No election anytime soon. Why aren't gas prices being jacked up?

[Telly Savalas]

I just want to revisit this theory about international oil companies lowering gas prices to influence U.S. elections, since we haven't heard much about it recently. I'm curious about a few things:

Why did oil companies try to get the GOP to win? Has the Democratic Party done anything in the last 7 months which has any real effect on oil company profits? What exactly was Big Oil afraid of? With respect to Big Oil's agenda, the Democratic Congress hasn't even changed lanes, much less taken a different path.

If some sort of energy cabal controls the executive branch as is claimed here, isn't the FISA vote the latest in a series of confirmations that a Democratic Congress isn't willing to do anything to seriously challenge the authority of this cabal? So why voluntarily surrender billions in revenue by lowering prices, when there's no benefit to be reaped?

A quick and dirty cost-benefit analysis of oil companies dropping gas prices before elections suggests that it would be very stupid for them to do.

Moreover, if gas prices follow a "gouge us when they can, then lower prices before elections" cycle, then why aren't we in the gouging part of the cycle? There aren't any elections for another 17 months. If gasoline prices are dictated by political considerations, then why are they 25 cents a gallon cheaper than they were a couple months ago? What's the motivation? Don't tell me they're trying to prop up Bush's support. Does it really make a difference if his approval rating is 28% instead of 23%?

The theory that erratic oil prices are generated by a semi-monopolistic market with an inelastic demand makes a lot more sense than the notion that oil companies cede billions in the remote hopes of making miniscule differences in public policy.

[Orsino]

1. We're still facing very high prices.

They already are gouging us, and earning record profits.

[Richard Steele]

2. How much is gas where you live, right now?

:silly:

[tammywammy]

3. That's because they weren't lowering prices before an election

And two refineries have gone back online in the last month that's why prices went down a few weeks ago.

I noticed last night, that diesel was down 5 cents, but overall in the last year it's remained around the same price.

[yella_dawg]

4. At the current prices

Commuters are having trouble getting to work. Food prices are skyrocketing. (Transportation costs) There is a tipping point (I figure around four of todays dollars) where the economy will have to readjust. The point is, the majors are charging all the market can bear. They can adjust as economic forces move the maximum price, but basically they make more money selling at just below the critical point than forcing a reshuffling of the economy (depression).


Note that in spite of lowered gas prices, the majors are posting amazing profits.

[Auggie]

5. I think they're screwing with our heads

Keep us guessing. As long as gas pricing remains an enigma they think they can get away with anything.

[dweller]

6. the costs of everything else has risen

and for alot of people, cutting back on gas and other necessities was inevitable. This translates to less revenue at the pumps and other consumer goods.

it's the end of the tourists season also, perhaps they were groaning at the loss of revenue?

:shrug:

i'd like to believe it's a market driven economy, and that at some point we control it with just saying 'no, that's too much' and don't buy it.
dp

[Dogmudgeon]

7. Fear of "Demand Destruction"

They are almost at the point where they will start losing customers. That is very bad for the oil business.

From now on, price increases in oil will NOT necessarily result in price increases in gasoline. The prices will become more "decoupled" and fluctuate more dramatically. Of course, they can't totally decouple because gasoline is made from oil. So there will be pressure to increase prices. Demand destruction will eventually happen anyway.

At the point where demand destruction is eating painfully into capital investment, the oil companies will completely change strategy, retrench, and a severe depression will probably result. They will try to time it with an ongoing recession for cover.

That's how it worked in the 1970s. Only one group won, and its princes are in the White House today.

--p!

[maxsolomon]

8. it goes WAY up, people start squeaking

it goes back down SOME. people stop squeaking & adjust.

an excuse comes along, and it goes WAY up again, leapfrogging the original squeaking point with nary a whimper from the public.

rinse & repeat.

[LSdemocrat]

9. Answer: the manipulation period is very short

They only artificially lower or raise the gas prices for a very short period of time before the election, i.e. about 1-2 weeks, and then they only change the price by about 25 cents per gallon or so. Just enough for people to have a response, but not particularly significant in the long run.

[CK_John]

10. They are going to blame it all on the tax to fix bridges(.05) so they raise it a dime. n/t