Monday, September 5, 2005

Gas Prices - Who's Making The Profit?

Okay, I understand the Law of Supply and Demand. Supply goes down, prices go up. I also understand that Katrina has knocked out big chunks of our refining capacity, as well as closing many of the pipelines that we use to bring in imported oil. So the supply has dropped, and prices are going up as a result. All clear. But...

The price of crude oil hasn't gone up all that much this week. The cost of actually refining it is unchanged. The cost of transporting it is pretty much the same, ditto the various other costs associated with selling it. All the costs of production are the same, but the price went up 50 cents or more per gallon, all over, immediately. Somewhere along the line, someone is getting a lot of extra money for no extra work. That's a pretty big profit. Is this any better than the people who charged $10 for a bag of ice after Hurricane Charlie? Or the hotel that tripled its prices for travellers stranded after 9/11?

So who's profiting, and how well do they sleep at night? Of course, that much money will buy plenty of sleeping pills...

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