Why is Gasoline so Cheap?

It amazes me that anyone who believes in the free market thinks gasoline in the U.S. is expensive. The reason gasoline prices are going up is because gasoline demand is going up and people are willing to pay the price. In other words, gasoline is underpriced.

The question is, if people are willing to buy just as much gas at $3 a gallon as they are at $2 a gallon, why in the world would an oil company sell it any cheaper? That be malfeasance on the part of the management and call for the stockholders to demand new management.

Gasoline is cheaper than some bottled water and certainly cheaper than a Starbucks coffee. When adjusted for inflation, it is even cheaper than it was in the early 1980s.

We certainly do not have a gasoline shortage, nobody has touble getting gasoline and their are no huge lines at the service stations. At some point in the not too distant future, gasoline will become more scarce, and at that time, it will certainly cease to be cheap, as it is today.

So enjoy today's cheap gasoline while you can.

Merritt

Reply to
Merritt Mullen
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This is all fine and good but the country doesn't run on expensive bottled water or Starbucks coffee since neither are required by anyone. Gasoline is entirely different in that it's required by nearly everyone. It isn't right for oil companies to rape the consumer just because they can. We all pay [BIG time] for the federal government to look out for us in matters such as this. Currently they're all too bust lining their own pockets to be concerned with taxpayers. But that'll all change when election time rolls around. Just wait and see.

Reply to
FanJet

You have a valid point. I remember the gas crunch of 1973, I was returning from Indiana after attending an Allison school in Indianapolis. It was Friday and as I drove though Chicago with an almost empty tank and no gas stations open I got a feeling I'd be stuck along the tollway somewhere. Some distance outside Chicago I pulled off the tollway and drove a few miles hoping to find a station. I found one in a small town. Although I could only buy $2 bucks worth I did and it was enough for me to make it across the Wisconsin border where gas stations were open all over the place and no lines. It was another orchestrated fiasco by the carter administration, (he served only one term before being given the boot), a planned shortage.

This time there is no planned shortage and GWB is allowing the market place to function. We have no long lines and no shortage but we are paying high prices. As you say we have the choice, to pay or not pay. At least we have gas to buy. GWB is doing it right and he will also do his best to increase refining capacity and get more nuclear power plants built. The nukes have to be built. I hate to quote the French, but they are being smart in their building the nuclear plants, we should do the same without delay.

Reply to
Dbu.

"FanJet" wrote in news:XczMe.19$ snipped-for-privacy@monger.newsread.com:

Water and coffee are also not strategic commodities. The threat of a coffee machine breaking down (or a war in a coffee producing country) do not have the same tendency to increase prices.

Water and coffee are not subject to the amount of cost-raising regulation that gasoline is. Water and coffee producers are not operating at 99% capacity, unlike oil refineries.

How do you know they are? Is a 9% net profit margin "rape"? 15% would be a healthy profit margin.

The last time we had governmental price controls (1979) gas was the equivalent of nearly $10 per gallon in today's dollars.

Government intervention would be catastrophic. The absolute WORST thing that could be done.

However, an excellent idea would be for governments to stop interfering with the building of new refineries, and to stop debasing the currency, both of which dramatically increase the price to you.

Reply to
TeGGeR®

"Dbu." wrote in news: snipped-for-privacy@news-rdr-03.rdc-kc.rr.com:

That $2 is close to $10 in today's dollars.

Not really planned, and not by Carter. The fiasco was an unintended byproduct of bad legisilation: Nixon's wage and price controls of 1971. Those controls were mostly repealed by 1973, but NOT FOR OIL.

Carter and Ford did not have the political will to repeal price controls. Reagan did. Thank God for that.

He could do more by stopping the currency debasement that his administration had been engaged in for years. Have you priced gold in US dollars relative to other currencies? That's GWB's work. He's proven to be a lousy economist, or at least to have lousy advisers.

It would help if the various governments had the political will to resist the NIMBYs and activists, and to repeal a few regulations, all of which have prevented any new oil refineries from being built since 1976.

Reply to
TeGGeR®

More evidence that gas is cheap:

Remote starters - Idle for 15 minutes just so it's nice and warm when you get in.

Leave the engine running while you shop so the AC stays on.

Moms drive their kids (in SUV's) from the house to the end of the driveway, and idle for 10 minutes, so the kids stay warm waiting for the school bus.

IMHO, the first indication that gas is getting expensive is when people turn off the engine when they're NOT driving.

Reply to
kgnorwalk

I must be poor folk then, because I've been doing that for years.

Charles

Reply to
n5hsr

Ok. You yanks pay $3 a gallon, which is around $4 in AUD. A gallon is 3.8 litres or near enough for my purposes here.

Just over $1 / litre. In Sydney, Australia, we're currently paying $1.28 a litre, for the cheapest available 91ron shit.

Works out to roughly $4.85 / gal in AUD.

Think about that - would you pay $5/gal?

As for expensive...German gasoline is priced at around $5.70/gallon. (My research did not clarify if this was in USD or Euros. I hope for the Germans sake that it's in USD.)

-mark

Reply to
mark jb

People are still joy riding without concern. Like the guy said, gas is cheap and I don't see lines. We're in good shape. Which reminds me.

When I pumped gas at age 16 gas was $0.28 per gal. $0.32 for hi-test. This was at a Phillips 66 in the late 50s. Candy bars were a nickel and nut goodies were a dime. Pop was a dime. I could get a nice big and I mean big ice cream cone double decker for a dime. This was in a small farm town of 400 folks. Everybody knew everybody. My dad had no health care, dental care ect. When we needed the doc he would come to the house and my dad paid cash for the visit. We made it ok. Nobody complained. Back then it seems people had more common sense and could figure things out on their own. There were no such things a gay marches and condoms being passed out to kids. People who did drugs were called dope addicts. Now days everybody complains about everything yet we all have a zillion times more stuff to entertain us and benefits up the kazoo than 45 years ago. Dope addicts are called drug abusers and get government bennies to help them through their troubled times.

Reply to
Dbu.

Now is that bennies as in bennies or bennies as in benefits?

Charles

Reply to
n5hsr

It took me a while to get used to sody down in the south. It's different enough between Northern and Southern Illinois with Creek vs crik, Route vs Root, etc.

I'm fixin to go to work now. . . .

GD&R

Charles of Kankakee

Reply to
n5hsr

as in freebees. Yes benefits. not dope.

Reply to
Dbu.

I'm surprised with some of the giveaway programs of the Clinton administration that there aren't a few programs actually giving away bennies.

("I didn't inhale". Yeah, right. What about all the pot parties at the Arkansas Governor's Mansion?)

Charles of Kankakee

Reply to
n5hsr

I remember also dbu, I bought a top of the line Ford galaxy 500 XL with everything in 1964 and it was $3000. Gasoline was about 0.35 then - I'd bet the equivilent Ford today would be 10times (30,000) and ergo gas at 3.50 would be about the 40 year march.

Reply to
ron

But not water? What do you do--eat the coffee beans dry? :-)

Reply to
Ernie Sty

And Japan, last I knew, was about a USD more than you're paying.

Venezuela, $0.17 USD...

Reply to
HachiRoku

More money than brains? Perhaps that's why the price keeps increasing?

I LOVE when the prices go up, because the local news (and sometimes CNN et al) usually pick some person at the pump complaining about the price of gas, and of course they're driving an Excursion...

Reply to
HachiRoku

This is very true. Upon returning from Vietnam in 67 I bought a used Chevy, but was not too happy about it so then a bit later I bought a brand new 1969 Plymouth Road Runner for a little over $2800, it was a sweet auto, I still have the service manual and original Motor Trend magazine which featured it as the 1969 car of the year. I wish I still had that sucker, it was red with a black vinyl top, 383 Cid. Those were the days.

We're better off now days in many areas including healthcare, but folks out there don't seem to notice. Stuff is cheaper now than 45 years ago and we have more of it. So I don't understand all the complaints. On the other hand oil, is a finite resource and will continue to diminish over the next several decades. Where this takes us I don't know, perhaps to the 1800s again? So, we need planning. We need more nuclear power plants and better fuel milage of our personal vehicles, even though it may mean less towing capacity and smaller cars. Maybe a whole different way of propelling our cars, solar perhaps? Not to mention plastics. What would we do with out them world?

Reply to
Dbu''

Thats illegal in the UK. Good job too...

Here in the UK we're now averaging 92pence per litre (for basic unleaded) ...ummm (thats about 6.30 USD per US gallon). Ouch. I have started riding the 36 mile round trip to work 'cos it saves me around

500$ a month in fuel. J
Reply to
Coyoteboy

I'll bet this person drives a Suburban and voted for Bush. The price jump in gas over the last 6 months does not equate to inflation, it just doesn't work that way. Remember the (supposedly) gas shortage in the

70's ? Well, here we go again, but this time it's going to have a more drastic effect, like our economy. I'd be willing to bet there would be no chance in hell that Bush could get reelected if this was only his first term. WE NEED A CHANGE AND WE NEED IT SOON. BTW, I drive two Toyotas !!!!!

Merritt Mullen wrote:

Reply to
Joey

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