Gas Pump Posturing

RealClearPolitics ^ | May 17, 2007 | Geo. Will

[RicocheT]

WASHINGTON -- Democrats, seething at the injustice of gasoline prices, have sprung to the aid of embattled motorists. So resolute are Democrats about defending the downtrodden, they are undeterred by the fact that motorists, not acting like people trodden upon, are driving more than ever. Gasoline consumption has increased 2.14 percent during the last year.

That probably is explained by the inconvenient (to the Democrats' narrative) truth that Speaker Nancy Pelosi was characteristically overwrought when she said that Democrats intend to do this and that because the price of gasoline recently "set a record" at $3.07 a gallon. In real (inflation-adjusted) rather than nominal dollars, $3.07 is less than gasoline cost in 1981.

[RicocheT]

George Will clearly shows government taxes account more for the price of gasoline/fuel than what oil companies make in profit.

[ritewingwarrior]

The left is blind to the fact that taxes make up the large part of the burden.

[TommyDale]

Gas Pump Posturing

[softengine]

Gasoline consumption has increased 2.14 percent during the last year.

This reads as though the existing folks on the roads are driving more despite the ooh-yeah-baby-gouge-me-good price of gas. I would say that the increased consumption is more likely tied to an increased overall number of folks driving. Which could, be tied to an ever increasing population.

[Mensius]

Instead of consumers boycotting buying gas for a day, what if big oil boycotted selling gas for a day? A week? A month?

Maybe when the Dems start seizing their profit they just say screw it and quit selling here altogether.

[OKIEDOC]

Why is it that Republicans constantly let the Democrats take the high ground on every issue that affects Americans pocket books?

Republicans can say what they want about supply and demand, more driving and any other generic excuse they want to use.

However,the fact remains that people who are living near the poverty line and on fixed incomes are suffering in their family budgets.

Some of the remarks by thoughtless Liberal wannabes and environmental Wackos about hoping gas prices go higher, make a humans butt pucker with rage.

[Brilliant]

No mention of the fact that Pelosi promised to reduce gas prices during the campaign, and yet they’ve gone up by more than 50% since she was sworn in.

I guess the GOP has decided to let the Dems off the hook on that fib.

[Uncle Miltie]

"Why is the Democrat Congress raising the price of gas?"

Didn't they say they would cut the price?

< / economicus ignoramus>

[TommyDale]

I am 100% in favor of supply and demand, but you are right that it affects those middle and lower incomes most. What I don’t understand is why there have been no new refineries built, and why they decided to make repairs all at the same time, keeping supply lower. I think many of us have been very tolerant, giving them the right to earn their profits, but at some point there needs to be some payback to the consumer.

[D-Chivas]

In real (inflation-adjusted) rather than nominal dollars, $3.07 is less than gasoline cost in 1981.

Back in 1981 I was driving a land yacht that got 12 miles per gallon. Today I drive almost the same sized car with more safety features and it gets 29 mpg.

[eraser2005]

No.

George Will points out that the government makes a pretty penny on gas taxes (and using gas taxes to pay for roads is about the fairest system of taxation you could dream of).

He doesn’t show at all that the oil companies are making less than that in profit.

In fact Gulf Oil’s CEO the other day claimed refiners were making profits of up to $.80 per gallon. And that’s just the refining side of the business.

[eraser2005]

Why don’t we actually institute a hefty per gallon tax to fund an evenly divided tax rebate to all taxpayers 18 years and older? Say $2 a gallon?

The idea is if you have 1 million people consuming an average of 1000 gallons a year, you have $2 billion to divide amongst everyone. But whether or not you actually pay anything is up to you - if you do BETTER than average, you get a discount on gas, if you do WORSE than average, you get to pay for it. No reliance on CAFE, just consumer habits. You can adjust withholding tables so that cash flow isn’t a problem, and when you fill up with gas at $6 a gallon, you think twice about how much you drive and WHAT you drive. But whether or not you actually pay a cent more is entirely up to you.

I’d bet such a system would actually long term lead to curbed demand, more fuel efficient vehicles, and help keep people from rushing out to buy a 9 mpg monster when gas is $1.20 a gallon, thus minimizing the pain of the inevitable spikes.

[eraser2005]

BTW, is there any explanation for why gas futures are up 6 cents a gallon today, one day after the first significant build in stockpiles in ages was reported?

[Blessed]

>BTW, is there any explanation for why gas futures are up 6 cents a gallon today, one day after the first significant build in stockpiles in ages was reported?<

Because a willing buyer found a willing sellar at that price.

[thackney]

-—What I don’t understand is why there have been no new refineries built-—

It is not the oil companies holding us back

Arizona refinery permit took seven years, Senate told
http://www.tucsoncitizen.com/daily/business/19103.php

and once they got the permit:

Construction is temporarily halted at planned refinery site near Yuma
http://www.azstarnet.com/allheadlines/181426

At the same time they are spending billions upgrading and expanding the existing refineries as well as building new refineries in countries where they are allowed to do so. But even the expansions here get hung up by NIMBY’s, environmentalists and the courts that support them.

http://online.wsj.com/article/SB117789455598286509.html?mod=googlenews_wsj

http://www.motivaenterprises.com/images/editor/ExpansionUpdatePressRelease.doc

http://www.panews.com/local/local_story_120184906.html

http://www.bakersfield.com/102/story/122840.html

http://www.gulflive.com/news/mississippipress/index.ssf?/base/news/117645937628530.xml

http://www.turnto23.com/news/12468302/detail.html

http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=18c2e535-e1b1-41d7-896f-9041bd59a7ca&&Headline=New+refinery+at+Jamnagar+6+months+early

http://in.today.reuters.com/News/newsArticle.aspx?type=businessNews&storyID=2007-04-16T131854Z_01_NOOTR_RTRJONC_0_India-294373-2.xml

[eraser2005]

Thanks... :P

Obviously, though, its not just 1 buyer and 1 seller. Its many hundreds or thousands all who have some reason to believe that a good price increase is justified when supply finally shows that it is beating demand.

[thackney]

-—BTW, is there any explanation for why gas futures are up 6 cents a gallon today, one day after the first significant build in stockpiles in ages was reported?-—

Because in spite of high prices, demand for gasoline this May is higher than it has ever been? And stocks are still way down compared to normal?

U.S. Weekly Finished Motor Gasoline Product Supplied
http://tonto.eia.doe.gov/dnav/pet/hist/wgfupus2w.htm

[Blessed]

>Obviously, though, its not just 1 buyer and 1 seller. Its many hundreds or thousands all who have some reason to believe that a good price increase is justified when supply finally shows that it is beating demand.<

Futures are just what the name implies (futures).They are betting on what supply and demand will look like in the future not today.

[lepton]

bookmark bump

[eraser2005]

So the news finally got out to us peons..

3 refinery problems - ConocoPhillips announced it would shut down a 146 kbpd unit for maintenance, BP announced it would shut 115 kpbd at Texas City for 11 days for unknown reasons, Murphy Oil reported a problem yesterday at their Meraux, LA refinery and there was a gasoline pipeline shutdown in the northeast.

Murphy and the pipeline are back to normal. No news on the Conoco unit or from BP.