OT: Re: katrina ...

[Michael Hipp]

Ronnie Gauthier wrote:
> I live next door to a station. On the other side of me is a used car 
> lot then another station, then a street and another station. None has had a 
> tanker in the last four days yet their gas jumped from 2.48 to 3.19,
> who is doing who??? Stations take advantage of rising prices to gouge, 
> plain and simple, nothing else.

It's not that simple.

I have a close friend that owns a Shell station here. He says they have no way 
to know what their next load of fuel will cost so all they do is follow 
Wal-Mart's posted prices. Figuring that since WM owns their own oil company, 
they probably have the best intelligence as to what is going to happen.

So prices go up ahead of the cost. But the same happens on the way down. As 
soon as one station gets a cheaper load of fuel and lowers its price, they all 
must do so and so they are selling that expensive load in the tanks now too 
cheaply. It cuts both ways.

Price gouging is against the law and companies occasionally get prosecuted for it.

But prices are market driven, not cost driven. It is that way for most all 
things, for better or worse.

But if we want to play the blame game, let us observe to what extent any 
significant percentage of Americans have altered their behavior in response to 
the high prices or the short supply. Answer: very few and very little. If 
people will pay $3.00 or twice that for a gallon of petrol is there truly any 
reason for companies not to charge that? It is neither illegal nor immoral. 
"Charge what the market will bear." Competitive pressures are what bring 
prices down. Demand in relation to supply is what drives prices up.

So the greedy consumers are as much to blame as the greedy business owners. 
That's you and me.

Michael