People are going haywire over the supposed gas-shortage, which most likely is not a shortage at all. Many service stations are scared that their supplies wouldn't come in today and most likely raised prices over the weekend so they could handle a few days with the pumps dry. The problem is when the government steps in to "help", something they always do very poorly. Where I live, in the Commonwealth of Virginia, Governor Mark Warner decided to enforce the states anti price gouging law against a Shell station in my town, Centreville, that was charging $5.80 a gallon on Friday. Charging $5.80 a gallon may seem very high, but the stations down the street were charging $3.49 or so. The shell station was probably trying to hold off demand until after the weekend so they wouldn't run dry. Well, after the government's involvement they were down to $2.85 and dry within a day. They probably lost money in the process.
If people are willing to pay for gas at $5.80, which would be the case for some people that commute (though public transportation is always a substitute), there are probably many people who would not pay that much for gas and choose to use their vehicles more wisely. The bottom line would be that gas would be expensive, but it would be available. As can be seen at that Shell station, when the government forces a price (just like the central planners in Moscow), some companies will choose not to sell at all.
The choice comes down to this. Would you rather have $5 gas available at every station, or a defacto ban on driving more than a day a week if there were indeed shortages? I'll take the $5 gas, because at least then I'd have the choice not to drive instead of the government making the decision for me.
Besides, if the government really cared about gas prices, they would repeal the federal tax of 18.4 cents per gallon. States take in even more, ranging from around 18 cents to over 30 in communist enclaves like NY. Let's take Michigan, State of my birth, as an example. If gas costs $3.00 per gallon, that includes 18.4 cents federal tax plus 19 cents state tax and about .75 cents for "environmental fees." Let's not forget the 6% sales tax either. Taking away all these taxes would have consumers paying $2.46 per gallon. And that's just at the state and federal level. Don't forget the counties and cities that add a few more cents per gallon. Most other regions would have similar results, check out the link in this paragraph to see exactly how much your state bills you.
2 comments:
Very interesting. I still believe gouging is going on, but it's by the government taxing the gasoline. It's bullshit and needs to be lowered or stopped and the price per barrel of gasoline should also go down. The U.S. should quit buying gasoline from the Saudi's because they charge too high also.
I find it interesting when the markets report (for example), "Crude oil was selling at $70/barrel today," and then you see the price of gas skyrocket overnight, as opposed to when it's $40/barrel. The gas you buy at the pump isn't the $70/barrel oil, since it takes a few months for crude oil to be refined so that you can put it in your car. Rather, you're probably filling up gas at a crude oil price from a few months ago, not now. Isn't that strange?
Boy, am I glad I have a Toyota Corolla. 34 miles/gallon in city! :-D
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