Gas prices

Thomas Matiska tom.matiska at ATT.NET
Sat Apr 10 06:40:26 MDT 2004


The third reason (and most under-reported reason) for the high prices is strong economy is forcing record demand for gas.  Gas guzzlers are still selling well, so is the overpriced gas for them.  Don't hold your breath waiting for Katie Couric to do a piece on strong SUV sales, and how the economy created 308,000 jobs last month in spite of higher energy costs   Doesn't seem to be the season for talking about the strong economy.

Will higher prices spell doom for the economy?  Probably not. Ran some numbers and figured the 50cent increase in the 70's was an extra 7% out of my take home pay. This year's increases are about 1% of my bottom line.  Fuel was about 30% of an airlines expense in the 70's, It is 10-12% now. Those in the media hoping for a bad economy and for events in Iraq to get worse may have to pin all their election year hopes on Iraq.

Second, the prices are in fact higher where the refineries have to comply with tougher standards.  Cheaper gas gas from surrounding states can not be used to meet the high demand. The disparity between $2.49 in California and $1.49 elsewhere could disappear tomorrow if some flexibility was given to the refineries during this "crisis".

Some good info at:

http://www.gaspricewatch.com/usgas_index.asp


> Some say the greedy, bloodsucking parasites at the oil companies are only
> charging $2 a gallon or more because of opec prices and government
> regulations.  If this is the sole reason  for the price increases, then why
> is it when gas prices go sky high like they are now, the oil company
> profits go up?  If they're only raising prices to cover their increased
> costs, their profits shouldn't be going up.



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