GAS PRICES!!!!
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GAS PRICES!!!!
| Wed, 08-31-2005 - 1:14pm |
Gas prices here in Baltimore are at about 2.85. The guy at the gas station this morning said they will go up 15-30 cents by the end of the day.
Isn't this a little unnecessary since the gas currently at the stations is already delivered and paid for? What is really irritating to me is that the government has trillions to spend on studies, projects, drug treatment, etc, but they can't help out the working class on the hike in gas and the resulting hikes in groceries, etc. Pretty soon, I won't be able to afford to drive. Yet the prisoners in Baltimore city will still have three meals a day, cable t.v., and cash in hand when they get out of jail for housing, food, and clothing.
Is there a website yet for donations to LA residents? I would like to help if I can. As crappy as all this is, I guess we should all count our blessings for waking up with our families in tact this morning. Debt is NOT the end of our world.
Sorry for my ranting......
Isn't this a little unnecessary since the gas currently at the stations is already delivered and paid for? What is really irritating to me is that the government has trillions to spend on studies, projects, drug treatment, etc, but they can't help out the working class on the hike in gas and the resulting hikes in groceries, etc. Pretty soon, I won't be able to afford to drive. Yet the prisoners in Baltimore city will still have three meals a day, cable t.v., and cash in hand when they get out of jail for housing, food, and clothing.
Is there a website yet for donations to LA residents? I would like to help if I can. As crappy as all this is, I guess we should all count our blessings for waking up with our families in tact this morning. Debt is NOT the end of our world.
Sorry for my ranting......

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I paid $2.88.9 a gallon yesterday for gas. I put $25 in. DH and and I are voluntarily rationing ourselves. There are places in this country that have excelled in providing public transportation. Unfortunately most places haven't. I know it is more difficult to take a bus or train into work or to the grocery store etc, but Europeans have seemed to accept it as a way of life.
DH and I lived in Germany for three years. In that time we never drove our car downtown. We took the streetcar and buses. I wouldn't have even know how to park, or where to park in the downtown area. In the whole three years we lived there we put maybe 10,000 miles on our car. There is a big difference in Europe and maybe if we demanded an efficent public transportation system, more people would use it, we would use less gas and lessen our dependence on oil from other countries. But, until we demand it it isn't going to happen. JMHO and two cents and not trying to start an argument.
BTW, last week DH saw on a business show that one share of Delta Airlines stock was less than a gallon of gas. Made me stop and think.
Kellie
BTW, last week DH saw on a business show that one share of Delta Airlines stock was less than a gallon of gas. Made me stop and think.
I hope you were not thinking of buying airline stock.
Shannon
Oh, you make me laugh.
If I did buy airline stock, it certainly wouldn't be Delta.
I just think it's sad or even funny when you can buy stock cheaper than you can buy gas.
Kellie
Shannon
Not taxing our gas and subsidizing it are about the same thing. . .
Here's an article explaining what the US does to keep costs down for consumers (sorry it is slanted so far left, but I think it does a good job of explaining the way the govt subsidizes gas.):
The report divides the external costs of gasoline usage into five primary areas: (1) Tax Subsidization of the Oil Industry; (2) Government Program Subsidies; (3) Protection Costs Involved in Oil Shipment and Motor Vehicle Services; (4) Environmental, Health, and Social Costs of Gasoline Usage; and (5) Other Important Externalities of Motor Vehicle Use. Together, these external costs total $558.7 billion to $1.69 trillion per year, which, when added to the retail price of gasoline, result in a per gallon price of $5.60 to $15.14.
TAX SUBSIDIES
The federal government provides the oil industry with numerous tax breaks designed to ensure that domestic companies can compete with international producers and that gasoline remains cheap for American consumers. Federal tax breaks that directly benefit oil companies include: the Percentage Depletion Allowance (a subsidy of $784 million to $1 billion per year), the Nonconventional Fuel Production Credit ($769 to $900 million), immediate expensing of exploration and development costs ($200 to $255 million), the Enhanced Oil Recovery Credit ($26.3 to $100 million), foreign tax credits ($1.11 to $3.4 billion), foreign income deferrals ($183 to $318 million), and accelerated depreciation allowances ($1.0 to $4.5 billion).
Tax subsidies do not end at the federal level. The fact that most state income taxes are based on oil firms' deflated federal tax bill results in undertaxation of $125 to $323 million per year. Many states also impose fuel taxes that are lower than regular sales taxes, amounting to a subsidy of $4.8 billion per year to gasoline retailers and users. New rules under the Taxpayer Relief Act of 1997 are likely to provide the petroleum industry with additional tax subsidies of $2.07 billion per year. In total, annual tax breaks that support gasoline production and use amount to $9.1 to $17.8 billion.
PROGRAM SUBSIDIES
Government support of US petroleum producers does not end with tax breaks. Program subsidies that support the extraction, production, and use of petroleum and petroleum fuel products total $38 to $114.6 billion each year. The largest portion of this total is federal, state, and local governments' $36 to $112 billion worth of spending on the transportation infrastructure, such as the construction, maintenance, and repair of roads and bridges. Other program subsidies include funding of research and development ($200 to $220 million), export financing subsidies ($308.5 to $311.9 million), support from the Army Corps of Engineers ($253.2 to $270 million), the Department of Interior's Oil Resources Management Programs ($97 to $227 million), and government expenditures on regulatory oversight, pollution cleanup, and liability costs ($1.1 to $1.6 billion).
PROTECTION SUBSIDIES
Beyond program subsidies, governments, and thus taxpayers, subsidize a large portion of the protection services required by petroleum producers and users. Foremost among these is the cost of military protection for oil-rich regions of the world. US Defense Department spending allocated to safeguard the world's petroleum resources total some $55 to $96.3 billion per year. The Strategic Petroleum Reserve, a federal government entity designed to supplement regular oil supplies in the event of disruptions due to military conflict or natural disaster, costs taxpayers an additional $5.7 billion per year. The Coast Guard and the Department of Transportation's Maritime Administration provide other protection services totaling $566.3 million per year. Of course, local and state governments also provide protection services for oil industry companies and gasoline users. These externalized police, fire, and emergency response expenditures add up to $27.2 to $38.2 billion annually.
http://www.progress.org/2003/energy22.htm
Jessica
Whoaa . . . gas went up 40 cents a gallon while I was at work! This morning I paid $2.79 a gallon and noticed that most other places were $2.89. On the way home, they were $3.29!!! I'm glad I filled up when I did. I had half a tank, but my husband and I decided that we'll try not to go much lower than that in case gas is scarce for a bit. I am feeling stressed, but I have to tell myself not to worry about the price, just about the supply. We can eek a bit here and there out of our budget. I almost feel like I should have seen this coming and allowed for more in the gas budget, but I guess hindsight is 20/20.
OK, I took economics, but I've never been a math person. I keep hearing people say that there is "price gouging" going on. But I was under the impression that if the supply is finite and the demand is high, there is no limit to the price beyond what the richest are willing to pay. It's like people think the government just has to say, "OK, gas stations, no more charging over $2.50 a gallon," and then there will still magically be enough gas for everyone and profit margin for the gas stations. Did I get part of the supply/demand thing wrong? If thousands of people want gas and a station only has enough for a few hundred, why shouldn't it offer it at $6 a gallon? That naturally reduces the number of people trying to get it, so hopefully the demand will decrease to match the limited supply (right Dr. Wight?). I don't think it's unethical to price something at what the market will bear. Scary, yes. Frustrating, yes. But I don't think unethical and certainly not illegal.
"I know it is more difficult to take a bus or train into work or to the grocery store etc, but Europeans have seemed to accept it as a way of life."
Europeans don't have to make ita way of life, as pubic transportation is so abundant.
We're at $3.05 here in western Missouri today. :(
In regards to your price gouging question and supply and demand...it depends how technical you want to be, maybe.
Yes, there is a finite amount of fuel, BUT, there IS enough for everyone. In other words, if you have a thousand people who want gas, and enough for 100 people....you technically have a higher demand then you do supply. BUT...tomorrow you'll have fuel for 2000 people. ~ so, do you have the right to charge those 100 people today $6 when tomorrow it will be $3?
Also, "price gouging" usually refers to necessities. the most popular toy at Xmas time...increase your price as much as you want. charge $300 for Harry Potter. Government is happy with the economical boom. BUT....saying there's a national emergency so the bread on your shelf is now selling for $50 a loaf IS illegal in most states, because you're denying that essential product to someone who cant afford $50, and theres no "reasonable" reason for you to charge $50.
And I know what you might be thinking...auto fuel isnt a necessity like food, water, shelter. but thats why price gouging is usually in emergency-hit areas. Forced evacuations, loss of power (so you need fuel for generators for hospitals, refrigerations for meds, etc), etc,etc...make fuel a necessity. and price gouging of fuel a possibility.
Like, you commented that supply goes down, costs go up, demand goes down. Correct! Its how I learned in my eco classes, too!
BUT! what about when demand "cant" go down..at least temporarily?
For example, a friend of mine in Indian River County, Florida sustained damage to an extra building on her property. That was August of 2004. The earliest date anyone could give her to do the repair work is May, 2006. and that date still holds. Not because the supply was down, the labor force actually has increased, as have roofing supplies...because the demand is (temporarily) up. Way up! One year later, and there are many people still awaiting new roofs in that state.
Should companies legally have the right to say, "OK, we have 15,000 people who want new roofs this month, and can only put new roofs on 15 houses. So. a new roof is normally $10,000 given current supply costs, and we're going to turn away 14,985 people this month. so, now a new roof is $149,850 to make up for our losses." ?
this site: http://www.illinois.gov/gasprices/pgVspv.htm
is an article on price gouging vs. price volatility, related to gasoline. It includes the following paragraph:
What constitutes price gouging? Is it simply that more than a reasonable price is being charged for a product in someone’s view? Is it a price higher than consumers are used to? Frequently price gouging is spoken of in terms of profiteering, that is, pricing products or services unreasonably high during an emergency or disaster. States are beginning to address these issues by implementing new laws specifically aimed at price gouging during unusual circumstances. For example, in 2002 Indiana promulgated a new statute that is triggered when the Governor declares a “State of Disaster Emergency” or a “State Energy Emergency.” It allows the Attorney General to investigate and pursue allegations of price gouging. The gasoline price gouging statute requires the Indiana Attorney General to consider pricing which grossly exceeds the average price at which gasoline was available for a retail market during the seven days preceding a declaration of emergency. The gasoline price gouging statute also requires that the increase in price is not attributable to reasonable market forces.
I also really liked http://en.wikipedia.org/wiki/Price_gouging
It mentions something I DEFINITELY saw while in Florida for the hurricanes a year ago, and see now..... which is, if there is currently enough stock to handle "normal" demand, and the price suddenly increases..this causes a panic...so people rush to buy more (ie, refueling twice a week instead of weekly, so you always have a full tank)....thus, vastly INcreasing demand in the short-term. So, the retailer is getting more profit, selling more than normal...AND potentially creating public hysteria or disorder....fistfights at gas stations, etc.
In florida a year ago there were official curfews, and there were gas station curfews. Cops were at the gas station making sure you didnt get in line for gas after 6pm. and that had to do with there truly not being enough gas.
If prices here in Kansas City jumped to $5 a gallon tomorrow, the public would have reason to believe there had been a decrease in supply...creating that same "emergency" reaction.
anywho, while I was googling...heres an editorial piece suggesting there's no such thing as price gouging...http://www.edlotterman.com/PriceGouging.htm as you said, its simply supply and demand and human nature to resent increasing prices. ;)
AND... if you're still with me, here's Iowa's definition and laws:
Price gouging is the practice of taking advantage of disaster victims by substan-tially raising the prices for needed goods or services without justification. Price gouging is considered an unfair practice under the Iowa Consumer Fraud Act when a disaster declaration is in effect for a county. Iowa Administrative Rules describe the practice as raising prices unreasonably above the price at which the merchandise or service was sold in the usual course of business immediately prior to the onset of the emergency. (The rule recognizes the fact that prices sometimes may be higher because sellers also often incur increased costs.) The rule applies during the emergency declaration and "subsequent recovery period" up to six months.
The price-gouging rule -- which was adopted at the time of 1993's widespread floods -- covers but is not limited to water, food, medicines, sanitation supplies, utilities, and materials, goods, or services for clean-up or repair. Unconscionable price gouging might include unjustified high prices for materials or supplies that victims of storm damage may have little choice but to buy. In 1993, for example, there were price gouging allegations in the rental of "porta-potties" and water pumping equipment.
AND....http://www.insurancejournal.com/news/southeast/2005/08/03/57963.htm is a recent article regarding post-2004 hurricane price gouging by repair companies (tree & water removal, contruction, etc).
hehe...ok, more then anyone ever wanted to know on price gouging, sorry!! Figured, since this wasnt a debate board, i best try to answer from as many angles as possible. :D
plus, *I* found it interesting, at least!
~ Teresa
Teresa
http://www.affordingpickles.blogspot.com
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