Gasoline Prices

[lee]

Here's a recent analysis done by Gasbuddy:

https://www.gasbuddy.com/go/gas-price-report-february-22-2021

As Greg points out, there are many factors at play here.

That seems to only talk about this last month. In our area gas prices have been on a slow increase since early November.

 

[Rinty]

That seems to only talk about this last month. In our area gas prices have been on a slow increase since early November.

Here's a bigger picture analysis:

https://www.eia.gov/outlooks/steo/

Our national media mostly tracks natural gas, West Texas Intermediate and Brent prices, rather than gasoline. They only comment on the latter if there has been a big spike either way. But our local prices have been creeping up recently. Last year we got into the 60 cent per litre zone for a while.

 

[jr31]

Pencil production is complex. What’s the pricing fluctuation like there over, say, the past eight months?

Hmmmm.

Austrian economics anyone?

 

[gregfeeler]

Indeed, a confluence of Statist interventions of different kinds has artificially (and unnecessarily) driven pricing in general. Thank goodness for government. Without government, who would invent cars? No...wait.

Interesting comments. If by statist you mean governments, then that is nothing new. Energy production and management have been subject to government policy and regulation for generations (and longer) in virtually all industrialized countries, and many second and third world countries. Said another way, energy availability and costs are managed intentionally for some real or perceived purpose. Just like many other very important markets which don't perform reliably as "free" markets due to significant externalities.

 

[jaachap]

My running average fuel economy over the full 40K+ miles on my Prius Prime plug-in hybrid is sitting @98.2 mpg. Bring on higher gas prices...

Harry

And......the cost of vehicle batteries for the hybrid will even us out eventually.

 

[jr31]

Interesting comments. If by statist you mean governments, then that is nothing new. Energy production and management have been subject to government policy and regulation for generations (and longer) in virtually all industrialized countries, and many second and third world countries. Said another way, energy availability and costs are managed intentionally for some real or perceived purpose. Just like many other very important markets which don't perform reliably as "free" markets due to significant externalities.

More or less. By Statist, I generally mean those supportive of government intervention in production and trade (or anything, for that matter). Mostly, this intervention is designed to help something or someone; mostly, it may only do that by hurting something else or someone else.

Those trade-offs are predictable. But expecting that they can be made not to exist (i.e., a free lunch) seems unreasonable/irrational to me.

 

[gregfeeler]

More or less. By Statist, I generally mean those supportive of government intervention in production and trade (or anything, for that matter). Mostly, this intervention is designed to help something or someone; mostly, it may only do that by hurting something else or someone else.

Those trade-offs are predictable. But expecting that they can be made not to exist (i.e., a free lunch) seems unreasonable/irrational to me.

The "free market" economic theory says someone will gain and someone lose in any change in a market, whether by "natural market forces" (i.e. in an unregulated market) or by external inputs (government policy, etc.) It is that difference which generates profits which power so-called "free" markets. In fact, that is really the point - the transfer of wealth from one party to another. In "The Wealth of Nations" where Adam Smith makes his compelling case for free markets, he says that self-interest and competition were the "invisible hand" which would direct markets. However, the conditions of equivalence of goods and the access to "perfect knowledge" of the buyer (i.e. knowledge of all other sellers and the value of their goods) which works to put buyers and sellers on an equal footing doesn't exist very often in reality, so corrections must be made.

This is why we have anti-trust laws, insider trading laws, laws requiring the maintenance of a competitive market where there are attempts to create a monopolistic or oligarchic market, and laws governing trade. Even the founding fathers recognized how important regulation of trade was when they granted to the new United States in the Constitution the exclusive power to regulate interstate and international trade.

 

[AKsuited]

And......the cost of vehicle batteries for the hybrid will even us out eventually.

Not necessarily. You spend $50K on a pickup truck that goes one quarter the distance on a gallon of gas, and cost twice as much as my car to begin with (factoring in the $4,502 federal tax credit) then your math falls apart.

 

[jr31]

The "free market" economic theory says someone will gain and someone lose in any change in a market, whether by "natural market forces" (i.e. in an unregulated market) or by external inputs (government policy, etc.) It is that difference which generates profits which power so-called "free" markets. In fact, that is really the point - the transfer of wealth from one party to another. In "The Wealth of Nations" where Adam Smith makes his compelling case for free markets, he says that self-interest and competition were the "invisible hand" which would direct markets. However, the conditions of equivalence of goods and the access to "perfect knowledge" of the buyer (i.e. knowledge of all other sellers and the value of their goods) which works to put buyers and sellers on an equal footing doesn't exist very often in reality, so corrections must be made.

This is why we have anti-trust laws, insider trading laws, laws requiring the maintenance of a competitive market where there are attempts to create a monopolistic or oligarchic market, and laws governing trade. Even the founding fathers recognized how important regulation of trade was when they granted to the new United States in the Constitution the exclusive power to regulate interstate and international trade.

In a word, no.

But most people buy what you’ve sold there.

Government regulation has caused easily as much pain as it has relieved. On the whole, it has not been worth it, irrespective of the quantity of Upton Sinclair one reads. I’d prefer an unregulated arrangement e-v-e-r-y time. Yes, that has downsides; none worse than those the Statists unwittingly support...again just, like, my opinion, dude.

Economics is about human action (HT to anyone that picks up that reference) and nothing else. The monopoly on force cultivated by the (not-so-benevolent) Department of Motor Vehicles we call the government is easily as threatening to freedom as anything a “robber” baron ever did, up to and including the disgusting new members (e.g., Zuckerberg, Dorsey) of that club.

Witness, who normally begs for and supports regulation and more regulation? Indeed. Why? Because such regulation, irrespective of intent, invariably resounds to the benefit of the big guy, not the little guy.

Again, not a mystery. Predictable. Objections to that explicit workflow seem to me nonsensical. There is no defense of “regulation” other than that regulation exercised by the unfettered individual.

More topical, is there any tolerance for the idea that the price of gasoline is adversely impacted (i.e., made higher) by government regulation that is in “everyone’s” best interest? Because that’s a simple truth. Whether that adverse impact is “worth” it (e.g., we saved a planet that was here for billions of years before us and will be here for billions of years after) is a separate (and very egocentric) matter.

I don’t care what gas costs. I have the money. I’m not the little guy. Pass whatever laws you like, they will inconvenience me precious little. But that ain’t the point, and don’t expect me to buy the “government as friend and protector” paradigm because I don’t and will never.

Do what thou wilt. Enjoy.

 

[gregfeeler]

In a word, no.

But most people buy what you’ve sold there.

Government regulation has caused easily as much pain as it has relieved. On the whole, it has not been worth it, irrespective of the quantity of Upton Sinclair one reads. I’d prefer an unregulated arrangement e-v-e-r-y time. Yes, that has downsides; none worse than those the Statists unwittingly support...again just, like, my opinion, dude.

Economics is about human action (HT to anyone that picks up that reference) and nothing else. The monopoly on force cultivated by the (not-so-benevolent) Department of Motor Vehicles we call the government is easily as threatening to freedom as anything a “robber” baron ever did, up to and including the disgusting new members (e.g., Zuckerberg, Dorsey) of that club.

Witness, who normally begs for and supports regulation and more regulation? Indeed. Why? Because such regulation, irrespective of intent, invariably resounds to the benefit of the big guy, not the little guy.

Again, not a mystery. Predictable. Objections to that explicit workflow seem to me nonsensical. There is no defense of “regulation” other than that regulation exercised by the unfettered individual.

More topical, is there any tolerance for the idea that the price of gasoline is adversely impacted (i.e., made higher) by government regulation that is in “everyone’s” best interest? Because that’s a simple truth. Whether that adverse impact is “worth” it (e.g., we saved a planet that was here for billions of years before us and will be here for billions of years after) is a separate (and very egocentric) matter.

I don’t care what gas costs. I have the money. I’m not the little guy. Pass whatever laws you like, they will inconvenience me precious little. But that ain’t the point, and don’t expect me to buy the “government as friend and protector” paradigm because I don’t and will never.

Do what thou wilt. Enjoy.

"Do what thou wilt." Amen. There are many thought provoking ideas being discussed, so, my reply is mostly for the benefit, enjoyment, or consternation, of anyone else following this conversation.

Referencing the last message in this thread, we tried that kind of laissez-faire market system from when Adma Smith wrote “The Wealth of Nations” in the middle 1700’s until the early 1900’s when the public could no long accept the abuses of the Robber Baron Capitalists. No, not the Zuckerbergs or Bezos of today - they are just pretenders who bend from the winds of social media pressure - but men who were the real deal - the Rockefellers, Carnegies, Vanderbilts, and J. P. Morgan's who would stop at nothing to crush their competition, charge crippling prices in monopolistic markets of their own making, and resort to almost anything - legal or not, to achieve endless profits. Laissez-faire went away because it had to. I doubt anyone who’s studied the horrendous abuses of those years will make an argument to return to that laissez-faire world. Very few alive today understand just how bad things were and how they had to be changed to give us protections we take for granted.

The list of these crimes is exceedingly long, but here is a small sample. The were no worker protection laws whatsoever. Children worked for 12- and 14-hour days around machines which could - and did - maim and kill them. In 1911 146 people burned to death in the Triangle Shirtwast Factory fire because the doors were locked – a common practice to keep workers from taking breaks. There were no pure food and drug laws. Anyone could put anything into a bottle and call it "medicine", and although it’s a bit long, bear with me and read the following passage from Upton Sinclair's "The Jungle" about the Chicago meat packing industry in 1905:

"It was only when the whole ham was spoiled that it came into the department of Elzbieta. Cut up by the two-thousand-revolutions-a-minute flyers, and mixed with half a ton of other meat, no odor that ever was in a ham could make any difference. There was never the least attention paid to what was cut up for sausage; there would come all the way back from Europe old sausage that had been rejected, and that was moldy and white—it would be dosed with borax and glycerin, and dumped into the hoppers, and made over again for home consumption. There would be meat that had tumbled out on the floor, in the dirt and sawdust, where the workers had tramped and spit uncounted billions of consumption germs. There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together. This is no fairy story and no joke; the meat would be shoveled into carts, and the man who did the shoveling would not trouble to lift out a rat even when he saw one—there were things that went into the sausage in comparison with which a poisoned rat was a tidbit. There was no place for the men to wash their hands before they ate their dinner, and so they made a practice of washing them in the water that was to be ladled into the sausage. There were the butt-ends of smoked meat, and the scraps of corned beef, and all the odds and ends of the waste of the plants, that would be dumped into old barrels in the cellar and left there. Under the system of rigid economy which the packers enforced, there were some jobs that it only paid to do once in a long time, and among these was the cleaning out of the waste-barrels. Every spring they did it; and in the barrels would be dirt and rust and old nails and stale water—and cart load after cart load of it would be taken up and dumped into the hoppers with fresh meat, and sent out to the public's breakfast. Some of it they would make into "smoked" sausage—but as the smoking took time, and was therefore expensive, they would call upon their chemistry department, and preserve it with borax and color it with gelatin to make it brown. All of their sausage came out of the same bowl, but when they came to wrap it they would stamp some of it "special," and for this they would charge two cents more a pound."

Bon Appetit.

Today’s environmental regulations are right in line with traditional capitalist theory that a business should pay for all of it's inputs. I, and many, will argue against government subsidies for businesses. But, until the beginning of the environmental movement, governments were subsidizing every industry that used natural resources as an input for their products, and the industries that used those products, which is virtually all, one way or the other. If you run a restaurant and take my cow for steaks, you must pay for it. If you run a company that takes my (our) clean water (or soil, or air, or land) and pollutes or destroys it you must make clean it up or pay for it in some way. How is that not right?

The abuses I’ve just touched on are still happening in different ways – just ask anyone who’s life was destroyed by the Great Recession just ten years ago. It was the greatest loss of personal wealth since the Great Depression, caused by our “too big to fail banks”, and not one of them went to jail. And, with the repeal of most of the protections passed by the Congress following that, the banks are doing it again. There's more - here are just the more notable over the last couple of decades: Bernie Madoff, Enron, Leman Brothers, WorldCom, Fannie Mae, Health South, AIG, Tyco International, Quest Communications, and Volkswagen's diesel emissions fraud.

So, no, I reject the argument the government regulation has caused more pain that it's solved. I'm talking real pain by real people. Not the financial "pain" of an executive making who's making 250 times the wage of his or her workers.

Let me be explicitly clear. I am a very strong supporter of the capitalist system, the profit motive, and open markets. Collectively, they are the best system in the history of the world for the creation of wealth, and as engines for invention, innovation, and progress. I also believe governments must be kept in check, but they are a necessity, just as it says in the Declaration of Independence: "That to secure these rights, Governments are instituted among Men.." I believe in the benefits of fire, but I wouldn't let it burn uncontained in my living room. Putting necessary restraints on fire doesn’t mean you want to live in the dark and cold any more then limiting the excesses of capitalism and open markets make you a socialist. Those things make you a realist. We have the opportunity, and obligation, to save a good thing by reforming it rather than letting run unchecked to it's own ruin, and in the end making the world worse for all.

Peace out.

 

[jr31]

"Do what thou wilt." Amen. There are many thought provoking ideas being discussed, so, my reply is mostly for the benefit, enjoyment, or consternation, of anyone else following this conversation.

Referencing the last message in this thread, we tried that kind of laissez-faire market system from when Adma Smith wrote “The Wealth of Nations” in the middle 1700’s until the early 1900’s when the public could no long accept the abuses of the Robber Baron Capitalists. No, not the Zuckerbergs or Bezos of today - they are just pretenders who bend from the winds of social media pressure - but men who were the real deal - the Rockefellers, Carnegies, Vanderbilts, and J. P. Morgan's who would stop at nothing to crush their competition, charge crippling prices in monopolistic markets of their own making, and resort to almost anything - legal or not, to achieve endless profits. Laissez-faire went away because it had to. I doubt anyone who’s studied the horrendous abuses of those years will make an argument to return to that laissez-faire world. Very few alive today understand just how bad things were and how they had to be changed to give us protections we take for granted.

The list of these crimes is exceedingly long, but here is a small sample. The were no worker protection laws whatsoever. Children worked for 12- and 14-hour days around machines which could - and did - maim and kill them. In 1911 146 people burned to death in the Triangle Shirtwast Factory fire because the doors were locked – a common practice to keep workers from taking breaks. There were no pure food and drug laws. Anyone could put anything into a bottle and call it "medicine", and although it’s a bit long, bear with me and read the following passage from Upton Sinclair's "The Jungle" about the Chicago meat packing industry in 1905:

"It was only when the whole ham was spoiled that it came into the department of Elzbieta. Cut up by the two-thousand-revolutions-a-minute flyers, and mixed with half a ton of other meat, no odor that ever was in a ham could make any difference. There was never the least attention paid to what was cut up for sausage; there would come all the way back from Europe old sausage that had been rejected, and that was moldy and white—it would be dosed with borax and glycerin, and dumped into the hoppers, and made over again for home consumption. There would be meat that had tumbled out on the floor, in the dirt and sawdust, where the workers had tramped and spit uncounted billions of consumption germs. There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together. This is no fairy story and no joke; the meat would be shoveled into carts, and the man who did the shoveling would not trouble to lift out a rat even when he saw one—there were things that went into the sausage in comparison with which a poisoned rat was a tidbit. There was no place for the men to wash their hands before they ate their dinner, and so they made a practice of washing them in the water that was to be ladled into the sausage. There were the butt-ends of smoked meat, and the scraps of corned beef, and all the odds and ends of the waste of the plants, that would be dumped into old barrels in the cellar and left there. Under the system of rigid economy which the packers enforced, there were some jobs that it only paid to do once in a long time, and among these was the cleaning out of the waste-barrels. Every spring they did it; and in the barrels would be dirt and rust and old nails and stale water—and cart load after cart load of it would be taken up and dumped into the hoppers with fresh meat, and sent out to the public's breakfast. Some of it they would make into "smoked" sausage—but as the smoking took time, and was therefore expensive, they would call upon their chemistry department, and preserve it with borax and color it with gelatin to make it brown. All of their sausage came out of the same bowl, but when they came to wrap it they would stamp some of it "special," and for this they would charge two cents more a pound."

Bon Appetit.

Today’s environmental regulations are right in line with traditional capitalist theory that a business should pay for all of it's inputs. I, and many, will argue against government subsidies for businesses. But, until the beginning of the environmental movement, governments were subsidizing every industry that used natural resources as an input for their products, and the industries that used those products, which is virtually all, one way or the other. If you run a restaurant and take my cow for steaks, you must pay for it. If you run a company that takes my (our) clean water (or soil, or air, or land) and pollutes or destroys it you must make clean it up or pay for it in some way. How is that not right?

The abuses I’ve just touched on are still happening in different ways – just ask anyone who’s life was destroyed by the Great Recession just ten years ago. It was the greatest loss of personal wealth since the Great Depression, caused by our “too big to fail banks”, and not one of them went to jail. And, with the repeal of most of the protections passed by the Congress following that, the banks are doing it again. There's more - here are just the more notable over the last couple of decades: Bernie Madoff, Enron, Leman Brothers, WorldCom, Fannie Mae, Health South, AIG, Tyco International, Quest Communications, and Volkswagen's diesel emissions fraud.

So, no, I reject the argument the government regulation has caused more pain that it's solved. I'm talking real pain by real people. Not the financial "pain" of an executive making who's making 250 times the wage of his or her workers.

Let me be explicitly clear. I am a very strong supporter of the capitalist system, the profit motive, and open markets. Collectively, they are the best system in the history of the world for the creation of wealth, and as engines for invention, innovation, and progress. I also believe governments must be kept in check, but they are a necessity, just as it says in the Declaration of Independence: "That to secure these rights, Governments are instituted among Men.." I believe in the benefits of fire, but I wouldn't let it burn uncontained in my living room. Putting necessary restraints on fire doesn’t mean you want to live in the dark and cold any more then limiting the excesses of capitalism and open markets make you a socialist. Those things make you a realist. We have the opportunity, and obligation, to save a good thing by reforming it rather than letting run unchecked to it's own ruin, and in the end making the world worse for all.

Peace out.

Again, no.

Government is a greater offender than any you’ve articulated, and that’s saying something.

The most pernicious abuser and enabler of awful outcomes is government. Its good is negligible; its bad is ubiquitous.

Of course, parts of what you assert are favorable in a nostalgic sort of way, but as they are couched in a defense of one of the most demonstrably brutal, ineffectual, and popular fixtures of manifest failure (government), I find them wanting quite a great deal.

But hey, if it makes you feel safer...well, that’s a nice feeling.

 

[gregfeeler]

Again, no.

Government is a greater offender than any you’ve articulated, and that’s saying something.

The most pernicious abuser and enabler of awful outcomes is government. Its good is negligible; its bad is ubiquitous.

Of course, parts of what you assert are favorable in a nostalgic sort of way, but as they are couched in a defense of one of the most demonstrably brutal, ineffectual, and popular fixtures of manifest failure (government), I find them wanting quite a great deal.

But hey, if it makes you feel safer...well, that’s a nice feeling.

You've made your points, and I've made mine, but further back and fourth would be pointless, so we must agree to disagree. Ride well, and often.

 

[jr31]

You've made your points, and I've made mine, but further back and fourth would be pointless, so we must agree to disagree. Ride well, and often.

Cheers!

 

[gregfeeler]

Cheers!

 

[8ninety8]

I can remember gas wars when the stations in my small town, about ten, bid each other down to where the price per gallon bottomed out. Eventually the stations probably figured they’d go broke unless the price was raised, and the price came back to normal, or common sense. Actually I remember once $.09 a gallon. Truly a loss leader when gas stations sold oil and gas with no mini marts like today. Stations today make a wider profit margin on the bag of chippies or a lotto ticket than on a gallon of gas. Ergo, gas, groceries, shoe laces, caps, ice cream bars past their prime, doughnuts hard as a potato and super spreader restrooms.

Anyone buying anything participates in a market. Occasionally you luck out and hit a real bargain. We are where we are today. Fuel likely will continue upwards for some time. All fuel. And we will combat our expenses the best we can individually.

Eventually it may become apparent as to cause of same and a correction will occur.

 

[lee]

I can remember gas wars when the stations in my small town, about ten, bid each other down to where the price per gallon bottomed out. Eventually the stations probably figured they’d go broke unless the price was raised, and the price came back to normal, or common sense. Actually I remember once $.09 a gallon. Truly a loss leader when gas stations sold oil and gas with no mini marts like today. Stations today make a wider profit margin on the bag of chippies or a lotto ticket than on a gallon of gas. Ergo, gas, groceries, shoe laces, caps, ice cream bars past their prime, doughnuts hard as a potato and super spreader restrooms.

Anyone buying anything participates in a market. Occasionally you luck out and hit a real bargain. We are where we are today. Fuel likely will continue upwards for some time. All fuel. And we will combat our expenses the best we can individually.

Eventually it may become apparent as to cause of same and a correction will occur.

We knew a guy who owned 5 or 6 convenience stores and he told us the item with the best profit was fountain pop.

 

[pglaves]

We knew a guy who owned 5 or 6 convenience stores and he told us the item with the best profit was fountain pop.

It costs the store more for the paper cup than the soda syrup and CO2 ingredients.

 

[taran1900]

Gas prices have nowhere to go but up. Number one, we are coming off historically low prices because of record low demand coupled with record high supply.

The fact is, there is a new administration in town whose policies are the opposite of the previous administration regarding energy exploration and production. The new admin has already shutdown the new Keystone pipeline between the US and Canada. This will make the transport of oil more expensive and dangerous raising the cost. And more importantly, it will restrict supply.

The new administration is all in on electric vehicles and is likely to use regulatory agencies to drive up the cost of using fossil fuels.

Finally, when you couple all of the things that are going to squeeze the supply, demand is going to go back up as the pandemic fades.

You can't have a real conversation without discussing at some level, the political forces at work.

Lastly, I am very glad that I do not own a vehicle with more than four cylinders and that my RT averages almost 50mpg.

 

[bigjohnsd]

Gas prices have nowhere to go but up. Number one, we are coming off historically low prices because of record low demand coupled with record high supply.

The fact is, there is a new administration in town whose policies are the opposite of the previous administration regarding energy exploration and production. The new admin has already shutdown the new Keystone pipeline between the US and Canada. This will make the transport of oil more expensive and dangerous raising the cost. And more importantly, it will restrict supply.

The new administration is all in on electric vehicles and is likely to use regulatory agencies to drive up the cost of using fossil fuels.

Finally, when you couple all of the things that are going to squeeze the supply, demand is going to go back up as the pandemic fades.

You can't have a real conversation without discussing at some level, the political forces at work.

Lastly, I am very glad that I do not own a vehicle with more than four cylinders and that my RT averages almost 50mpg.

How does this work?

The new admin has already shutdown the new Keystone pipeline between the US and Canada. This will make the transport of oil more expensive and dangerous raising the cost. And more importantly, it will restrict supply.

When the Keystone XL Pipeline has yet to be built?

 

[mlytle]

Keystone pipeline would have no effect on US gas prices. That oil would have been destined for export, not US refineries. Project cancellation is a political red herring.