The last stock market quote on wholesale gas was $2.77 a gal.. This was this last Friday. At the gas pump price plus taxes is what we are paying for. When I was filling up our car the other day I was talking to a person on the other side of the pump about gas prices. We both agreed if the gas would go down just to $3.00 a gal. and stay there it would cause the economy to go up. But every time the economy starts getting hot the price of oil goes up and puts a halt to ecomony. Here in NW PA its at $3.59 a gal. now. Glander is right on oil is sold as a commodity. It is the speculative buying of it that causes it to go up. Totally ADD
A question for the economist, roll back the gas prices.
OK, I'll bite.
You can't regulate the price of gas to 2.00 a gallon because the demand for gasoline is way more than 2.00 a gallon. The supply of gasoline in the world doesn't garner a 2.00 gas price. If a product is sold at a price that's markedly below demand, people start hoarding and selling the product at a marked up price on the black or gray market and make a profit. Eventually, the main supply runs out due to the hoarding on the black or gray market and the price goes up as the main supply can no longer support prices at markedly below market prices because demand will eventually outstrip supply and then the price skyrockets.
You want 2.00 gasoline? Beg your local congressman to start drilling in America. The threat of drilling alone would send gas prices plummeting.
An even better proposition: What about destroying ALL regulations that make it more difficult or dangerous to start your own business? That would force companies to pay more (or face all their employees starting their own businesses and driving prices down). It would also give disgruntled employees and applicants that are denied interviews or jobs the opportunity to strike back at the company without breaking the law--and possibly help take a nibble out of unemployment.
As for excessive pollution--that is waste. You pollute, someone else could use that pollution as a raw material for another product. Toss cadmium, mercury, uranium, lead, or other toxic metals into the environment, you are throwing away money. The businesses that can capture such pollution and sell it as raw materials for other products, while maintaining their own businesses, are the ones that are going to do the best. And, if those companies evolve into abusive tyrants, some other abused employee will do to them what they did to their own parents--start yet another business to put the parent out of business.
Result: Wages that actually keep up with prices. Prices that actually go down as more wealth is placed on the market. And Bernanke will have a miserable time generating enough inflation to keep up.
Of course, we will never see it.
In order to remain profitable, the Alberta Tar sands has to sell a barrel of oil for $80 bucks. Much of Alberta oil goes to the US. If it drops below $80, they will curtail production. In order for gas to reach $ 2 per gallon, it would have to drop to near half that. The only thing that would cause that would be a worldwide decrease in demand, or a depression which would cut costs and wages in half. In other words, it's not going to happen. A Depression is quite ugly.
Price fixing = shortages. Just look at any command economy that sets or subsidizes low prices. They have constant shortages, have to give out ration tickets, etc. This had already been tested in the US by the way in the 70's. When OPEC lowered oil supply, the US instituted price controls instead of letting supply/demand dictate the price. The result was long gas lines, shortages, you only had certain days you could buy gas, etc.
So your choice is 2.00 gas that you will be lucky to find because it's sold out as soon as it gets to the station, or paying 3.60 a gallon and having access anytime you want it. It's not really a hard decision. Price controls do not work.
Rep. Phil Roe(R-Tenn). Today we,re suffering because
for so long we haven,t had A national energy policy.
While there,s no quick fix, we must lift harmful regulations
contributing to the rise in cost and allow more domestic
gas and oil production. This will move us toward energy
independence and ensure these prices are not A permanent
He mention "harmful regulations". Are these the regulations
mandated by environmentalist, is this the problem, the reason
why we can not move toward independence. If so we are
between A rock and A hard place.