Soaring Gas Prices

[SoyLeche]

You got mad because you said that she didn't mention summer time prices and I showed you where she clearly did. Deal with it. :foot:

I said she didn't mention summertime prices in post #110. She didn't. Read it again - it has nothing to do with summertime. It is about general trends. Check out the Federal Highway Administration website and see if you can find the trends.

 

[SoyLeche]

Read post #138

Read post #101 and then post #110

 

[Aqualung]

Wow, this debate got funny.

Yes, I mentioned summer time prices. But then, when I determined it wasn't about summer time prices, I refined it and posted about six or seven links to charts and articles that detailed the overall rise in demand for gas prices. So, while (as Mr T has corroborated) it's going up NOW because of summertime prices, these summer time prices are higher than last year because of overall trends (backed up by those links) of rising demand for petrol.

 

[Mister_T]

I said she didn't mention summertime prices in post #110. She didn't. Read it again - it has nothing to do with summertime. It is about general trends. Check out the Federal Highway Administration website and see if you can find the trends.

I never said she did say that in #110.

She said I never responded to her original question about supply and demand, which was about summer time inflation, which I then responded to. Read that again: The post you quoted me on was a respone to her original post about summertime inflation.

You made a comment without reading the conversation in it's entierity .

It's ok man. Happens to the best of us.

 

[Mister_T]

Wow, this debate got funny.

Yes, I mentioned summer time prices. But then, when I determined it wasn't about summer time prices, I refined it and posted about six or seven links to charts and articles that detailed the overall rise in demand for gas prices. So, while (as Mr T has corroborated) it's going up NOW because of summertime prices, these summer time prices are higher than last year because of overall trends (backed up by those links) of rising demand for petrol.

Yes, let's get back on track.

There's one link regardng automobile ownership in the San Francisco Bay Area, and the other two regarding the demand for oil for various uses, having automobiles being the most demanding. The other three are regarding summer time supply and demand and since we are in agreement about that, I will not address it unless you feel the need to.

Now, I won't deny the increase for demand, especially considering the popularity of SUV's. My only problem with that is the increase for demand has been gradual and was increasing well before 2004. While these things do contribute to inflation, I don't see these factors being a major cause in the sudden, sharp, increases we've been seeing these past three years.

I'd being interested in seeing charts from more recently to see what the trend is now.

 

[Aqualung]

Yes, let's get back on track.

There's one link regardng automobile ownership in the San Francisco Bay Area,

It also gave numbers for cars in the US, giving credence to my claim that demand for petrol is increasing (since petrol and cars are complimentary goods, if the consumption of one goes up, the demand for the other will go up).

The other three are regarding summer time supply and demand and since we are in agreement about that, I will not address it unless you feel the need to.

Sounds good to me.

Now, I won't deny the increase for demand, especially considering the demand for SUV's. My only problem with that is the increase for demand has been gradual and was increasing well before 2004. While these things do contribute to inflation, I don't these factors being a major cause in the sudden, sharp, increases we've been seeing these past three years.

Why not? What evidence do you have that there are other reasons? What evidence do you have that it cannot just be chauked up to supply and demand? Or in other words, why do you think that supply and demand is not a good consideration, especially considering that the demand has gone up and gas prices have gone up, and in summer months we both agree that demand has been causing the rise in gas prices?

I'd being interested in seeing charts from more recently to see what the trend is now.

Me too.

 

[Mister_T]

It also gave numbers for cars in the US, giving credence to my claim that demand for petrol is increasing (since petrol and cars are complimentary goods, if the consumption of one goes up, the demand for the other will go up).

And I don't disagree with you there.

Why not? What evidence do you have that there are other reasons? What evidence do you have that it cannot just be chauked up to supply and demand? Or in other words, why do you think that supply and demand is not a good consideration, especially considering that the demand has gone up and gas prices have gone up, and in summer months we both agree that demand has been causing the rise in gas prices?

The reason I don't buy the supply and demand argument is because the demand for cars has not increased as sharply as the price for gasoline from what I can see.

From all of the articles I've read and news reports I hear, the main "cause" for this surge in prices is refinery issues, not supply and demand. That is the explanation that is being given.

http://seattletimes.nwsource.com/html/editorialsopinion/2003684210_gased30.html

http://www.cbc.ca/canada/edmonton/story/2007/05/02/gas-prices.html?ref=rss#skip300x250 This one touches upon supply and demand.

This one again http://www.newsday.com/news/local/longisland/am-gas0507,0,1471721.story?track=rss

 

[Mister_T]

I would also like to see one of these probe reports that shows us in detail where these year after year record profits are coming from, as well as how they are being distributed, once these probes are complete.

 

[Aqualung]

And I don't disagree with you there.

The reason I don't buy the supply and demand argument is because the demand for cars has not increased as sharply as the price for gasoline from what I can see.

But the demand for gas has supported the rise in prices. If the gas companies can increase the price and still have people buy their products, market law says they will. Creating price ceilings dictates that it's not those who more highly demand gas who will receive it, but those lucky enough to get their first. By allowing the price of gas to rise to a price that the demand still supports is good. Look at england. I think it was terrywoodenpick who said that gas is about 9 dollars per gallon over there. I think the demand here could support something like that. But, if gas companies raise their price too high too quickly after the price ceilings of the late '70s, everybody will get mad. Heck, people are already getting mad, even though the prices set are way below those in some countries. Therefore, the price of gas must rise more slowly than it probably could based on demand, but still more quickly than it has done in the past (notwithstanding the relatively constant rise in gas demand). It was rising artifically slowly at first - now it is still raising artificially slowly, but less artificially slowly than in the past.

From all of the articles I've read and news reports I hear, the main "cause" for this surge in prices is refinery issues, not supply and demand. That is the explanation that is being given.

http://seattletimes.nwsource.com/html/editorialsopinion/2003684210_gased30.html

http://www.cbc.ca/canada/edmonton/story/2007/05/02/gas-prices.html?ref=rss#skip300x250 This one touches upon supply and demand.

This one again http://www.newsday.com/news/local/longisland/am-gas0507,0,1471721.story?track=rss

Thanks for posting links. I'll get to them in a bit.

 

[Mister_T]

But the demand for gas has supported the rise in prices. If the gas companies can increase the price and still have people buy their products, market law says they will.

I don't feel the demand is strong enough for these sharp increases. They make a product that has no alternative and will charge whatever price they feel like, knowing that there's no were else to turn. They're squeezing as much money out of people as they can and will continue to do so. Until I see a detailed explanation of where their record profits come from and how it's distributed, I feel there is evidence for that.

Look at england. I think it was terrywoodenpick who said that gas is about 9 dollars per gallon over there. I think the demand here could support something like that. But, if gas companies raise their price too high too quickly after the price ceilings of the late '70s, everybody will get mad. Heck, people are already getting mad, even though the prices set are way below those in some countries.

England also has the option of mass transit widely available. I don't know what it's like in Washington, but in L.A. mass transit isn't really an option.

 

[SoyLeche]

They make a product that has no alternative and will charge whatever price they feel like, knowing that there's no were else to turn.

Not true. They can charge more than they could under perfect competition, but they can't charge whatever they want. And there are other places to turn, it's just that nobody bothers because gas is still so cheap.

 

[SoyLeche]

I would also like to see one of these probe reports that shows us in detail where these year after year record profits are coming from, as well as how they are being distributed, once these probes are complete.

It may well be in the annual report I provided a link to earlier. See what you can find.

 

[Aqualung]

I don't feel the demand is strong enough for these sharp increases.

If the demand weren't strong enough, people would stop buying gas and they would lower their prices or stop selling it all together. Since neither of these two things have happened, people must still be buying gas, which means that the demand IS strong enough.

They make a product that has no alternative and will charge whatever price they feel like, knowing that there's no were else to turn.

Not true.

Even if it WERE a monopoly, they wouldn't be able to do that. this econ site and this one explain the economy of monopolies and why they can't possibly do that.

But, that only works if they are monopolies, and they're not. People can buy more fuel efficient cars, carpool, ride the bus/train, bike, or walk. Heck, I don't even have a car, and I get along fine. There are plenty of ways to decrease your demand for gas.

They're squeezing as much money out of people as they can and will continue to do so.

Exactly. But the thing is, this only works if people let them. People aren't being forced to buy gas.

England also has the option of mass transit widely available. I don't know what it's like in Washington, but in L.A. mass transit isn't really an option.

It looks like it is an option

 

[SoyLeche]

From all of the articles I've read and news reports I hear, the main "cause" for this surge in prices is refinery issues, not supply and demand. That is the explanation that is being given.

The main "theory" for the "cause" is refinery issues, and it is probably the case. You still have to show that the oil companies are purposely ignoring the issues though.

From your links:

Attorney General Rob McKenna says the state has no evidence now of price fixing but will be on the lookout as it studies gas prices and the markets in nine areas around the state.

In 1991, the state conducted a study that found no price-fixing, but different pricing in different parts of the state. That report lists eight main reasons why prices differ, ranging from the cost of transporting gas from refineries to different stations, to whether the gas is supplied directly from an oil company or through a distributor, to how close the station is to the Canadian border.

 

[Mister_T]

Not true. They can charge more than they could under perfect competition, but they can't charge whatever they want. And there are other places to turn, it's just that nobody bothers because gas is still so cheap.

Sure does seem that way at times. We'll see if electric cars and and hydrogen cars are able to provide a decent alternative in the future.

 

[Mister_T]

If the demand weren't strong enough, people would stop buying gas and they would lower their prices or stop selling it all together. Since neither of these two things have happened, people must still be buying gas, which means that the demand IS strong enough.

Maybe I should rephrase. The demand does not justify the sharpe prices.

But, that only works if they are monopolies, and they're not. People can buy more fuel efficient cars, carpool, ride the bus/train, bike, or walk. Heck, I don't even have a car, and I get along fine. There are plenty of ways to decrease your demand for gas.

I disagree. If you drive a car, you have to buy gas. You have no real alternative. And buses, trains walking and bikes are not feasable for everybody.

Exactly. But the thing is, this only works if people let them. People aren't being forced to buy gas

Again, I disagree. If you people need cars and thus are forced to buy gas.

It looks like it is an option

Sure it's an option if you've got four hours to kill and only want to get to certain parts of L.A. The city of Los Angeles is huge.

 

[SoyLeche]

Sure does seem that way at times. We'll see if electric cars and and hydrogen cars are able to provide a decent alternative in the future.

They will, or something else will. Rising oil prices will only make that happen quicker.

 

[Mister_T]

The main "theory" for the "cause" is refinery issues, and it is probably the case. You still have to show that the oil companies are purposely ignoring the issues though.

And for the millionth time, refineries not being fixed is my evidence. Your refusal to accept that as evidence is your problem if you find that unsatisfactory. Show me where they are taking action to do something. Proove me wrong. Or, we can continue going in circles.

 

[Aqualung]

Maybe I should rephrase. The demand does not justify the sharpe prices.

Yeah, it does. If demand didn't set prices, it would create huge shortages. Here's why:

If prices weren't as high as demand could allow, it would mean that people who valued a product highly and a person who valued it not very much at all would both be equal competitors for it. For example, if blu-ray DVD burnders for my computer costed five dollars, I would buy one, even though I don't need one (heck, I've never even burned a real DVD, let alone a bluray one). On the other hand, there is probably somebody who really wants the DVD burner and would be willing to pay the market price (about 600 dollars). Now this one item has two potential consumers, even though one person values this product way more than the other. So, there would be way more people vying for limited resources. Add to that the fact that if companies can't charge what they feel is reasonable, they won't sell as many products. This will exacerbate the shortages caused by the artificially high demand.

"Although the price ceiling may have been intended to benefit the consumers, they will actually end up consuming less of the good in question."

http://www.csun.edu/~dgw61315/aboutecon.html#Prices and Price Controls

I disagree. If you drive a car, you have to buy gas.

Yeah, you have no real alternatives IF YOU DRIVE A CAR. It's like saying, "If you eat peanut butter and jelly sandwiches, you have to eat peanut butter." BUt that doesn't mean there are no alternatives to peanut butter and jelly. So, yeah, if you drive a car, you will have to use gas (although you determine the amount of gas you use, and therefore your demand) but you don't have to drive a car in the first place.

You have no real alternative. And buses, trains walking and bikes are not feasable for everybody.

Then their demand for gas is probably pretty high.

Sure it's an option if you've got four hours to kill and only want to get to certain parts of L.A. The city of Los Angeles is huge.

Yeah, so are the bus routes. And I'm pretty sure they have sidewalks. And I'm pretty sure it takes a considerable amount of time to drive there, too.

By buying gas you are buying convenience. So are you changing your argument to the idea that there are no CONVENIENT alternatives to cars? Because that's a whole nother story.

 

[SoyLeche]

And for the millionth time, refineries not being fixed is my evidence. Your refusal to accept that as evidence is your problem if you find that unsatisfactory. Show me where they are taking action to do something. Proove me wrong. Or, we can continue going in circles.

You have claimed a million times that they are not being fixed. You have not provided convincing evidence of it though.

Are the same refineries having problems today that were last year, or have the ones from last year been fixed and new ones falling apart. How much does it cost to fix them? Is it worth the cost?