Gas Price Gouging - Call it like it is
my2hands
Posts: 17,117
i can't wait to see how the corproate cheerleaders around here try to explain this away
Gas Price Gouging - Call It Like It Is
By Robert Weiner and John Larmett
The Seattle Post-Intelligencer
Tuesday 30 October 2007
Gasoline prices are poised to explode again. Oil companies are setting up the framework for higher prices because of fears of a Turkish invasion of Kurdish-controlled Northern Iraq and administration saber rattling about Iran. Crude oil, at $29.59 a barrel when President Bush took office in January 2001, is now pushing toward $100. Washington State's current gasoline cost of $3.09 per gallon, double Seattle's 2001 price of $1.52, is now second only to California in the 48 contiguous states.
Jay Leno joked on the "Tonight Show" October 17, "The Nobel Prize for Economics was awarded to three people - the CEOs of Exxon, Texaco, and Shell for figuring out how to quadruple the price of oil over a seven year period without an actual shortage."
He's right, there is no actual shortage. Even if something happened, Kurdish oil production is less than 1/4 of 1% of the world's oil, and all of Iraq generates under 3%. Iran's share of world production is falling, 5% last year compared to 8% in 1974. The oil industry uses the unrealized potential of small disruptions to implement huge price fluctuations. They are using the fear factor and war profiteering to repeat and increase what they had last year, the highest profits for any industry in American history.
Furthermore, home heating oil bills are up a third from a year ago, and double six years ago-a $1700 annual household increase, seven times inflation. Home heating bills are the silent economic killer to families - the spotlight has been on car gas prices.
As former House Energy Committee Chair Joe Barton (R-TX) said, "No federal statute prohibits price gouging." Leading Democratic Presidential candidate Hillary Clinton is demanding a new Federal Trade Commission oil price investigation. Oil companies raised gas prices 24 cents a gallon in the 24 hours after Katrina. The FTC reported increases "not substantially attributable to increased costs." It was pure fear-mongering.
Congress is enacting new laws specifically aimed at price gouging, sort of. In May, the House passed groundbreaking legislation making gouging by oil and gas companies a federal crime. The bill calls for jail time and fines of up to $150 million a day for charging "unconscionably excessive prices" and taking "unfair advantage" of consumers during a presidentially declared emergency. The President has indefinitely continued drug trafficking and national security emergencies and could do the same on oil prices strangling consumers.
However, there is no "violation" if the price charged is "substantially attributable to local, regional, national, or international market conditions." The House is saying it is not gouging if the public will bear it. The oil companies could still charge whatever they want-a loophole big enough for a gas-guzzling Mack truck.
In the Senate, Sen. Maria Cantwell (D-WA) has introduced legislation which defines gouging as "charging an unconscionably excessive price" and adds a critical "prohibition on market manipulation", regardless of "emergency" timing. Cantwell has been pushing for its enactment for over two years and missed the 60 vote debate "cloture" by just three votes in 2005. With the new Democratic majority, Cantwell succeeded in including this provision in the Senate energy bill now before a House-Senate conference. Cantwell's ban on market manipulation regardless of "emergencies" could have enormous impact on stopping price spikes.
(An unintended consequence of the Bush saber rattling is even higher prices and more money to Iran, which defeats the purpose of sanctions to stop nuclear weapons.)
Congress needs to rise above special interest relationships, protect Americans from oil company gouging, and define the term so it means what it really is.
Robert Weiner worked six years as a communications director in the Clinton White House and sixteen years in the House of Representatives. John Larmett, senior policy analyst at Robert Weiner Associates, worked on energy-related issues as press secretary to Rep. Jim McDermott, D-Seattle.
http://seattlepi.nwsource.com/opinion/337435_gasprices31.html
Gas Price Gouging - Call It Like It Is
By Robert Weiner and John Larmett
The Seattle Post-Intelligencer
Tuesday 30 October 2007
Gasoline prices are poised to explode again. Oil companies are setting up the framework for higher prices because of fears of a Turkish invasion of Kurdish-controlled Northern Iraq and administration saber rattling about Iran. Crude oil, at $29.59 a barrel when President Bush took office in January 2001, is now pushing toward $100. Washington State's current gasoline cost of $3.09 per gallon, double Seattle's 2001 price of $1.52, is now second only to California in the 48 contiguous states.
Jay Leno joked on the "Tonight Show" October 17, "The Nobel Prize for Economics was awarded to three people - the CEOs of Exxon, Texaco, and Shell for figuring out how to quadruple the price of oil over a seven year period without an actual shortage."
He's right, there is no actual shortage. Even if something happened, Kurdish oil production is less than 1/4 of 1% of the world's oil, and all of Iraq generates under 3%. Iran's share of world production is falling, 5% last year compared to 8% in 1974. The oil industry uses the unrealized potential of small disruptions to implement huge price fluctuations. They are using the fear factor and war profiteering to repeat and increase what they had last year, the highest profits for any industry in American history.
Furthermore, home heating oil bills are up a third from a year ago, and double six years ago-a $1700 annual household increase, seven times inflation. Home heating bills are the silent economic killer to families - the spotlight has been on car gas prices.
As former House Energy Committee Chair Joe Barton (R-TX) said, "No federal statute prohibits price gouging." Leading Democratic Presidential candidate Hillary Clinton is demanding a new Federal Trade Commission oil price investigation. Oil companies raised gas prices 24 cents a gallon in the 24 hours after Katrina. The FTC reported increases "not substantially attributable to increased costs." It was pure fear-mongering.
Congress is enacting new laws specifically aimed at price gouging, sort of. In May, the House passed groundbreaking legislation making gouging by oil and gas companies a federal crime. The bill calls for jail time and fines of up to $150 million a day for charging "unconscionably excessive prices" and taking "unfair advantage" of consumers during a presidentially declared emergency. The President has indefinitely continued drug trafficking and national security emergencies and could do the same on oil prices strangling consumers.
However, there is no "violation" if the price charged is "substantially attributable to local, regional, national, or international market conditions." The House is saying it is not gouging if the public will bear it. The oil companies could still charge whatever they want-a loophole big enough for a gas-guzzling Mack truck.
In the Senate, Sen. Maria Cantwell (D-WA) has introduced legislation which defines gouging as "charging an unconscionably excessive price" and adds a critical "prohibition on market manipulation", regardless of "emergency" timing. Cantwell has been pushing for its enactment for over two years and missed the 60 vote debate "cloture" by just three votes in 2005. With the new Democratic majority, Cantwell succeeded in including this provision in the Senate energy bill now before a House-Senate conference. Cantwell's ban on market manipulation regardless of "emergencies" could have enormous impact on stopping price spikes.
(An unintended consequence of the Bush saber rattling is even higher prices and more money to Iran, which defeats the purpose of sanctions to stop nuclear weapons.)
Congress needs to rise above special interest relationships, protect Americans from oil company gouging, and define the term so it means what it really is.
Robert Weiner worked six years as a communications director in the Clinton White House and sixteen years in the House of Representatives. John Larmett, senior policy analyst at Robert Weiner Associates, worked on energy-related issues as press secretary to Rep. Jim McDermott, D-Seattle.
http://seattlepi.nwsource.com/opinion/337435_gasprices31.html
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The price of gasoline is the reason I can not stand the republican party right now. When the republican congress brought the oil company ceo's up to capitol hill to testify before congress about the price of gasoline i thought, "good, they are finally looking out for us". But then we found out that they were not sworn in and could say anything they liked without have to held accountable. It was just a fake show of interest by the politicians in the hope that stupid people would think they were actually trying to do something.
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I am not sure if this is 100% correct. I mean even if oil production has been pretty much constant since 1974 demand for oil, especially in developing nations has gone up like crazy. Simple economics tells you that if there is higher demand for something people are going to pay more for it.
And this is where the oil companies have us by the throat. I have no choice whether to pay more for it or not. I have to buy gasoline no matter what they raise the price to.
Pensacola '94
New Orleans '95
Birmingham '98
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New Orleans '10 - Jazzfest
New Orleans '16 - Jazzfest
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that's just crazy talk
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Social awareness does not equal political activism!
5/23/2011- An utter embarrassment... ticketing failures too many to list.
Exxon Mobil 3Q Profit Falls
http://biz.yahoo.com/ap/071101/earns_exxon_mobil.html
HOUSTON (AP) -- Exxon Mobil Corp., the world's biggest publicly traded oil company, said Thursday its profit fell 10 percent in the third quarter from a year ago as the company was hurt by lower refining and chemical margins.
The profit was below expectations of Wall Street analysts, and the energy company's shares fell 2.5 percent in morning trading.
Yes, but Exxon raising the prices at the pump so that they can set record profits almost every quarter is within their control.
I had to edit and add the "almost" after seeing your above post.
Pensacola '94
New Orleans '95
Birmingham '98
New Orleans '00
New Orleans '03
Tampa '08
New Orleans '10 - Jazzfest
New Orleans '16 - Jazzfest
Fenway Park '18
St. Louis '22
they have to raise prices. the price of oil and gasoline are DIRECTLY correlated.
I think price gouging happens at the local gas station level. not in the exxon board room.
I am curious how you have no choice. Just from my own perspective it seems to me that the people I know who complain about gas prices the most are the ones who make the choices that lead to them having to use more gas (the people who choose to live far away from where there work and choose to drive bigger cars or SUVs). When I bought my home I chose to live close to my work at least partially because it would mean I would not have to burn a lot of gas commuting each day.
I am not sure where the gouging happens. I did see an interesting story in the news last summer where one of the atlantic provinces put a cap on gas prices. The problem was that with the price they chose a lot of independent gas stations couldn't afford to buy gas from then suppliers so they had to shut off their pumps.
I have no choice in that I have to drive, i have to put gas in my car along with every other person i see on the road every morning. I complain about the price of gas because it is unlike any other type of purchase you make in my opinion. I buy fuel efficient cars also. The price of gas isn't breaking me in any way, but when you keep seeing the profits of these companies sky rocketing on a commodity that people have to purchase and can't do without it is frustrating. And when you see any storm enter the gulf they bump up the price by $.30 that is bullshit too. They have now figured out after the katrina disaster that they can charge anything they want to a certain extent and make more profit then ever before.
If I want to purchase an object but it is too expensive in my opinion and many other peoples opinions, the price will eventually come down. Gasoline is not like this, we have to purchase it and have no option in controlling the price of it.
Pensacola '94
New Orleans '95
Birmingham '98
New Orleans '00
New Orleans '03
Tampa '08
New Orleans '10 - Jazzfest
New Orleans '16 - Jazzfest
Fenway Park '18
St. Louis '22
If you're a socialist you are against everything that has to do with the free market system so there isn't any point in really discussing it further.
I've never had an issue with profits, if they raise it more than I want to pay I'll simply use less. Americans are abhorrently wasteful, it's another reason there is such a problem with water. I'm not sure I can honestly say gas profiteering is a problem when there are 56 or so ridiculously popular makes of SUV's most of which are built on truck frames to get around 20mpg. Are people forced to own these behemoths simply because they like popping out children? Those are the people whining about gasoline.
It's retarded for a station to "gouge" so to speak on gasoline since their primary profit comes from selling products in the store, they only make a few cents on gasoline, a shitload of that is excise tax.
But yeah I'm not really complaining as I never do about profit, I guess I could front the capital to build a well, build a refinery and make my own gasoline, but it's still cheaper to buy it from them.
It remains that there is still not a better system of distribution of resources than the laws of supply and demand and the free market (when it is actually indeed free) Because it is not "free" we used to have government regulation, perhaps some of that is in order here, though it will eventually lead to the reduction of the resource faster than if S&D were allowed to control it. If it's cheaper than it would be naturally, people will horde it. If everything is in line it will be too expensive to do such and thus they will only purchase what they need.
Hammer, meet nail head.
We all make choices and SUVs are just one of many bad choices we make. It's also our behavior. Do we efficiantly "trip chain" so we don't have to make as many trips from home? Do we drive 3/4 of a mile rather than walk or bike? Have we fallen into self-fullfilling prophesies that we "have to" behave the way we do in every instance?
We are exceedingly wasteful and lazy. We do everything for convenience. We don't carpool because we can't smoke in our car or may have to stay at work for 15 minutes waiting for our neighbor. We live 30 miles from work because we "need" at 3,500 square foot house and a three-car garage. We don't take public transportation mainly because of our development patterns, but also because "I'm scared of the bus."
I am a liberal. Corporate greed makes me ill. Yet I find myself defending oil companies on this board. Why? Because gas prices are high because of our reliance on it. I lower my own gas prices. Not per gallon, but via less use. I still have a car. I still don't have perfect behaviors, but I have adjust a lot of them-at very minor inconvenience.
But everytime I see threads about "price gouging" gasoline, I wonder where the threads are about price gauging otehr products. When I think about the way prices have gone up on certai products, it bugs me, but it is only Gas that people think has low prices protected by the Constitution. What we are asking the oil companies to do is to lower their prices for altruistic reasons. That's not good enough (edit: realistic). I'd much rather look at people that are directly profiting off of human suffering (sweat shops and child labor, etc.). But to simply adjust a price based on supply and demand is just...Econ 101.
Edit: If, for example, the government would somehow force gas prices to go down, that would alter the market in a way that would entice SUV purchases and other bad behavior, thereby excellerating air pollution. Low gas prices (which we still have vs. the rest of the world) would enable laziness in terms of innovation and breaking our patterns.
In other words I think some of the petrolium futures market is crap. Much of this price uptick currently is artificial from the suppliers to the refiners. We know oil is a precioius and finite commodity, it's just not as finite as the current situation would lead us to believe.
For the record I'm sorry to anyone if I am seeming like a jerk. I like and respect your passion M2H and I always like reading what you have to say Leo. This is just my opinion on the matter. I'm not really hardcore on any political philosophy.
The "gouging" stuff concerns me for areas especially during natural disasters. If the price is held artifically low, no one will take extraordinary efforts to resupply an area of a needed product and then they will be at the mercy of government. Instead of buying one chainsaw the rich guy will buy three. or take 3 hotel rooms instead of just one... that kind of thing then there aren't enough for everyone else. That's why I so often go back to supply and demand.
I kind of know all that. But I've always wondered whether lasaiz faire (spelling?) fans hated anti-monopoly laws (as that is government intervention) or whether that was the one place they looked at government intervention as OK.
Wow. I've never had an apology for what I viewed as just answering a question before. Maybe you were upset, but it did not show in your response (to me anyway).
No problems
no no, I wasn't upset, Sometimes these things get heated I just wanted to make sure it didn't.
I am totally for some government regulation. Just like everything else it needs balance to operate smoothly. The trouble is in all the lobbying, collusion you scratch my back I'll scratch yours stuff.
I tend to gravitate towards the libertarian party due to economics and social issues but I'm pretty moderate really. I'm sure there are some that are totally against any government interaction, but that generally goes horribly wrong too.
So-called monopolies are not always what they appear to be.
Some people have a choice. I agree. But not everyone does and those who don't are usually the ones just hangin on man. And they're being pinched by these companies. It's a real shame.
how can we control the oil fields if we are losing in iraq?
But there really is no way around it. Oil companies are huge multinational companies. If an country told them they had to cap their prices, they could just ship more to places where prices aren't capped. Seriously the best way for a person to save money on gas is to quit complaining about it. Buy a smaller car, walk to work, move your house closer to where you work. It might not be easy but the only thing people can really control is themselves.
bullshit... we control more than ourselves... that is why we have a government, to enforce laws and make sure fair business practices are being applied
this isnt the wild west with folks selling snake oil... we have laws... we have ethics... we need to make sure everyone is follwoing those laws and ethics
big picture
An energy industry dominated administration takes office, largely financed by the energy industry...
this administration holds secret meetings with the energy industry to formulate "energy policy", and stonewalls any attempt to have those meeting become public...
the president is quoted as saying they are pursuing a "policy of consumption"...
next thing you know we are at war with the worlds 2nd largest oil bearing nation...
next thing you know oil prices and gas prices continue to climb from the onset of this administration to historic highs...
next thing you know a category 5 hurricane hits the gulf coast, one of our major domestic oil producing regions... leaving the energy companies foaming at the mouth to gouge the american public and blame it on the disaster even though actual flow of oil is barely disrupted
next thing you know the american public has been phsychologically fucked into paying over $3 per gallon, cheering every time it dips near $2.50...nearly double what the cost was only 6 years ago... people are now cheering in relief, for fuel $ that has doubled since the vice presidents "secret" energy task force meeting...
next thing you know the energy industry is swimming in world record profits...
all this while selling fuel at record high prices... record prices = record profit
next thing you know energy industry ceo's are bailing out with record setting retirement and bonus packages
next thing you know congree calls the energy industry to capital hill...
next thing you know none of them are to be sworn in, holding them UNACCOUNTABLE for any faleshoods, mistruth, or flat out lies they would present to THE UNITED STATES FUCKING CONGRESS... while only months before professional baseball players were FORCED TO PROVIDE SWORN< BINDING TESTIMONY...
next thing you know, after the pretty little dog and pony show by our beloved corporate whore politiicians on both sodes of the fence... business goes on as usual
next thing you know petroleum and fuel prices continue to rise to historic levels... blaming it on higher demand, poor refining capabilites, natural disasters, and wars...none of which actually create a large ripple in the world flow of petroleum at all... they continue to shovel this propaganda to excuse the record prices, while at the same time never speaking of the record profits being made off of the backs of the people being strangled at the pump and at home... all while being sprinkled happily with lies and propaganda by the corporate controlled media into our nightly news to ease our concerns after driving home passing insane gas prices advertised to us every 1/2 mile...
if you dont think there is price collusion, gouging, and supply collusion going on here, with this administrations guidance and protection... then i have a bridge in minnesota i can sell you
opec also plays a role in this as well, on the supply side... but these people are all in bed together... the countries and the companies... all having a good old time ripping us off, blatantly
why don't you call a spade a spade? you people have pissed and moaned about the government NOT doing anything about global warming. i told you several months ago that since the people have not done anything voluntarily; the price of gas is going to be raised to a point where people will stop driving so much. oil will soon be taxed to clean up the enviornment and the price will jump again. this will effect all plastics so prepare for that.
my truck runs on used cooking oil.
just a subnote; the price of oil is expected to exceed $100 USD a barrel. the reason given is global warming because less heating oil is needed. go figure.
(that from fox news)
So exactly what would you have the government do to control gas prices? It is easy to say the government should do something, but what exaclty would you have them do? I gave an example in an earlier post about how capping prices usually only screws over station owners. The US has crazy low gas prices compared to a lot of places in the world. Gas in Canada is usually $1+ a litre (almost 4 bucks a gallon and we are a huge oil producing nation). More and more people all around the world are driving cars (car use in China is taking off like crazy) so gas companies have more customers than ever, which of course means they are going to have record profits. Plus if people control more than themselves how come nothing is ever done about this issue?
and the only plane not grounded was the one picking up all of the Saudi's linked to Bin Laden and flying them back to the middle east. If people don't believe me...go look up the Michael Moore article in Rollingstone on that crap..
it will make you sick.
why do you think he's always holding the guy's hand when he stops by...
a fricken disgrace. bush is the biggest traitor this country has ever seen....
-Big Fish
Hmm...wonder who his friends are????
-Big Fish