$2.99 a gal.
.....for the cheap stuff. That's all I use....the cheap stuff. Yesterday I pumped what I think will be the last of gas priced under $3 bucks a gallon for quite some time to come....possibly forever.
It got this high for a while but then when elections happened they had to lower it so the governor could be re-elected. It was inevitable prices would soar again when the politicians felt comfortable.
The news credits refinery problems and demand for the spike.....never avarice....never keen political planning. The people see through it.
Like stamps I wish the price would be determined for a set period of time. Raise it to $5 a gallon and don't touch it for 5 years. I would stand behind that. I could feel comfortable knowing the price has a structure I could anticipate. People would complain though. Lots of folks think we shouldn't be spending the money we do for fuel. Gasoline really is expensive though and it isn't fair for the government to shield us away from the true cost.
Maybe that's it.....maybe the government needs to get out of the fuel business altogether and we will pay for fuel what it really costs.....does anyone know what it really costs?
I meant in dollars....not gallons of blood.
posted by el Craplastico | 12:51:00 PM
1 Comments:
Gasoline Economics 101
The demand for gasoline is inelastic in the short run. That is, it takes a large increase in price to reduce consumer demand even a little in the near term. Economists calculate that short-term price elasticity for gasoline is about -0.05. That is, if prices go up 1 percent, consumer demand will decrease in the short term by only one-twentieth of 1 percent.
Accordingly, when the demand for gasoline outstrips the available supply (even by just a little), prices have to go up a lot in order to keep the gasoline pumps from literally running dry. Thus, if local gasoline supplies are 2-3 percent below where they need to be to meet unmoderated consumer demand - the figure most market analysts believe to be correct for the Milwaukee/Chicago area - price would have to jump by more than 50 percent in order to prevent spot shortages.
Prices, remember, are used to allocate scarce goods. Although demand for gasoline is far more elastic in the long run, in the short run, small disparities in supply and demand (in either direction) will always by necessity have a large impact on prices.
Thus, we know all we need to know to explain the supposed mystery of retail gasoline prices in the Milwaukee/Chicago area. OPEC production cutbacks and surging world oil demand have driven the price of oil from around $10 a barrel in the winter of 1998/99 to around $30 a barrel today, adding 50-60 cents to the price of gasoline per gallon. Pipeline ruptures and production shortfalls have further reduced Milwaukee/Chicago supplies by 2-3 percent, which -- given the inelasticities of demand - explains the 50 cent difference between peak regional gasoline prices and national average gasoline prices.
http://www.cato.org/testimony/ct-jt070600.html
Post a Comment
<< Home