StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Higher Gasoline Prices...Why Were You Expecting Anything Else?

10 Sep 2007
Posted by Stan Collender

News reports this morning said that the price per gallon for regular gasoline had risen 6 cents in the past two weeks.

 

I like low prices on things I buy as much as anyone, but here's the most basic question no one ever seems to ask when discussing energy prices: If consumers keep paying higher prices for gasoline, why should the oil companies do anything other than raise them?

 

Prices will stop rising when consumers refuse to pay them.  That's hard when you've moved to the burbs, have to drive to work every day, and don't have mass transit alternatives.  It's also hard when few acceptable alternative fuels exist.  But until consumers seriously start changing their buying habits, prices should not be expected to do anything but at least stay at current levels.

 

If you were an oil company executive who had to show quarterly profits, and you knew that at some point there will be an alternative to oil, (and if you were only going to be in your job for a few years), wouldn't you be raising prices now while you had the chance?

It's interesting to note

It's interesting to note that prices keep going up (and come down occasionally), but this message seems more glib than usual.  I think this blog works better when it sounds more like Stan and less like Kos.

Nice job on the blog overall.  It could use a feature where you could click to the next or previous post from inside a post, instead of having to return to a main page.  I'd also like to see where SEC gets his news: what are your favorite links?  Where do you get your news?  What are the best financial/government/fiscal policy links out there?


A recent national poll

A recent national poll (can't recall which one) found that most believe a Democrat president would be more successful at lowering gas prices.  Helps explain why rent-seeking  in the alternative-energy space is so successful.


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