Gas Prices

[VirginiaHuguenot]

In a discussion with my father earlier this year, we were considering why gas prices have risen so dramatically this year. He blames oil companies and only oil companies. I asked him to consider whether Iraqi insurgents, trouble in Nigeria and Venezuela, OPEC market controls, hurricanes in the Gulf of Mexico, market speculators, Democrats in Congress and environmentalists in general who seek to block us from drilling for oil in Alaska and other sources might be contributing to the problem, but he disagreed. Does anyone have any good information as to why oil prices have skyrocketed? It will help me in future discussions if I can obtain some solid information. Thanks!

 

[jfschultz]

Another factor is our lifestyle that results in a relatively inflexible demand curve. Specifically, there is relatively little optional driving that can be eliminated to reduce the gas we use as the price goes up. This impacts the law of supply and demand. When supplies do get short so the price goes up, there is little change in the demand for gas, so when supplies get better there is little incentive to bring the prices back down.

What does it take to really reduce the demand side of the equation? How much does the price of gas need to go up for people to dump SUVs for more efficient cars? How much does the price of gas need to go up for people to sell their homes so they can move closer to work?

[Edited on 10-11-2004 by jfschultz]

 

[dkicklig]

Another factor is that a new oil refinery has not been built in over 20 years because of environmental laws. Oil companies can't refine any more oil than they are already putting out. Basic supply and demand problem.

 

[crhoades]

One way to reduce the price of gasoline is to take off the approximately $.40 tax per gallon. If you're going to tax me, tax me. But don't hide it in 100 different places to make me feel better. The government should raise taxes to over 50% so it would anger enough people to do something about it!

 

[govols]

Originally posted by crhoades
One way to reduce the price of gasoline is to take off the approximately $.40 tax per gallon. If you're going to tax me, tax me. But don't hide it in 100 different places to make me feel better. The government should raise taxes to over 50% so it would anger enough people to do something about it!

Let's go with the Flat Tax and eliminate the hidden taxes and just tax consumption.

 

[Puritan Sailor]

Another contributing factor to higher prices is that the Middle East Oil producers have to use more security personel and equipment now to prevent terrorist attacks on their wells and refineries, which raises the cost.

 

[RamistThomist]

Originally posted by crhoades
One way to reduce the price of gasoline is to take off the approximately $.40 tax per gallon. If you're going to tax me, tax me. But don't hide it in 100 different places to make me feel better. The government should raise taxes to over 50% so it would anger enough people to do something about it!

If they won't do that, they should at least post the tax by the regular price just so we can know how much we are contributing. That would make changes.

 

[VirginiaHuguenot]

Lots of good responses. Thanks!

Another point that has always puzzled me...why do gas prices always end in .9 cents????

 

[RamistThomist]

Originally posted by VirginiaHuguenot
Lots of good responses. Thanks!

Another point that has always puzzled me...why do gas prices always end in .9 cents????

It makes it look cheaper than it really is, yet one is always able to round up. I worked at a gas station for 7 years.

 

[Puritan Sailor]

Originally posted by Finn McCool

Originally posted by crhoades
One way to reduce the price of gasoline is to take off the approximately $.40 tax per gallon. If you're going to tax me, tax me. But don't hide it in 100 different places to make me feel better. The government should raise taxes to over 50% so it would anger enough people to do something about it!

If they won't do that, they should at least post the tax by the regular price just so we can know how much we are contributing. That would make changes.

I've seen some gas stations do that actually.

[Edited on 11-11-2004 by puritansailor]