Thursday, May 17, 2007

Boycott This, pt 2

This post is a result of Jen's comment to part 1, because my thought is that when a comment grows to four paragraphs then it should probably just be a post.

I really wasn't trying to point out that California gas is more expensive. That just happened to be the first chart that I came across that broke down the a gallon of gas into its individual cost components. What I was actually trying to show is how very little of the gas price is actually profit for the oil company. It's probably a very similar percentage for all of the other states too. California just has higher taxes and higher processing costs because of the stricter environmental requirements.

I know it sounded like I was trying to criticize people who don't reduce their usage, but to be honest I really don't care much about it. Personally, I carpool mainly to save money. If it helps the environment or decreases the demand then that's just an additional bonus to me. I was mainly speaking to people who complain the loudest, but don't take any action themselves (Al Gore types).

The reason that gas prices increased after Katrina is the same as why they would increase for plywood or fresh water or anything else. I hate to beat a phrase to death, but in a capitalist economy it's either increased supply or decreased demand. "By shutting down 20 percent of the country's oil- refining capacity in a single day - and boosting prices nationwide by more than 45 cents a gallon on average in a week - hurricane Katrina has exposed just how stretched the nation's refineries are. Now industry and Congress are looking at how to boost capacity." [reference].

And yes, gas prices do differ greatly, sometimes even right across the street from each other, which actually helps to further promote several of my points. First of all, that helps to demonstrate that gas companies obviously aren't coordinating their prices. Secondly, that's the glory of a free market economy - you can go wherever the heck you want to get the gas! I personally prefer Chevron because I have talked to several mechanics and other knowledgeable car people who state that their gas is the best for your car (due to the Techron additive). But generally if there are two stations next to each other and one has significantly cheaper gas, then most likely the more expensive station is going to have to lower their prices eventually - otherwise their pumps won't have any cars parked in front of them. That's the beauty of competition for the consumer!

1 comment:

Amanda Lomonaco said...

your new posts don't allow comments. what up wit dat?

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