Free Republic

As families brace themselves to pay high gasoline prices over the Labor Day weekend, they might be surprised to know that they are not alone in bearing this burden. A new economic study by the Phoenix Center shows that contrary to popular rhetoric, the profitability of the oil industry is actually significantly lower during in times of high gas prices. “It may be fashionable to beat up on oil industry profits, but it appears that these firms do bear at least some of the burden of high oil prices,” said George S. Ford, Phoenix Center Chief Economist and author of...

Here's what one reader wrote: "Williams, I can understand how the destruction of Hurricane Katrina and Middle East political uncertainty can jack up gasoline prices. But it's price-gouging for the oil companies to raise the price of all the gasoline already bought and stored before the crisis." Several other readers made similar allegations. Such allegations reflect a misunderstanding of how prices are determined. Let's start off with an example. Say you owned a small 10-pound inventory of coffee that you purchased for $3 a pound. Each week you'd sell me a pound for $3.25. Suppose a freeze in Brazil destroyed...

If Willy Sutton were alive today, he’d be eyeing the oil industry. Sutton, you’ll remember, was once asked why he robbed banks. “‘Cause that’s where the money is,” he replied. According to our sources, Evo Morales may be doing a Willy Sutton number. As candidate for President, he promised the Bolivian peasants a big pay increase. Then, when he got into office, the mean people at the national treasury had a little talk with him. “Where was the money going to come from?” they wanted to know. Evo looked around. He was losing popularity fast. What did the country have...

just heard on the radio that Sen.Coleman wants to be notified about price gouging for gas. the site to let him know is http://gaswatch.energy.gov/ I think I'll let him know his decision to not drill in ANWR is gouging what I'll pay in the future . taxing gas at high rates doesn't help either. Feel free to add to the list of stupid things our gubmint does to make our lives more entertwined with their sense of self importance with regards to energy.

by Mark Finkelstein April 25, 2006 Have a look at the two screen captures from this morning's shows. Same issue, different takes. Good Morning America is apparently sure that gas price gouging exists, and wants to stop it. 'Today' is agnostic, simply posing the question whether gouging is going on. But when you turn to the substance of the two segments, there was one consistency: neither show adduced any evidence of gouging. Not a scintilla to show that oil companies are in fact colluding. And without collusion there can be no sustained gouging, since any company that pushed prices higher...

Bush Orders Probe Into Gas Price Cheating By NEDRA PICKLER ASSOCIATED PRESS ABOARD AIR FORCE ONE (AP) - President Bush is trying to calm Americans' outrage over soaring gas prices by ordering an investigation into whether the price of gasoline has been illegally manipulated, his spokesman said Monday. During the last few days, Bush asked his Energy and Justice departments to open inquiries into possible cheating in the gasoline markets, said White House press secretary Scott McClellan. Bush planned to announce the action Tuesday during a speech in Washington. Bush is under pressure to do something about gas prices that...

September 13, 2005Local, State and Federal Gas Taxes Consume 45.9 Cents Per Gallon on Average by Jonathan WilliamsIn the wake of Hurricane Katrina and the devastation that has followed, consumers are feeling the economic consequences of the disaster. Record gasoline prices are constantly in the headlines, which leaves many asking why prices are so high. While supply and demand are the primary determinants of gasoline prices, a significant portion of the price consumers pay at the pump can be attributed to gasoline taxes. In fact, the federal gas tax alone equals 18.4 cents for every gallon purchased (See Figure...

Lundberg says national average rises to $2.67 a gallon, but price run-up may be ending.April 9, 2006: 4:37 PM EDT ATLANTA (CNN) - Gas prices shot up another 17 cents per gallon over the past two weeks to a national average of $2.67, a survey said Sunday. Since Feb. 24, the average price of a gallon of self-serve unleaded has risen 42 cents, said Trilby Lundberg, publisher of the Lundberg Survey, which tallied prices March 24 and April 7 for its latest survey. "Some of the pump price surge comes from higher crude-oil prices, but most is the new fuel...

A report released this week by attorneys general from four Midwestern states suggests that natural gas prices have been artificially inflated by energy trading companies and by the system that local utilities use to buy gas. Many of the purchasing practices and price-setting mechanisms identified as unfair to consumers in the Midwestern report are used by Mobile Gas Service Corp., the Mobile Register has discovered. "Obviously there are issues there (in Alabama) that need to be examined," said Wisconsin Attorney General Peg Lautenschlager, after discussing Alabama buying practices with Register reporters. She compiled the Midwestern report with her counterparts in...

Gas Stations Fined for Gouging by R News Staff Published Dec 19, 2005 Fifteen gasoline stations statewide have been fined more than $63,000 dollars by New York state for jacking up prices after Hurricane Katrina Attorney General Eliot Spitzer's office released Monday the results of a three-month investigation into the gouging. The No-Co gas station on West Main Street in Webster is among those fined for the gouging. State officials say three oil companies, Getty, B.P. Amoco and Lukoil set prices for the service stations they control. Spitzer's office says the investigation of other retailers continues. Local gas prices hit...

McBride Pleads Guilty to Gouging Livingston, Ala. Andrea Williams Recently, 42-year-old Jason McBride was indicted for alleged gas price gouging. Initially he pleaded not guilty. Monday morning his attorney stated in Sumter County Circuit Court that he's changing his plea to guilty. Although prices at McBride's stores are dropping now immediately after Hurricane Katrina McBride is accused of selling store in Sumter County. To this accusation McBride had said that right after the storm he charged $3.49 per gallon for gas due to the fact that he paid $3.29 per gallon for it. Meanwhile, McBride is listed as secretary treasurer...

The following is taken from a thread found on the Timebomb 2000 message board. It provides a sampling of the public reaction to today's announced record-breaking profits by the major oil companies: [What are] the root causes of all problems in this country? I think at least one of them has been illustrated today with the announcement of the oil companies record setting profits for the last quarter. While we were trying to make ends meet, they were raking in profits the likes of which the world has never seen before. That's price gouging brothers and sisters. They lied to...

Posted by Baja Cactus, owner of the Pemex station and motel in El Rosario. The Mexican government sets the price each month. As you all may already know, the last of every month, Pemex changes the fuel prices...usually only a couple of cents. So, here you go the prices for October 2005... Magna............$ 6.12 pesos per liter Premium..........$ 7.23 pesos per liter Diesel.............$ 5.06 pesos per liter These prices are in liters, and 1 gallon = 3.7854 liters. Today (october 4th) 1 dollar = $ 10.70 pesos (+/-) Using the previous information, this is what we have.... Magna............$ 2.165 dollars...

The fallout from Hurricane Katrina has featured a lot of ignorance and demagoguery about prices. Let's look at some of it. One undeniable fact is that the hurricane disaster changed scarcity conditions. There are fewer stores, fewer units of housing, less gasoline and a shortage of many other goods and services used on a daily basis. Rising prices are not only a manifestation of these changed scarcity conditions, they help us cope, adjust and get us on the road to recovery. Here's a which-is-better question for you. Suppose a hotel room rented for $79 a night prior to Hurricane Katrina's...

Gouging - even the word sounds frightening. These days, there's been a near-unanimous call for the public to be outraged over price-gouging at gas pumps around Denver. Well, I'm not outraged, and you shouldn't be either. Here in Colorado, as elsewhere in the nation, high gas prices have generated hysterical, populist rhetoric from those who've forgotten the fundamental principles of supply and demand. "Gas-price gouging is not illegal under Colorado law, and we think it should be," Colorado Speaker of the House Andrew Romanoff recently claimed. I'm not sure what Romanoff meant by "we" - I would like to be...

Westchester County's consumer agency subpoenaed the records of 11 service stations Wednesday to see if they were justified in raising prices by as much as $1.14 a gallon in 24 hours. At one of the stations, the price went from $2.85 on Aug. 31 to $3.99 on Sept. 1, said County Executive Andrew Spano, who ordered the subpoenas. "If we find that stations are gouging when so many people are suffering, we will do everything in our power to come down hard on these people," he said. The gas stations that received subpoenas had raised prices by more than 60...

...Some 20 states... already have anti-price-gouging laws on their books-- and many governors have declared emergencies to invoke them. These de facto price controls typically place ceilings of between 10% and 25% on how much companies can raise prices in the wake of a natural disaster. In almost all cases such laws are wrong-headed, because they exacerbate supply problems by short-circuiting the price system that matches supply with demand. ...If governments will not allow the price system to ration the demand for gas, a new "price" system will emerge called gas lines.... Let's explain why prices have been rising. Katrina...

Price controls, however, come at a cost. Lower prices result in more demand for fuel than do higher prices. That’s why the first thing we notice about price controls is that they lead to shortages. Price to the left of the intersection of the supply-and-demand curve and you are guaranteed to vaporize whatever you are attempting to keep inexpensive. It happened in 1973 when President Nixon imposed price controls on oil — gasoline lines were the result. It happened in 2000/2001 when California Governor Gray Davis refused to lift retail price controls on electricity — blackouts soon followed. Empty shelves...

Both Democrats and Republicans on the [Senate Energy and Natural Resources Committee] panel expressed concern that fuel prices are choking U.S. consumers. [. . .] Sen. Lisa Murkowski, R-Alaska, said $100 a barrel oil is "not so far out of the realm of possibility," and asked "is that something this country can sustain?" [. . .] Sen. Gordon Smith, R-Ore., said he anticipates "we're going to find many instances of manipulation and fraud." Sen. Pete Domenici, R-N.M., the chairman of the committee, said the panel is prepared to call on oil-company executives to explain rising fuel costs if there is...

I just paid $4.09 per gallon to fill up with regular. An hour ago the same station was at $3.09. I have verification from WSB Radio 750 Atlanta that local stations are charging from $4 to $6 per gallon, while Atlanta motorists are queued up for blocks to get some. Rumors are that the gas supply in Atlanta will run out before the weekend.