Hmmmm you mean a 15% increase in oil barrel prices...

Pherr the Dorf · Post by **Pherr the Dorf** » September 9, 2003, 10:53 am

Doesn't mean a 75% increase in gas prices?
http://sfgate.com/cgi-bin/article.cgi?f ... N96612.DTL

I have seen this coming for awhile now, we have been getting raped

Pahreyia · Post by **Pahreyia** » September 9, 2003, 11:14 am

This is about the only reason I'm pleased that I totalled my truck 3 months ago and went to a bike instead.

Skogen · Post by **Skogen** » September 9, 2003, 11:35 am

/em loves his Honda Civic!

I am laughing my ass off at those assholes who bought a Ford Excursion or Cadillac Escalade.

Someone please tell me why you need a vehicle that fucking big in some place like LA? If its carting around the kids, get a minivan. Carrying stuff? Get a truck.
Got a small penis? Get an Excursion.

Chmee · Post by **Chmee** » September 9, 2003, 12:14 pm

Lynne Kiesling has some good comments on this, its worth a read.

http://knowledgeproblem.blogspot.com/20 ... 5735264107

As she points out,

Okay, let's review. In the last two weeks of August we had

1. a burst pipeline in Arizona
2. six refineries out of service for up to a week because of the blackout
3. an impending Labor Day holiday

These all can contribute to an increased price through reduced supply or increased demand. Also keep in mind that the gas market in the United States is "balkanized", meaning the epa specifies various formulations of gasoline for different markets during different parts of the year to try to help meet clean air targets. This means a shortage in a particular area is not always as easy to make up since the number of refineries making that type of formulation at that time may be relatively limited. Reduced supply will be reflected in higher prices, just like with pretty much any product.

P.S.

Gasoline prices are still not that high historically when inflation is taken into account.

Skogen · Post by **Skogen** » September 9, 2003, 12:17 pm

Chmee wrote: Gasoline prices are still not that high historically when inflation is taken into account.

I don't believe it.
What is the inflation rate atm?

Chmee · Post by **Chmee** » September 9, 2003, 12:25 pm

http://www.howstuffworks.com/gas-price1.htm

Historical Gas Prices*

1950 - $1.91 per gallon
1955 - $1.85
1960 - $1.79
1965 - $1.68
1970 - $1.59
1975 - $1.80
1980 - $2.59
1985 - $1.90
1990 - $1.51
1995 - $1.28
2001 - $1.66

*prices adjusted for inflation
Source: U.S. DOE

At one point I had a link to the source information from the DOE, if I find it at some point I'll try to remember to post it, but what I remember from it this is pretty much in line with what was there.

Forthe · Post by **Forthe** » September 9, 2003, 12:31 pm

Chmee wrote:http://www.howstuffworks.com/gas-price1.htm

Historical Gas Prices*

1950 - $1.91 per gallon
1955 - $1.85
1960 - $1.79
1965 - $1.68
1970 - $1.59
1975 - $1.80
1980 - $2.59
1985 - $1.90
1990 - $1.51
1995 - $1.28
2001 - $1.66

*prices adjusted for inflation
Source: U.S. DOE

At one point I had a link to the source information from the DOE, if I find it at some point I'll try to remember to post it, but what I remember from it this is pretty much in line with what was there.

Now do the same adjustment for cost of production if you want more than half the story.

Chmee · Post by **Chmee** » September 9, 2003, 3:16 pm

Now do the same adjustment for cost of production if you want more than half the story.

Depends on which story you are looking for. My comment about gas prices was really just an aside to show that the prices we are seeing today aren't that alarming when you look at them historically.

As I mentioned earlier, there are valid reasons as to why the supply of gasoline in California may be currently reduced. When supplies are reduced, prices rise. Yes, this potentially means more profits for the companies. But what happens if the price isn't allowed to rise? Say they decide to stick a price cap on gas. This doesn't change the fact that you have a reduced supply. So either you risk having shortages, or you have to ration. Its more efficient economically to just let the price rise and people will respond by reducing consumption. Its a more effective distribution towards high-need use than the haphazard distribution that shortages or rationing would result in.

Kiesling Probably said it better in the post I linked to:

First, how does one define price gouging? Is it charging what consumers are willing to pay? If so, then what is the alternative that the politicians propose -- price caps? The consequences of price caps are well known, and I pose the following question to our representatives: would you prefer the ire of constituents who have to pay more for gasoline, or the ire of constituents who have to stand in line for an hour to buy gasoline because there isn't enough available at the capped price? You face a choice, and history has shown us repeatedly that using price to prioritize higher-value uses of goods and services is a far more efficient, flexible, and I would argue fair way of doing things than through political regulation motivated by populist demagoguery.