Gas price petition?

While I am a 'Big Government' kind of guy, I think such a petition is almost useless. The Republican Party claims to be the party of Free Markets ... allowing competition to set the price.

Capping industry profits is not the way to go about addressing the price of gasoline. Windfall Profits Taxes are also wrong.

The federal government needs to encourage the oil industry to keep refinery capacity in place. As the American Worker has busted his or her collective *** to increase their productivity, the Oil Industry worked to cut their ability to be productive in order to drive prices up. The Federal Government should find some sort of stick to use against the companies which cut their productivity potential by closing refineries. Perhaps a carrot should be made available to oil companies that increase their refining capacity.
 
michaeledward said:
While I am a 'Big Government' kind of guy, I think such a petition is almost useless. The Republican Party claims to be the party of Free Markets ... allowing competition to set the price.
Click to expand...

Perhaps your right, about a lot of what you say, but it does continually remind our government officials that we are unhappy, we rely on our government to take action to protect us, and that this will be an ongoing issue for future elections.

I think the real problem is that healthy competition can't occur because we have allowed too many mergers, thus prices are fixed through agreements by a few companies rather then many competing for our business. The only real solutions are as follows: one is that of a federal one, where Gas companies are treated like consumer power or the electric company and regulated by our governent. Or two, the oil monopolies are forced to be broken up into smaller companies so that healthy competition can occur. I don't see #2 as being a viable solution given our global markeplace, however.

That is the way I see it. One thing I know for sure, though, is that in this case "free market" will not work, as monopolies (like the oil market) will not self-regulate in any way unless it benefits them.

Paul
 
Yeah ... where has the Bush Anti-Trust Division of the Justice Department been vacationing for the last 6 years?

Monopolies do need to be regulated (big government kind-of-guy, remember). I can't tell you how angry I am about the telecommunications industry.... deregulated, broken up, mergered back into one unregulated 800 pound gorilla....(Yea Skype). I see the same problem in Banking ... and in Oil.

I am hesitant of making too much noise, because I fear my party is going to be similiarly impotent to affect change on this subject.

As I have mentioned in another thread .... watch the conservatives scream that the high fuel prices mean we need to open ANWAR and the Coastline to business profit. (See George Will's column today).

It almost makes me want to run for Congress......
 
Here is a great way to make that petition work right now...

If you don't haul concrete bags, drywall or boxes of nails. Don't buy a truck

If you don't carry 4 kids, dog, stroller, groceries...Don't buy or use a SUV all the time.

If you drive from point A to point B...Buy a car with 50+ MPG...

Then you will save all kinds of money.
 
michaeledward said:
Monopolies do need to be regulated (big government kind-of-guy, remember). I can't tell you how angry I am about the telecommunications industry.... deregulated, broken up, mergered back into one unregulated 800 pound gorilla....(Yea Skype). I see the same problem in Banking ... and in Oil.
Click to expand...

VoIP is the only hole in the industry, and that's only there because AT&T Broadband fell flat on its face. Cable carriers can sell toll-quality phone service because there are now ways to do Voice over IP without getting your phone calls stepped on all the other internet traffic. But, the perception of Voice over IP among a lot of consumers is that phone service from a cable company will sound and perform like Skype...and the Big Bells are doing as much as they can to hype up that perception...despite the fact that they themselves depend heavily on VoIP providers to keep their costs down...go figure.

But in Oil, that hole doesn't exist. I'm a pro-business person...but I really don't get the argument. I heard an analyst complain on the radio that Oil is the only business with single-digit profit margins. Single digits, yet record profits are being posted...on the backs of all of us.
 
beau_safken said:
Here is a great way to make that petition work right now...

If you don't haul concrete bags, drywall or boxes of nails. Don't buy a truck

If you don't carry 4 kids, dog, stroller, groceries...Don't buy or use a SUV all the time.

If you drive from point A to point B...Buy a car with 50+ MPG...

Then you will save all kinds of money.
Click to expand...

Shame that conservation is unAmerican.
 
Marginal said:
Shame that conservation is unAmerican.
Click to expand...

Not necessarily. That could be just the logic I need to retire my SUV to winter beater status and talk myself in to buying that Honda S2000 convertible I've been lusting after.

Nothing un-American about that at all!! :D :D :D
 
MichaelEdward, when you talk about increasing supply as a means to keep prices low, you are talking about a "free market" situation. But that's not what's operating here. There doesn't seem to be a supply problem at all. There are no gas lines, like in the 70s. There's plenty of fuel--you just have to pay $3.25/gal for it.

If the reason for high prices at the pump was a supply problem and increased cost to the suppliers, then as our prices went up, ExxonMobil's profits would be about the same as before. But that isn't the case. As our prices have gone up, ExxonMobil has made the highest profits of any corporation in the history of corporations. This is price gouging, pure and simple. We're being raped--and yes, I think there should be a windfall profits tax, because this is surely a windfall. We shouldn't confuse a free market with a lawless market.

Having said that, individuals need to make smarter auto choices, the auto industry needs to make more efficient cars, and we need alternative energy sources pronto.
 
Phoenix,
I posit the supply problem is not at the local pump. It is the overall refining potential. For decades, companies have been closing refineries - restricting capacity. At this time of year, oil companies have to switch over from heating oil to gasoline. Because the oil companies have eliminated all of their 'excess capacity', they can not adapt to things like hurricanes and processing switchovers. These constraints affect the futures market.

Our current problems are created by the futures market.

India is growing. China is growing. The United States is rattling Sabers in the direction of Iran. Iraq can't get any oil out of the ground, much less out of the country. The President is doing all he can to piss of Chavez. If we can't get past the soft timber fight with Canada (they are right, we are wrong), Canada could (and probably should) stop exporting petroleum to us.

As long as our government is instilling fear in the market ... the real constraints in the supply chain are going to be exaggerated.

And ... despite my big government kind of guy attitude ... the only source of revenue into the supply chain is with the end user. Which means, if the government institutes a wind-fall profits tax, it will eventually end up in the price at the pump. (Look at the 1997 tobacco settlement ... compare the price of smokes then, to the price of smokes now).

What we need to do is a) get the companies to behave as if there is real competition and b) get the government to negotiate with oil producing countries in a way to keep the pumps flowing (this is tough) and c) stop threatening every country with an oil well.
 
The petition is useless, vague, and is only being used as a political tool. The low gas prices we have enjoyed in the US for so long has only served to inhibit the development of alternative fuel sources and technologies to get more out of less fuel. Not to mention the environmental impact.

As far as the winfall profits, these aren't only being enjoyed by the corporations, but also the governmental units that tax based on the price of gas and not per gallon. Do you think the State of Michigan really wants lower gas prices? They are raking in 6% of the $3/gal, which is really adding up to support government programs.

Most companies try to meet a profit margin. I would think it ridiculous to think that any company would want to continue to make 5.9 cents a gallon, independent of how expensive that gallon becomes. Like most businesses, they look at their profits as cents per dollar of sales. It only makes sense that as an item gets more expensive, that there would be more profit per unit of that item as the business attempts to make their percentages.

To keep this all in perspective, there are several industries that have higher margins than the fuel industry, for example, Pharmaceuticals, banking, movies, etc. In fact, despite the 'record profits' ExxonMobile ranks 127th in profitibility.

Believe me, I don't want to pay anymore than I have to for gasoline, but we need to be rational about the situation. There is record demand for a limited resource. The days of nickel/gal, quarter/gal, dollar/gal, $2/gal, gasoline are long gone.

Maybe I have a different perspective because I lived in Europe nearly 15 years ago where/when gasoline was about $1 a liter. Speaking of which, has gasoline prices remained stagnant outside of the USA?
 
The petition is useless, vague, and is only being used as a political tool. The low gas prices we have enjoyed in the US for so long has only served to inhibit the development of alternative fuel sources and technologies to get more out of less fuel. Not to mention the environmental impact.
Click to expand...

No doubt that the petition is a political tool.

However, I don't agree with your logic.

I was watching Bill Mar's show on HBO, and the actor that played Magnito in the X-men movies and Gandolf in Lord of the Rings (forgot his name) was arrogently scoffing at the gas price issue, saying basically, "well, Americans just need to drive less, get jobs closer to home, ride bikes more, etc..." I like him as an actor, but this made him sound like a pretentious POS. Such ideas are disconnected from what working families are facing today.

The fact is that we are unable to go back in time and reconstruct our socio-economic structure. All we can do is change and progress from where we are at now. In a Michigan job market with unemployment rates ranging from 11-13% depending on what data your looking at, people are having to take jobs with heavy commutes. We have built a society that is reliant on travel.

It can be argued that our travel relient society was built by all of us, but the facts are that big oil and big auto have been proponents of this structure, and have profited huge from it.

So, should it be solely the responsability of the consumer/worker to make all the changes and sacrifices while large companies continue to profit with no sacrifice? I think not.

This needs to be a collective effort between consumer/worker/employer/seller. Consumers need to be more concious about gas use. Employers need to allow for workers to work at home more when possible. Car companies need to invest in research for alternative fuel based vehicles. And, oil companies should give up the benefits of raking huge profits on our backs.

Yet, none of this will happened without some kind of regulation put in place by government. The reason is because it is more profitable and comfortable for a few to keep people enslaved with horrendous work schedules and commutes, to reap profits of high oil prices, and to make cars the old fashion way rather then research that may not help the bottom line in a years time.

All of this starts with regulating the profits of the oil market, and treating it as we do other commodities that are necessary to the security of the U.S. and world economy. From there we can talk about incentive programs for car companies to research alternative fuel vehicles, and worker programs to encourage less travel.

And unfortunatily, it isn't up to the consumer to make all this happened. This is up to our elected officials (not just the Bush administration, but Congress as well).

So, it may be a political ploy, but I still think it is important to continue to hammer this issue so that our leaders won't lose site of its importance...
 
michaeledward said:
Phoenix,
I posit the supply problem is not at the local pump. It is the overall refining potential. For decades, companies have been closing refineries - restricting capacity. At this time of year, oil companies have to switch over from heating oil to gasoline. Because the oil companies have eliminated all of their 'excess capacity', they can not adapt to things like hurricanes and processing switchovers. These constraints affect the futures market.

Our current problems are created by the futures market.

India is growing. China is growing. The United States is rattling Sabers in the direction of Iran. Iraq can't get any oil out of the ground, much less out of the country. The President is doing all he can to piss of Chavez. If we can't get past the soft timber fight with Canada (they are right, we are wrong), Canada could (and probably should) stop exporting petroleum to us.

As long as our government is instilling fear in the market ... the real constraints in the supply chain are going to be exaggerated.

And ... despite my big government kind of guy attitude ... the only source of revenue into the supply chain is with the end user. Which means, if the government institutes a wind-fall profits tax, it will eventually end up in the price at the pump. (Look at the 1997 tobacco settlement ... compare the price of smokes then, to the price of smokes now).

What we need to do is a) get the companies to behave as if there is real competition and b) get the government to negotiate with oil producing countries in a way to keep the pumps flowing (this is tough) and c) stop threatening every country with an oil well.
Click to expand...

I am not a big government guy at all, but I am not against corporate regulation when the safety and security of our country depends on it. That said, you've made some good points as far as foriegn policy and the effects on the oil market. Its worth thinking about.
 
Tulisan said:
No doubt that the petition is a political tool.

However, I don't agree with your logic.

[...]

Yet, none of this will happened without some kind of regulation put in place by government. The reason is because it is more profitable and comfortable for a few to keep people enslaved with horrendous work schedules and commutes, to reap profits of high oil prices, and to make cars the old fashion way rather then research that may not help the bottom line in a years time.
Click to expand...

Thank you for very much for your response.

I didn't find where you really disagreed with me, and I didn't really find much in your post with which I disagree.

On NPR this morning I heard that without regulation (CAFE, etc.), Europeans are buying cars that average 40 MPG. This is because the high taxes on fuel, consumers have demanded better mileage from auto manufacturers. Some experts in the same story say that to pay for the environmental impact and health related issues caused by our fuel consumption, that gas prices should really be in the $7-8 range. OUCH! That would really hurt.

Yes, we have been sold on the automobile and oil lifestyle of open roads and freedom. See the USA in your Chevrolet and all of that. Gulping oil is proving to be a very tough addiction to break.
 
crushing said:
Thank you for very much for your response.

I didn't find where you really disagreed with me, and I didn't really find much in your post with which I disagree.

On NPR this morning I heard that without regulation (CAFE, etc.), Europeans are buying cars that average 40 MPG. This is because the high taxes on fuel, consumers have demanded better mileage from auto manufacturers. Some experts in the same story say that to pay for the environmental impact and health related issues caused by our fuel consumption, that gas prices should really be in the $7-8 range. OUCH! That would really hurt.

Yes, we have been sold on the automobile and oil lifestyle of open roads and freedom. See the USA in your Chevrolet and all of that. Gulping oil is proving to be a very tough addiction to break.
Click to expand...

You state that Europeans purchase fuel efficient vehicles because of "the high taxes on fuel".

I dispute that language. It is the high cost of fuel that drives the consumer to choose efficient vehicles. How that cost is elevated is irrelevant to the purchase decision. It is a bit of a symantic argument, but if the argument is framed as a 'tax issue', rather than 'cost' issue, you obscure the relevant facts.

Consumers choose in part based on economic factors.
 
Very good point michaeledward, I also think it would be misleading to say a consumers decision was based on the taxes rather than the overall cost of the product. For example, most consumers only see the price per gallon and not necessarily the components that go into making up that price (R&D, Production, Transportation, excise taxes, sales taxes, profit, etc.).
 
Well rising gas prices might be the best thing that can happen.

Here is my logic.

The VAST majority of people drive gasoline engines, not diesel. So therefore, if we get a massive rise in the cost of gasoline, and keep diesel fuel lower...it would be great. Diesel cars in Europe get MASSIVELY more MPG and lend themselves to the use of renewable energy resources better than regular gasoline. Also the cost of goods is dependent on the cost of moving merchandise via trucks, boats and the like. Since almost all the methods of transport are diesel based, that will keep the cost of goods lower. Diesel is needed much more for keeping our world working than regular gas.

This would spur a development of smaller Diesel powered cars and help to remove all the older cars from the roads that break, blow up, fall apart and allow more people to drive. I'm not attempting to be smug, but we need to put the privilege back in driving to reduce a lot of the crap associated with the entitlement based driving system we have now.
 
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