I have tried very hard to follow the logic in the pricing of gasoline in the United States. Normal logic suggests supply and demand dictates pricing. This is not a hard concept to wrap your head around...most people understand it whether they like it or not. However, that logic seems to go out the window when we are talking about Gasoline.
Last year when hurricane Katrina kick the yogurt out of the Gulf of Mexico, the cost of gasoline, diesel, propane, kerosene and any other petroleum derivative when up immediately. There was not delay. Why it goes up BEFORE the demand exceeds the supply makes not sense to me. The resellers say the price went up because their price went up and they are just passing it on to us. The price has fluctuate quite a bit since last year and we actually got to about $2.00 a gallon for a short time, but now prices are back to almost $3.00 a gallon here in North Texas.
The other day, BP (British Petroleum) announced they have to shut down pipelines that supply 8% of oil the US refines. That is a huge chunk. You would think that following the Katrina logic that prices would go up immediately. SURPRISE, they haven't...yet. I wonder why? I know, never look a gift horse in the mouth, but you cannot help be wonder why that announcement coupled with the price that the same week the price per gallon of oil hit record highs, that the consumer price stayed flat.
I will never understand this I guess. What ever formula they are using to set gasoline prices must be too complex for my little hillbilly brain to grab hold of...
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