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$5 gas on the horizon

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In case any of you hadn't noticed, gas prices have steadily crept upward for the past several weeks. This past Christmas saw the first time that he national average price per gallon was more than $3. In addition, a former oil executive predicts $5 gas by 2012.
So is it time to finally chuck the big gas guzzler? Anybody going to get an electric car? Is this just a scare tactic? Is it working?

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Question: Why is no one criticizing President Obama about the gas prices? People were all of President Bush. Just wondering....

Peggy,

The speculators wait like predators for any kind of an event they can use to spread fear and ramp up the price of oil.

The dirty little secret that the oil companies don't want the average consumer to know or understand is the vast majority of oil being produced and refined is not actually bought and sold on the open market. Yet the oil companies price gasoline as if all of the oil used to refine it was bought on the open market.

Another way to look at this is the cost of beef which is also sold on the open market. However, most of the big fast food chains deal direct with farmers/suppliers and don't buy on the open market thus insulating themselves and their customers from wild market swings, work together to reduce costs, and everyone is still able to make a decent profit. If fast food joints priced hamburgers based upon the fluctuations in the beef market we would see regular price increases and decreases for hamburgers and we don't. In fact the fast food companies work hard to compete with each other, keep costs down, and only raise prices when they absolutely have to.

Has anyone ever seen a gasoline station offer 20% off or a buy one gallon get one gallon free deal? Why not? Too much greed and too little competition.

People are more interested in his vacations and his wife's garden at the White House than to ask him questions of serious national interest.

------

Peggy, that explains "people", but how about the media? They were the one's asking Bush the previous questions. Isn't it the media's job to ask questions of "serious national interest"?

Anon,
"I probably missed it, but is this same question being asked of Obama now that gas is around $3.25 gallon?" I don't think you missed a thing. People are more interested in his vacations and his wife's garden at the White House than to ask him questions of serious national interest.

So Anon, you seem to have challenged my questions, but then you added fuel (no pun intended) to what I was saying. I feel moreso like the Gulf catastrophe is reason for all oil companies to take advantage of higher prices and lower production. We remain at their mercy though, no?

I recall Bush being blamed for $3 gallon gas during his administration. He was criticized for not "doing something" to reduce the cost. The following was a routine question at press conferences.

QUESTION: What do you say to people who are losing patience with gas prices at $3 a gallon? And how much of a political price do you think you're paying for that, right now?
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/21/AR2006082100469.html

I probably missed it, but is this same question being asked of Obama now that gas is around $3.25 gallon?

Peggy,

You wrote: "None of us really expected that to be at their cost, did we?"

Actually, BP has sold off about $21 billion of hard assets to help pay, in part, for the cost of the accident and clean-up. So yes, much of it is at BP's cost... and their shareholders cost... as it should be.

BP has an absolutely terrible safety record and an even worse safety culture which is why incidents like this happen and why they will continue to happen in the future. As a consumer I don't expect to pay higher prices at the pump because they have incompetent leadership nor do I think the government should foot the bill for their gambles or mistakes.

BP's biggest nightmare right now is that consumers will stay away in droves. Their second biggest nightmare is that their competitors will undercut their price and they will loose sales and customers.

IF consumers banded together and boycotted BP it would force BP to lower their prices in an attempt to lure customers back and keep all of their franchise dealers happy... that in turn would start a price war with all of their competitors... and the net result would be in the best financial interest of consumers not the oil companies.

Because of the oil spill we should be enjoying lower oil prices and instead what do we see? And it is a direct result of consumers having a short memory and not holding big oil socially responsible for their actions.

Is it too early for all of us to feel the impacts of BP's spill in the Gulf? None of us really expected that to be at their cost, did we? Would OPEC be happy to increase their prices knowing that BP must increase prices to overcome their financial beating? Look, we're just going to pay whatever they want us to pay. We should never expect the product to be delivered to us based on production costs and a reasonable profit margin. It is the easiest commodity to control and manipulate. The greatest demand of any product, even food. We have to stay on track to become less dependent on gasoline and the raising of prices is just another way to keep us on track. Thank you, Barack Hussein Obama for keeping us on track. It's like having the guidance of the mayor of Naperville.

Demand for oil is down in the US and has been declining for some time. Demand in the US is not growing like it once was yet we are not seeing the results of our efforts to use less fuel. People are driving less, making wiser trips, and more fuel efficient vehicles are all making a dent in the demand.

The biggest problem is we are being sucked into paying more because of foreign "demand". Developing countries and economies are using more oil than they did just a few years ago and the oil companies and the speculators use that as a reason to prop up unreasonably high oil prices.

Part of the problem with the oil company mentality and greed is they will just try to charge more for less that way they will continue to make more money. If prices held or declined along with lower demand would mean oil companies would make less money and we all know they aren't going to agree to making less money until their greed finally catches up with them and they find the price at the pump regulated by the government.

I'm generally not for more government regulation, but I'm no fan of outright greed either.

Mr 77,

Right on, brother!

I blame Dick Furstenau on the rising gas prices!!!!! He is also to blame for the rising cost of fresh produce!!!! DICK MUST GO!!!!

There is no valid reason behind the continued price fluctuations that we see on almost a daily basis. Actual production, refining, delivery costs also do not fluctuate either as often or as wildly as prices do at the pump. The only two things that account for the price fluctuations at the pump are speculation and greed.

It is time for consumers to start demanding that both speculation and greed get removed from the equation. Consumers should pay a fair price at the pump that provides the oil companies with a fair and reasonable profit.

Telecommute.

Sit your butt down, figure out how to work from home and buy in bulk from what is close by. Demand will plummet to a level you never thought possible.

How come no one addresses what demand will be like at $5.00 per gal. The market can raise oil prices to $5.00 per gallon all they want, they just won't sell much of it.

It is another scare tactic --------- just an excuse to stick it to us again. Wake up people ----------- If everyone went out and bought electric cars, it would only be a matter of time before electric rates would go up. This is a no win situation. You only think that it is.

We need to drill here and tell the tree huggers to get lost. As usual, it is a small group controlling the masses. Also, another thing is the replacment cost of batteries. No one seems to be talking about that. Bottom line is pay a lot now for these hybreds and then really pay through the nose for replacement parts such as the batteries.

The only way to control oil prices is to take the speculation out of the markets. These high prices do not reflect the true cost of the oil companies or even realistic pressure in the market place. Rather oil prices are a result of too many people sucking "value" out of the system simply by wheeling and dealing by people who don't actually work in the oil industry, handle oil in any tangible way, much less ever get their own hands dirty. They add no true value to the marketplace other than the "value" they line their own pockets with.

Nope.

The math just plain doesn't work.

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This page contains a single entry by Naperville Sun editors published on December 29, 2010 4:06 PM.

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