idiotic politicians, who can no more control prices than they control the phases of the moon. Do you have any idea how much valuable time was wasted in the 70's by people waiting in line for price-controlled gas?
High prices promote fuel economy. People will carpool, bike, ride the bus, shop once a week instead of three times, put off a vacation, whatever it takes. But when they need to take their kid to the doctor, gas will be available.
Price controls are ALWAYS the sign of a failed government. Any politician proposing price controls is not only worthy of being turned out of office, but of being shot as a traitor and a statist scoundrel. And I include post-hurricane disaster "gouging" in that statement too. Always and everywhere, price controls are far worse than the problems they propose to solve.
-ccm
Yes, it is, because the higher prices stay in the short term, the sooner alternative fuel capacity will be developed in the North American oil shales and tar sands, and the sooner we can tell the Muslims and Hugo Chavez to go piss up a rope.
We'll have (relatively) cheap fuel from our own back yards for three hundred years, beginning right about the time the Mideast oil fields get sucked dry. We'll not only be the unchallenged military and economic superpower, but we'll also be in the position OPEC is now in. We will bend the entire world to our will.
-ccm
Rubbish, the Great Depression was a result of the Smoot-Hawley tariffs, i.e. government meddling by idiot politicians who thought they had some kind of superhuman insight that made them smarter than the market consensus.
Plus ça change, plus c'est la même chose.
-ccm
"Politicians on both sides of the aisle are paid off by the oil barons. They will not do squat. I am curious though. Why would Exxon not use the 400 million on researching alternative fuels investing in a refinery etc? But instead they spent 400 million on a retirement package."
If someone actually WANTS to be president in 2008, they should simply design a campaign around a picture of this guy and his $400 million. The oil companies are apparently in bed so tight with both parties at this point, they don't even CARE about bad press.
If there is any comfort, given the morbid obesity issue, he'll never live to spend it. His kids will probably blow it, thus returning the money to economic circulation. See? Capitalism works!
Because the station owner has to buy his next delivery at a higher price. He either charges more, or he closes his station and you trundle down the road another mile in search of another station.
-ccm
So his next tankerload arrives and he raises his prices accordingly. By your logic retailers like Wal-Mart should be raising prices on existing inventory to compensate for future price increases from the supplier. I see no evidence of that. Upping your price 20 cents a gallon 1000 gallons before the tanker comes does little to help keep the station owner in business, but makes the customers scratch their heads and wonder. 1000 gallons at .20 more = $200. for the station owner, but when the tanker comes with another 5000 gallons at 20 cents more that's going to cost the station $1000 more, so maybe he should have jacked up the price by $1.00 a gallon to pay for the next load?!?!?!? Unless you plan on going out of business after the next tankful, you "pay it forward". I normally have plenty of empathy for the "little guy" station owners but they need to watch "knee jerk" price increases (20 cents in 24 hours) to keep the good will of the customers. Interesting related article:
http://www.postgazette.com/pg/06103/681795-28.stm
I don't know if it is possible to bridge the growing gap between fiscal and social conservatives. Fiscal conservatives see energy costs and immigration as economic issues that are part of a larger economic landscape. Solutions need to be teased out of a wide range of competitive nuances. I suspect many people, like me, who think of themselves as fiscal conservatives wonder if social conservatives ever really think about anything other than their own gut reaction or "feelings" on complex issues.
Murphy station at Marsh and Tollway has spotters that go around the neighborhood to see what other stations are charging and than changes their prices to conform......price fixing.
And what do pictures prove?
But I think you wanted to throw that question at "ex-texan."
Government intervention works so well.
Back in the 1950s health care costs were 1% of GDP, but since the the Feds got involved in running the health care system in the form of Medicare and Medicaid and federal mandates, health care costs have risen to 15% of GDP and continue to rise.
Before the Feds started running the education system kids went to neighborhood schools and the literacy rate was above 90%. Since the Feds started running the education system the cost of public education has risen to more than $10,000 per year, per student, and half the inner city graduates can't even read.
But you go ahead and demand government intervention. If you think gas prices are high now (they aren't), just wait until the Feds start making the price "fair."
SmartMoney.com
Tripping Out
By Ray Hennessey
April 18, 2006
"VACATION'S ALL I ever wanted," the great philosopher and humanitarian Belinda Carlisle once said. "Vacation, have to get away."
Now's the time of year when Wall Street analysts tell us summer effectively has been cancelled. This time round, the culprit is oil, which is topping $71 a barrel. That, in turn, has helped drive prices of gasoline higher. That's causing sticker shock, so much so that you, the American consumer, will be loath to fill up your tanks and go off on vacation. In fact, you'll probably just stay at home. Luckily you filled up the air-raid bunker in your basement with Yoo-Hoo and Glenmorangie when you were worried about the Millennium Bug back in '99.
Rubbish.
Are gas prices a problem? You bet. I own a Saturn, a boring one that does nothing to increase my dating rating but certainly doesn't burn fuel like a Hummer. Still, I raise my eyebrows and whistle when I see what I'm paying to fill up my tank. No doubt the airlines will struggle with higher jet-fuel costs. (Luckily, there's never been a problem that industry couldn't handle with skill, grace and intelligence.... Oh, even I can't finish that sentence without giggling like a toddler.) Cruise lines will pay through the nose, too. In fact, any industry that uses oil-based fuels will have to pay more, and that cost will be passed along to you and me.
But will we really not pay? Will a trip to Au Bon Pain replace the flight to Paris? Of course not. As a people, we Americans relish in our vacations. We don't quite carve out the time for vacations like the French and Germans do, but, then again, with the state of their labor markets, their vacations really don't count. One has to hold a job to qualify for a holiday.
Yet, Americans are big on vacation. We work hard and we play hard (or so the beer commercials tell us). We do it with the same aggressiveness we use to do everything else. All-you-can-eat buffets on cruises are not an opportunity, but a dare. We develop strategies for beating the lines at Six Flags that can outfox the brightest brass at the Pentagon. We own Winnebagoes larger than our homes.
So, a spike in gas prices isn't going to stop us. It's just going to make it more expensive. And you and I both know we're going to pay it. Why? Because it ain't that much. Let's face it, even if there were a $20 surcharge on your airline ticket, is that really enough to tell the kids that we're cancelling the vacation to Europe and will instead play Clue until Mommy hits Daddy over the head with a candlestick in the billiard room? We just have to dig a bit deeper, but dig we'll do — in our wallets and on the sand in the O.C.
The reasons for telling you this are twofold. First, from a personal-finance perspective, it's a great time to rework the sums on the back of your envelope to factor in the higher prices. You'll pay more for fuel, and you'll pay more for other things. Plan to deal with it. Save a little more each week. You can handle it.
From an investing perspective, you'd be wise to ignore the chatter that these prices will dampen summer travel. Last year, analysts suggested staying away from companies leveraged to leisure travel. If you did that, you would've missed a nice run-up in Carnival (CCL1) and Royal Caribbean Cruises (RCL2) from the spring through the summer. In fact, once most people figured out that the gloom-and-doom predictions for summer travel weren't playing out, it was too late: The money had been made and investors bailed on travel stocks. That pattern isn't guaranteed to happen this year, but it certainly could. Many of the same themes from 2005 are being muttered about now: high oil, strife in the Middle East, rising interest rates, a spat between Simon Cowell and Ryan Seacrest. Companies dealt with all that just fine last year. They can do it again now.
Finally, this is a great chance to take yet another swipe at conventional wisdom. In investing, it almost never holds, nor is it often profitable. It's the contrarian view that often leads to the biggest gains. While other investors are placing bets on a slowdown in the economy by getting defensive, it may be worth taking a look at the companies leveraged to discretionary spending. That's where the bargains will be found, I'd wager.
Of course, I might not be around to see if the theory plays out. I'll be on holiday.
3 Ray Hennessey is editor of SmartMoney.com. Email him at rhennessey@smartmoney.com4.
URL for this article:
http://yahoo.smartmoney.com/editorspage/index.cfm?story=20060418
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