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To: SoldierDad
Just because at one point in time the U.S. oil companies were not doing well, does not now mean they haven’t figured out they can get away with these unjustified price hikes.

You have clearly fallen for the fallacy of "just price" theory, combined with some leftist conspiracy drivel. If the oil were not more valuable to the buyer than the money paid for it, the buyer would just keep his money and go without the oil. Since the oil *is* more valuable than the money (to the buyer), he buys, and both parties win.

Oil commpanies aren't "getting away" with anything. They're selling a product for the price the market will bear. They aren't some kind of monolithic "big oil" group - the global oil market is huge and has lots of players. The price of oil is where it is because that's what it's worth to people at the moment.

Read this article by Thomas Sowell for more discussion of pricing in markets. It's well-written and insightful, as Sowell always is.

143 posted on 03/02/2008 1:36:48 PM PST by xjcsa (I hated McCain before hating McCain was cool.)
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To: xjcsa
If the oil were not more valuable to the buyer than the money paid for it, the buyer would just keep his money and go without the oil.

You may be able to make this statement regarding most other consumables, but not with oil and gasoline. It is not a matter of whether the product is "valuable" to the consumer. It is a matter of the product is vital to the consumer. You go ahead and try and make it through a day, week, month, or year without purchasing that which is required to either move people, goods, or services and see what happens. Everything would come to a standstill without petroleum, and the oil companies know this. They know that despite whatever artificially inflated price they come up with consumers will HAVE TO BUY fuel. The oil companies also are pretty savy in the artificial price hikes. They raise them to a point just shy of where consumers will begin to revolt, and then drop them a bit for a while. Then, start the process all over again. They've been doing this since the late 1990's as they've factored into their profit margins that consumers will cry, but not do anything different as long as they engage in this practice at a slow pace. It's like placing a frog into a boiling pot of water versus putting a frog into a pot of cold water and slowly raising the temperature. The frog dropped into the boiling water will attempt to get out. The frog in the water that is slowly raised to a boil will do nothing and eventually be boiled to death.

168 posted on 03/02/2008 2:33:00 PM PST by SoldierDad (Proud Dad of a 2nd BCT 10th Mountain Soldier home after 15 months in the Triangle of death)
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