OT: katrina ...

[Tom Wilson]

On Fri, 2005-09-02 at 09:39, Michael Hipp wrote:
> 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.

Except that when they raise prices it is a significant order of
magnitude more than when they lower it.  

The price of a barrel of oil on the market goes up a dollar, the price
of a gallon of gas goes up $.15.  The price of a barrel of oil falls $5
the price of a gallon of gas goes down $.05 if that much.   Go figure.

> 
> 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.

Don't forget the investors who panic every time a Saudi farts and sends
the oil prices rocketing on the futures market.  


Tom Wilson 
McSwain Carpets 
513.771.1400 x4433 
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