Quote:
Originally Posted by Ducimus
Personaly, im amazed it hadn't hit 5 yet. If i remember correctly It hit 4 dollars already a few years back. Or at least it seemed to. I tend to round upwards with my expenditures and round down my income.
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A wise policy. However, even five dollars to the gallon is a steal compared to what our forward-thinking friends in Europe pay, especially given their ownership
of and proximity
to oil they actually use as opposed to the US. As far as I can tell, the only European country benefitting from oil policy is Norway, which foolishly has half its GNP tied up in oil alone. Better hope they don't run out.
Quote:
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Originally Posted by Ducimus
Oil companies can pretty much charge whatever they want, and we'll pay it. We always do. It's not like we have a choice.
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That's the popular theory, but it is incorrect. Even with our heavy dependence upon oil and our comparitive (although still far too heavy, imo) lack of macroeconomic regulation in the petroleum industry, the US consumer is far from being as exploitable as you might suppose. It is correct to say that the price of fuel as a percentage of personal income has increased. It is also correct to say that the oil industry can charge us more than what most of us would consider a "fair" price in the short-term. It is incorrect to say that oil companies can charge whatever they want, and I don't mean that in the sense of semantic hair-splitting.
If you will recall, this is not the first time gas prices have risen sharply. Don't take my word for it, though. Ask the US auto industry. Their business model was all but destroyed by increases in fuel prices. The evidence of the preparedness of the American consumer to adapt and overcome is all around you. People drive lighter cars with smaller engines. They carpool. They make fewer trips. They price-hunt for the cheapest gas; something which most successful fuel-station chains have used to their advantage by offering gas for less than a cent on the dollar (or even a negative profit) whilst offering overpriced "conveniences" of almost every variety to make up for the lack of profit.
People have even gone so far as to demand alternative energy or energy "policies" from the government. The proof of that is all around you as well. At least 10% of your gasoline is corn-ethanol, despite the fact that corn-ethanol contains water (which is bad for your engine), is less efficient than gasoline, and is extremely expensive to produce in terms of land requirements and capital. People buy subsidized "hybrid" cars. Billions upon billions of taxpayer dollars have been thrown at the problem of solving consumer discontent with the price of fuel with a layer of environmental feel-goodness thrown on top by those willing to provide such peace of mind for a small fee. Though I disagree with most of the measures in the last paragraph, they serve as an adequate gauge of the determination of the US populace to rein in fuel prices.
Oil companies know all this and more. They have legions of well-compensated and often well-motivated employees working to understand these factors every day. They also employ regiments of lobbyists to ensure their competitive viability when consumers call the government in. Rather than an agency for regulation, the government becomes just another battlefield, save that we don't have a vote.
What oil companies are doing is charging what yields the most profitability. You can't blame them for that. Their investors expect it of them. When was the last time anyone here stole money from their boss to donate to charity? When was the last time anyone here took a pay cut to allow someone else to donate to an unspecified charity? When was the last time anyone here paid someone for costing them money, friends/relatives aside? Probably never. Most companies have about the same level of morality, or amorality, however one wants to describe it.
All that said, we in the US generally enjoy considerably lower fuel prices than our forward-thinking betters across the pond, so which is to blame? Is it the market, or the state?