I agree 100% with you, that the market has to remain free in a capitalistic sense or you’ll lose the ability to control supply and demand.

What spoonman doesn’t realize is that there is a speculation aspect to the oil and gas market not only on a global stage, but a local stage as well.

Gas station owners are setting prices today based on what they speculate they will pay for a shipment tomorrow. So if a hurricane threatens the gulf coast again, you can be sure gas prices will rise all over the country as the market speculates on what the effect will have on the supply.

I suspect that while spoonman feels he needs to change jobs just to pay for his gasoline, he probably has a few other luxury items/habits he could cut back on first.

-Grant
TheCornerOfficeBlog.com

To all,
1. I don’t know how many percentages of the local gas stations are owned by small business owners, but I did have a relative who opened a Shell gas station. He told me that selling gas is really very low margin business. He gets more profits from the convenience store at the gas station than from selling gas.

2. On 87, I don’t really have any problems taxing big oil companies. It’s a capitalistic society. Every state is free to do whatever they want. But restricting passing the cost is not capitalistic. It’s like saying you come here and do all the cleaning for the house, but I will pay you at less than below minimum wage. Two things may happen for a very high tax imposed:
Either it’s no longer economical to drill oil from California, in which case, no further drilling will happen, and therefore drive up the prices even more because of the decrease in supply, or
They continue to drill and pay taxes, but instead ship these oil to other states where they can legally pass the cost to customers. Now California will still end up paying more, because the gasoline will come from out-of-state, and with additional shipping cost, gasoline will be more expensive for both California, and states near California.

Again, it’s capitalism. No one will do free work. If it’s truly free work or not making any business sense, companies or individuals will simply STOP doing business in California. And that will mean again reduce supplies and then increased price.

Most of the government regulations end up increasing consumer prices. Regulations are like additional hidden taxes which at the end the last guy in line will need to pay.

By the way, California is very environmentally conscious, and has LOTS of red tapes on drilling and refining business. (Hint: reduced supplies because of that = higher prices)

Well, yeah. That’s because Alaska and Texas make it easy for companies to drill, and can thus will pay the fees. If you make it nearly impossible to drill, you don’t gather the fees.

Maybe they meant something else by it, but that’s the message I got.

However, in the first example that you described where all local gas prices are about the same, I think that’s just capitalism. In a capitalistic society, obviously you always sell for the maximum profits among competitions. Do you think there is any local gas station that can charge you $5 a gallon and still have booming business? That’s the power of capitalism from competition. Without competition like monopoly, profit margins tend to be very high, which is not the case here.

I’m sorry to hear about your job situation. But I think US has a very tough adjustment ahead. In many other countries where oil taxes are very high and their gas price is somewhere from $4 to $6 a gallon, they have developed their economy using more mass transit transportation infrastructure. Capitalism adapts, and their countries adapt to a high gas price. US will need to adapt slowly too. Certainly the pain of going from $2 to $3, a 50% increase, is much bigger for $5 to $6, a 20% increase.

In any case, prices at all local stations cannot have too much difference, based on the crude oil factor. Crude oil fluctuate only some 2% maximum a day, and usually about 1% or less. That’s about 6 cents difference in the $3 gas. I don’t think you can see any big differences, unless it’s the real estate price or rent that these stations are sitting at. Just my two cents.

And if you want to lock in your gas prices, you can always buy USO right now. You can get close to all the price increase back.

The problem is, capitalism is NOT at work in gas prices. Captialism does not equal screwing people for maximum profit. Gas prices are based on speculation and greed. If there’s a chance of a storm in the southern states, gas prices go up REGARDLESS OF WHETHER THAT STORM HAS AN IMPACT ON FUEL PRODUCTION! If I buy a widget and then turn around and sell that widget for a profit I typically have a set profit margin. Gas companies and stations do not follow those rules. If they buy gas, the price they sell that gas for will fluctuate during the course of the day depending on how much they think they can screw people for. If a neighboring station raises their prices, they raise their own. A simpler solution to the problem is to force them to keep their prices steady for products they’ve already purchased. Reductions in how much we consume is a great ideal, it’s also unrealistic in any immediate future.

And, I don’t know about your area, but the last time I saw gas for 99 cents was 1992 and I was happy at that price because it had been fluctuating in the high $1.30s for months prior. You can try and put a positive spin on it as much as you like, but I’m actually contemplating change jobs simply because I can’t afford the gas to get there. And that’s about as stupid a reason as I’ve ever heard for changing jobs.