Hurricane Katrina, as it shut down refineries in the Gulf of Mexico, is cited as the reason for the sharp increase in gas prices in the last 48 hours or so. My faovrite gas station has its prices blocked out on its display board, and I assume this means they are no longer selling unleaded gasoline. The orange traffic cones in front of the pumps would be a good sign of this as well. (They do still have a price listed for diesel, which was around $2.89 if I remember correctly. The diesel pump was unblocked.)
The other stations in the area are selling regular unleaded at $2.99 and above. How do we know that the gas stations or the oil companies aren’t making a huge profit on us, taking advantage of the catastrophic event? The President of United States even declared that price gouging will not be tolerated, but I can’t tell by looking at a price whether it’s fair.
Ron Kelley from CNN Money helps by presenting answers to frequently asked gouging-related questions. In the article, he recommends two resources: the daily fuel gauge (not gouge) report offered by AAA (which at first glance seems inaccurate in my areas) and the gas watch hotline, where consumers can alert the Department of Energy about gas stations whose prices seem unreasonably high.
That second resource led me to more information on the price of gasoline. Its information is only as recent as 2003 but from it you can get a reasonably clear idea of the components of the price of a gallon of gasoline.
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4:02 pm (reply)
I really can’t take this anymore. It’s likely that gas prices are going to go up almost $1 per gallon in my area over the course of a WEEK! If I raised my prices that quickly by that large of a percentage, my clients would simply stop calling. But gasoline is such a perfect product because the market is built in and they have no choice but to keep coming back. Think about it. They could be charging $5 per gallon right now, and although we would be outraged, we would still be lining up at the pump.
8:54 pm (reply)
Two words: supply, demand.
More words: supply has been hit, demand not changed, prices go up.
They should stablize in a couple of weeks, but several of the LA refineries won’t be producing gas for months – that’s why prices are going up.
Gouging? That will self-correct, because, despite fears to the contrary, there is no oil company collusion/conspiracy and the big companies won’t go for such an obviously illegal practice.
9:50 am (reply)
I went to lunch yesterday with some co-workers and we noticed that at 12:10 PM, regular 87 octane was going for $3.09/gal.
We passed by the same station at 1:10 PM and the 87 was going for $3.29/gal.
20 cents in an hour. Don’t know if it’s gouging per se, but it makes me wonder. We’re also having lines at some of our stations. It’s craziness.
9:55 am (reply)
Gas prices june 13¢ per litre or 50¢ a gallon yesterday in Canada.
That’s a shock to the system.
I’ll be furious if the gas companies like exxon come up with $7billion profits per quarter like they have been for a while. They’re gouging while they don’t need to.
3:36 pm (reply)
Follow-up on the price gouging issue: This article from Slate explains why gouging isn’t an issue now but may be later.