Thursday, March 1, 2007

What's Up With The Price of Gas?

Lawmakers take aim at gas price gouging
H. JOSEF HEBERT, Associated Press Writer

WASHINGTON - Although gasoline prices have dropped sharply from last summer, 79 lawmakers sought to send a message Wednesday, introducing a bill that would impose stiff penalties on oil and gas companies for price gouging.

With prices at the pump rebounding in recent weeks, Rep. Bart Stupak (news, bio, voting record), D-Mich., said he's worried "this summer prices may once again exceed $3 a gallon."

The bill introduced by Stupak and 78 other members of the House would establish the first federal law against price gouging by oil and gas companies, imposing criminal penalties and fines of up to $150 million for corporations and $2 million on individuals.

Where I live, Gas prices have shot up 40 cents a gallon in the past 3 weeks. I can't fathom why they have increased 40 cents a gallon so rapidly. I was paying 1.99 (which I was happy to pay. I don't think gas should be that expensive, either, but I am happy to pay anything under $2 a gallon) Gas prices then went up to 2.19, overnight, for no discernable reason, and then to 2.39 this past week.

When I started driving, gas prices were just over a dollar a gallon. They hovered just above, and just below a dollar a gallon, but when gas prices went up they would go up maybe .01-.03 at a time. Gas prices were relatively stable, and though they did increase over the first 5 or so years that I had been driving, there were never large fluctuations in the price.

It seems that anymore the price only seems to move in .10 increments. Why is that? Why did gas prices used to change within a penny or two and now can change 10-20 cents overnight?

I don't have any proof that the gas stations are gouging us, but it seems odd that a tank of gas can fluctuate $5-$10 within a few weeks.

Since gas prices are always cheaper in the winter than in the summer (because demand is higher in the summer - vacations, air conditioners, and teenagers driving more are a big part of that) what do we have to look forward to this summer? Forget 3.00 a gallon, are we going to see $4 or $5 a gallon?

There is no reason for that to happen, but what possible reason has there been for an increase of .40 in the last 3 weeks?

Congress, of course, has a brilliant solution. Lets fine the companies! That will teach them, right? (No!) Actually, the price of the million dollar fines will be passed on to the consumer.... raising the price of gas. When it comes to market problems, has government/more law EVER been the solution?

No comments: