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Gasoline
Prices: Highway Robbery
Published Saturday,
May 8, 1999
I’ve warned
in this column before that it’s a mistake to allow power, especially
economic power, to be concentrated in the hands of a few. This concentration
is a form of dictatorship and it’s bad for people. It’s not
Capitalism, the economic system most of us believe in, but a perversion
of it.
Today our poster child for robbing the American people is the petroleum
industry, a group whose predations are so bald, whose excuses are so lame,
whose ethics are so absent, I’m just documenting the obvious.
In case you missed it, gasoline prices shot up about 40 cents/gallon between
early March and late April. For me, that was from $1.299/gallon
to $1.699/gallon, or about 31%. Your experience may be worse.
When I gassed up on 3/20, I was surprised that gasoline had increased
to $1.41. When I drove by the same station the next day, I had to pull
over and stare. Gasoline was priced at $1.51! When I gassed up on 3/26,
it was $1.61! By 4/8, it was $1.699.
Yes, folks, something had happened. Like Jesus turning water into wine
at Cana, something miraculous had turned $1.41 gasoline in the underground
tanks into $1.69 gasoline!
John D. Rockefeller, 19th century petroleum Robber Baron, would have loved
this.
Recognize that there’s no free market in gasoline. Prices are remarkably
similar, and it’s useless to save a penny a gallon by buying at the
next station down the road. We don’t see specials, quantity discounts,
or contract prices. There are no price incentives, because the industry
knows we’ll be back to buy, no matter what.
Here are some facts, hearsay, questions and opinions:
- Crude oil prices
are the lowest in decades, and the average price of gasoline in Georgia
is 80 cents/gallon. How could anyone possibly justify $1.699/gallon
in California?
- Regular gas is
the same gas, no matter where you buy it. Oil companies buy it from
each other (Michael Krasny’s Forum, KQED radio). Also, your car
doesn’t need premium gas.
- Big refiners in
California set prices, not the “ma and pa” refiners (Independent
Oil Producers Association).
Here’s one of
those “feel good” TV commercials: Open on Chevron logo, eagles
flying, ocean, etc. Pan to Richmond refinery in flames. Dialogue (announcer’s
deep voice). “In our effort to supply your energy needs, we’re
running outdated refineries with shabby equipment. Of course, these
refineries occasionally explode, but when they do, we’ll claim there’s
a gas shortage and rebuild, thanks to the 70 cents/gallon in profits we
get from you. Do people do these things? People without integrity DO.”
Now, a question for local operators: Why is it that a gallon of gas used
to be $1.099 in Citrus Heights, $1.199 in Auburn, and $1.299 in Grass
Valley -- all from the same brand station? Does the gas magically increase
in value as the tanker hauls it up Highway 49?
Help from the government? Not likely. They’ll call for a couple of
lame investigations that will go nowhere. California gets 18 cents, local
government gets 1 cent, and the Fed gets 18.3 cents per gallon of gas
in taxes. That’s 37.3 cents. (Nevada Journal article, citing the
National Petroleum Marketers Association and US Department of Commerce).
So the government has its cut. Besides, politicians are courted by big
oil companies. Why would politicians care about this?
I commend to you www.gasout.org, mentioned in The Union’s front page
article on May 1. It’s not ranting. Rather, it features opinions
from newspapers around the country, dispels myths, and asks for plans
of action.
What can we do? Not buy? Are you kidding? In a society
highly-dependent on the automobile, that’s like protesting dirty
air by not breathing.
We can boycott all stations for a day, but a more effective action would
be to boycott one brand of gas for a month. But then, why put our local
people out of business?
In time, we’ll abandon the old SUV for an economy car, switch to
an electric vehicle, or use more public transportation, but for the present
the big refiners are in control.
Are the oil companies worried about you and me? No. What Lilly Tomlin
used to say on Laugh-In about the phone company is true here. “We
don’t care. We don’t have to.” Boy, I heard that.
Barry Schoenborn is a technical writer, and a ten-year resident of
Nevada County. You can write to him at barry@wvswrite.com. The opinions
of columnists are not necessarily those of The Union.
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