Laws Against Price Gouging

[Kidlicious]

Total Return to Shareholder's

1. Refining 60.7%

[Kuciwalker]

Originally posted by DinoDoc
Why? A lot of companies have a better profit margin. Are Americans really such pussies that we ***** and moan about low gas prices because we think that they should be lower?

I agree with him too. I don't see why people would be upset in either circumstance.

[Zkribbler]

But the problem with rising gasoline prices is that, when they increase, so does the price of everything which is shpped by truck.

[Kuciwalker]

So?

[Zkribbler]

Well, people really don't like paying more money for everything.

[Whoha]

everyone buys gas. The price is very visible, if not its precise cause.

[Kuciwalker]

So?

hint: there's a finite amount of oil that it is economical to drill and refine

[Dis]

It's not necessarily price gouging, but collusion in my opinion.

You would think there would be enough oil companies that one would find a way to bring gasoline to the market at a cheaper price. If that were the case, price gouging would be a non issue.

but I have a susupician these companies are working with each other to keep the price of oil high.

We need Walmart to start producing oil and refining it.

[Zkribbler]

pssst. Wal*Mart is a retailer, not a manufacturer.

[Whoha]

Originally posted by Kuciwalker
So?

hint: there's a finite amount of oil that it is economical to drill and refine

So what? People see the price of oil going up, they aren't happy. They further see inaction on this. At 70$ a barrel I doubt very much that theres any source of hydrocarbons that is uneconomical to refine.

For the record I think inflation(or atleast money supply expansion) plays the largest part of the increase in the price of oil. We're headed to gold and oil highs not seen since Carter.

[Kidlicious]

Let's move forward. If your behind too bad.

The refining industry is one where there is a cycle of over investment then under capacity. Too many refineries are built when returns are high, which leads to a glut, and then firms consolidate, close refineries etc., which causes prices to shoot back up. The problem the way I see it is that the market price is sending bad signals. It's inticing overexpansion. The solution is price ceilings which will prevent overexpansion and eliminate the effects of the cycle.

[Kuciwalker]

Right. Because price ceilings don't create shortages and huge lines at the pump.

[Kidlicious]

Originally posted by Kuciwalker
Right. Because price ceilings don't create shortages and huge lines at the pump.

The refiners will still produce the same amt, otherwise their profits will decrease. But they won't build as many new refineries because their rate of return will be lower.

Most importantly consumers will benefit.

[Flubber]

Originally posted by Whoha


So what? People see the price of oil going up, they aren't happy. They further see inaction on this. At 70$ a barrel I doubt very much that theres any source of hydrocarbons that is uneconomical to refine.

Huh the price of crude alone would be almost irrelevent to whether refining is economical. What would be important for refining would be the differential between the price of crude and the prices of higher end refined products

And if you meant PRODUCTION . . . there is always an incremental amount of production that becomes economic at ANY given higher price. If prices were 1000 per barrell there would be reservoirs that would become economic at 1100.

[Flubber]

Originally posted by Kidicious


The refiners will still produce the same amt, otherwise their profits will decrease. But they won't build as many new refineries because their rate of return will be lower.

Most importantly consumers will benefit.

As usual, short term thinking . .. . . Yes a price ceiling would cut prices now but as you admit , new capacity gets LESS likely