Gas Pump Thievery: Who's Really Behind the Rising Prices at the Pumps?
By Jim Hightower, AlterNet. Posted June 25, 2009.

http://www.alternet.org/workplace/140889/gas_pump_thievery%3A_who%27s_really_behind_the_rising_prices_at_the_pumps/

Like a Fourth of July crescendo of fireworks, our gasoline prices are rising higher and higher. While this is tough on consumers, we're assured by a covey of tongue-clucking industry analysts that nothing can be done about it, for it's simply the law of supply and demand in action -- so suck it up, and pay up.

...  Supply and demand? The supply of crude oil has risen this year to its highest level in nearly two decades, even while the demand for gasoline has dropped dramatically, having fallen this month to a 10-year low. Let's see -- supply up, demand down. That's a classic market formula for cheaper prices at the pump. Yet our prices have steadily moved up, rising by two-thirds since the beginning of the year (and by 60 cents a gallon in the past two months alone).

What's going on here is not the "magic of the marketplace," but some hocus-pocus by brand-name dealers. What might surprise you, though, is that the wheeler-dealers now jacking up our pump prices don't operate under the BPExxonMobilShellChevron brands -- but the logos of Goldman Sachs, Morgan Stanley and other Wall Street traders that have been placing vast, unregulated, secretive bets on the future price of oil. ...

The cost of gas does not end at the pump. There is the air and water pollution. Then there is the manufacturing of all those throw away automobiles. There there is all the time wasted driving them. Not to mention the human cost of roads and isolation.

Demand for gas at the pump is notoriously fickle -- it is very rigid in the short term, but very flexible in the long term. Once you've decided to make a trip, it's hard to change your mind. I think that's why big fluctuations in gas prices are really annoying.

(I think another part of the reason is that they are prominently displayed all around town -- the price of a dozen eggs or a gallon of milk varies similarly, but the prices aren't posted on billboards.)

See, I really wish prices would go up to about $4.00/gal or more -- that's about where people really start to change their behavior -- but stable, so that people could plan better. I'd be all for government regulating prices to be high (keeping the difference through taxes) and stable, so that these swings wouldn't cause so much economic uncertainty.

Well than too bad that AAA reported that gas prices at the pump are coming back down again.

What we might have seen earlier in the year was an overcorrection downward. The price of gas is probably just finding its proper price point, per supply and demand.

For the foreseeable future somewhere between $2.65 and $2.85 ia what I would term as being reasonable.

QuoteThe price of gas is probably just finding its proper price point, per supply and demand.

The market is not that simple. If you buy a microwave made in China it will drive gas price up. Why? because that puts more money in the hands of a China worker that buys a car and is now consuming oil that is competing with the gas you use.