Presidential Gas

The President does not control gas prices. We’ve experienced a spike in prices due, in part, to Hurricane Isaac’s negative impact on production from the Gulf of Mexico last week.

According to Chevron

“The marketplace forces of supply and demand determine the price of fuel. If demand grows or if a disruption in supply occurs, there will be upward pressure on prices. By the same token, if demand falls or there is an oversupply of product in the market, there will be downward pressure on prices.

Those principles apply at the service station level as well. If a retailer prices its gasoline too high, and without regard to competition, the retailer’s customers may take their business to another station with lower prices. If a retailer loses enough volume, the retailer may then reduce prices in order to retain its customers.

Competition among retail outlets thus affects pricing. You may notice that sometimes there are price differences between two gasoline stations on a busy street corner and between those outlets and the only station on a long stretch of highway. More choices generally mean more competition for business.

And although retail outlets may sell gasoline carrying the brand of a major oil company, most dealerships are owned and operated by independent business people who are free to set the prices for their products and services.”

Elevated gas prices are the result of good, old-fashioned, capitalism.

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About elroyjones

Married, no children, responsibly self-directed, living happily.
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10 Responses to Presidential Gas

  1. Ray Colon says:

    This one always makes me shake my head. Whenever there’s a spike in gas prices, voices rise up to blame it on The President. (Presidential Gas – I like that.) The market forces you wrote of are ignored. “Release the strategic reserve!” The fact that doing so would have little to no impact on prices at the pump doesn’t lessen the din.

  2. gkinnard says:

    You’re right as rain!

    • elroyjones says:

      It drives me nuts to hear people suggest that one man has so much control. I’ve read and heard that oil dependence, alternative energy blah, blah, blah. Four years is not long enough to wean the wasteful American consumer from petroleum. It’s an expensive undertaking in a time when cash is thin. Oh my achin’ ass!

  3. judithatwood says:

    Of course, if you are a billionaire right wing reactionary, you can still afford the gas if the prices go up. My, my, my. Capitalism at its ugliest. Or maybe I am just in a pissy mood tonight -=- Who Knows!

  4. The problem is you can’t have a rational conversation with people who do not believe in evolution, or global warming, or pregnancy caused by rape, or that Obama is not a Muslim socialist.

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