Big Oil: Lies, damned lies and gas shortages.

As the debate over gas prices rages, I am consistently amazed at two things:

  1. The Left, who apparently believe that the problem can be solved by raising taxes, and
  2. The Right, who keep on blathering on about the free market, supply and demand, etc.

I am not even going to dignify the left with a reply, except to say that one of the reasons that gas is so expensive is that Federal and State Governments are already taxing the living daylights out of it! Both make more money on a gallon of gas than the oil companies. Stupid, stupid stupid.

As for the right, let’s take a look at this alleged free market, shall we?

  • Shortages? What shortages? There is either enough to go round or there isn’t, and yet every Summer, Thanksgiving, Christmas and whenever the circus comes to town, there is a spike in demand. Year after year, the oil industry somehow fails to spot this coming… then they cry “shortage” and spike the price. Moral: Unless filling stations or pumps are closing there are no “shortages”!
  • Where is the free market when all of the filling stations in the land are owned, run or controlled by a handful of companies?
  • Why are gas stations bouncing the price around as frequently as several times a day? Are they selling the fuel they have in their tanks, or are they speculating on oil futures? Are we paying for today’s petrol or next week’s?
  • Where is the free market when every gas station in town spikes to the same price at the same time?
  • Why is it that gas goes up in 25c jumps, but than comes down pennies at a time?
  • If there is no gouging going on, why is that gas prices drop at the pump whenever there is a threat of a Government-level investigation?
  • Why is gas cheaper in poor parts of town, and near the local Sam’s Club? Is the law of supply and demand somehow different there?
  • Do ANY of the major oil companies EVER post a quarterly loss (a real one – not a manufactured tax dodge)? If not, again where is the competition?

I am against Government regulation, but it is also true that companies enjoying a monopoly or oligopoly cannot be trusted not to rape the public. This is why power, heating and Telcos are regulated – why should fuel not be? Can you function without it? I am playing Devil’s advocate here, but I suspect that the mere threat of Government regulation WILL bring prices down… which means that Big Oil can do better, and we all know it.

Not long ago, I asked a fuel station worker why the price had spiked. The conversation went something like this…

The station down the road put their price up, so we had to put ours up too.
Then you’d better call 911
If you had to raise the price than they must have put a gun to your head or threaten you, right?
What you mean is “we raised the price because we can
Uh… yeah.

What we are seeing at the moment is NOT competition – it is a lack if it.

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