Gas, Why?
Can Anyone please tell me why gas is going up?. I Mean a real, logical answer.
I know what all the newsies say and what our Goverment is feeding us, but I was always taught that when you sell more of a product you can offer it at a cheaper price.
Most all other consumer goods are marketed under this economic theory, But the main reason that they are giving now is with the summer traveling season coming soon the demand is so that they will have to raise the price of oil. Why cant the corporate Fat Cats, make the same amount of profit off of more sales rather than trying (and Succeeding) to make more profit at once?.
Lets face it, OPEC is taking over this country one gas station at a time, Mean while I am sitting on the leases of 5 capped off wells in NW Texas that the Oil company says they can’t afford to pump out of. I guess that might eat into his bonus this week, after all one cant live on 50K a month!
And as for the need to refine newer and cleaner grades of fuels, and raising the prices for that, well I’m for the cleaning up of the planet and the atmosphere, but why every time that the EPA mandates something new does my profit drop? Two words, Corporate Greed.
April 12th, 2005 at 10:25 pm
I’m no economics major, but this is a supply/demand situation. Oil is a limited resource managed by OPEC countries that can or choose only to produce so many barrels a day. World demand has been steadily increasing, especially with China gobbling up large amounts in their roaring econonmy. Also all of our gas guzzling SUVs, sport sedans, and sheer number of cars contribute to demand. So since there is a maximum amount that is offered due to scarcity, logistics, and processing, the price goes up. The price can continue to go up until demand equalizes, which means groups or individuals make a decision to use less oil. For example, on the smallest level, a person may decide that it costs too much to drive to the store or to own that SUV. There is a good article talking about world demand in The Economist.
Economies of scale generally apply more to the production of products rather than commodities, such as oil.
April 13th, 2005 at 6:01 pm
You also have to look at the automotive industry and the oil industry in America….. With new car sales falling and wanting to sell their new downsized cars with smaller low-powered engines, we all of a sudden had a serious oil stortage in the late ’70’s, early ’80’s….. Once the public accepted that the price of gas at the pump would never be below $1 per gallon again, there was just as suddenly plently of gas….. The oil companies made a nice profit and the automotive industry had a huge market for their gas-saving peanut-mobiles…..
Over the last few years, the automotive industry reversed the downsized cars and have been pushing large cars and SUV’s with big V-8 gas-eater engines with price tags costing more than a new home, so I’m sure that sales have been dropping off because a regular hard-working Joe just can’t afford them…. I’ll bet this latest oil shortage will put the price of gas at the pump over the $2 mark on a permanent basis and we will see the automotive industry again pushing new smaller gas-saver cars…. Better push that big V-8 over a cliff because you’ll have problems giving it away, but I bet your dealer has a brand-new 4-cylinder just waiting for you…. As Jek pointed out “production of products” and the control thereof…..
April 16th, 2005 at 2:59 pm
So in other words what you are saying is this is just another turn of the marketing cycle? Partly brought on by the auto industry. If so when does the common man’s( and Womans) wages go up to meet the market place? oh yeah, the more that the public can charge, the more outrageous interest fees that the fat cats can collect. ( I just love it when I answer my own questions. But as for OPEC. why are we beholden to Foreign Oil? I’m sorry America First! Then if we don’t have enough to go around then buy from outside sources.
April 16th, 2005 at 9:52 pm
JJ sez: “why are we beholden to Foreign Oil?”
The US is not rich in oil. In fact, I’m sure that our demand for oil is greater than what is economically feasible to pump from our own land. There may not even be enough US oil to match demand.
I got the following 2003 petroleum data from eia.doe.gov.
Also I wanted to clear up some possible confusion: The 70’s oil crisis was due to the Arabic embargo and was unrelated to the auto industry. In fact, the auto industry does not influence the price of gas. They work on developing cars that people will buy. At this point, the smarter ones are probably producing energy efficient vehicles.
April 21st, 2005 at 9:05 pm
No, is what we need is “Jurassic Park” up and running and then we can cook a few dinos for 265 million years and we would be set!……
I admit mystatements contained in Comment #2 may have been off some on the ’70’s oil crisis concerning the automotive industry, but why are they still manufacturing and pushing the sale of large V-8 cars and SUV’s?…… I don’t see much development on their part for more fuel efficient or alternative power transportation…… There’s got to be a tie-in with the oil industry somehow (in my opinion)!……
In the 1950’s scientist’s were predicting that the internal combustion engine would be a thing of the past by the 1990’s….. Not only that but we would have “Back to the Future” flying cars….. George Jetson said so!……. This is 2005 – Where’s my “5th Element” taxi, Damn it!……