Oil companies 'feel shame over prices'

perthnow ^ | 3/23/08 | pethnow

[Flavius]

ARROGANT oil companies realised they'd "gone too far" and allowed petrol prices to fall over the Easter long weekend, says a leading motoring group. The NRMA claims petrol prices rose between 15 and 20 cents a litre on the Thursday before the Easter long weekend, reaching an average of about $1.50 per litre.

Oil to stay below $110 a barrel: OPEC Oil to stay below $110 a barrel: OPEC Competition Policy and Consumer Affairs Minister Chris Bowen dismissed allegations that drivers were being ripped off, saying the price hikes were part of the weekly price cycle.

But motoring group NRMA disagrees, arguing that the cost at the bowser soared above the average weekly price cycle.

"We used to see the normal price cycle as being four to seven cents over the week, lately it's gone up to 10 cents but we've certainly never seen 15 to 20 cents as we saw on Thursday,'' NRMA president Alan Evans told ABC radio.

Mr Evans said the powerful oil companies reacted to the pressure they received over the rising costs and have now brought the prices down.

"I think the oil companies felt the shame and the pressure that they've got from the media for the behaviour on Thursday,'' he said.

"I think they outraged the public by the amount they increased their petrol on Thursday - you know, 15 to 20 cents right in front of people's eyes was just too much to bear.

[xjcsa]

Crude oil is sold on the world market. Exactly how can the US government regulate prices?

The same way they're expected to regulate the weather.

[xjcsa]

If everyone would quit buying gas from ExxonMobile stations we could see how low we could drive the prices. If all of the Mobile stations quit pumping gas for a couple days they would be forced to drive their prices lower to “entice” people to come back to their stations.

Only if you forward that email to at least ten of your friends. Otherwise you'll have bad luck for ten years.

[Fabozz]

"I am no fan of government getting involved in pricing but it seems like the petroleum industry could stand to see some regulation."

Okay. You have two choices then:

1. The government could use taxpayer dollars to subsidize gas prices. That would increase demand and consumption, which would drive the total cost of fuel plus the subsidy higher than it would have been otherwise—even if because of the subsidy you personally might be paying a little less. Net result is that the country as a whole is poorer.
2. The government could set price caps. Whenever the market-set price of gas rose above the cap, suppliers would refuse to sell, resulting in hoarding, lines and massive disruption of the trucking industry. Net result is that the country as a whole is poorer.

Which of those sounds good to you?

[xjcsa]

Why should they lower prices? What sense would that make. They would be nuts. Their stock price would crater. The oil services industry would tank. The only short term solution is more drilling and more refining. No other option. Well one...a full on recession.

Exactly. Plus they would face a shareholder lawsuit for breach of fiduciary responsibilities, and we'd have an immediate shortage of supply. But Levante, don't let that distract you from your socialism.

[PAR35]

Exactly how can the US government regulate prices?

In the short term, the US can influence prices by buying into or selling out of the strategic reserve. On a long term basis, they hold up prices by blocking drilling in domestic areas which are known to have reserves and by regulation which adds to expense and limits refinery capacity.

[mysterio]

Energy independence now.

[trumandogz]

But not shame enough to lower the f*king prices!

Because they were smart enough to pass their f*king Economics Class in high school.

[missnry]

Only if you forward that email to at least ten of your friends. Otherwise you'll have bad luck for ten years.

The evil oil companies have a greater power. If you don't forward the email to ALL your friends you will die a horrible death in a fiery car accident!

[Levante]

??

[Sunnyflorida]

While you are Thanking Democrats for higher gas prices don’t forget to thank John McCain!!!

[Republic of Texas]

The strategic reserve is not large enough for that, and the purpose of it is for emergencies. If you aren’t aware of those simple facts, don’t post.

[devere]

complete nonsense

[Levante]

“The only short term solution is more drilling and more refining”

Agreed—but do you see that happening? We have pressure NOT to drill, not to build more refineries...supposedly, the last refineries were builit 30 years ago.

[rwh]

What, and confiscate their profits and put them in a strategic fund? Or maybe we could go back to the failed policies of the 70’s? Screw that!

[trumandogz]

People who run oil companies understand economics.

Those who believe oil companies should just lower their prices do not.

[Sunnyflorida]

Or people can stop driving so much. The price cannot be too high until demand slackens. People have plenty of money for gasoline. Just go to the nearest station. Around here people seem to be pumping more than ever. And that is the way it should be. It is basic economics.

[Levante]

For your information, I passed economics in high school. It’s been a while...

Please explain ...

[trumandogz]

If only the GOP controlled the White House, the Senate and the House for a brief moment sometime between 1/20/2001 and 1/3/2007 I am sure our Republican Heroes would have done something to open addition areas for domestic drilling.

[trumandogz]

If that is the case, then you should know why oil companies cannot just lower the price of gas.

[iThinkBig]

By having the balls to subsidize a competing product such as nuclear, biodeisel, coal liquification, hydrogen, solar and de-regulating so we can drill our own friggin oil right in the good ol’ USA. Then we can give the global consumer want it wants.