The Truth behind Gas Prices: Why the are going up while oil drops significantly
by Thurston Howell

Everywhere you go people are talking about gas prices. One of the most common questions: WHY does the price of gasoline IMMEDIATELY skyrocket at the pump the very day that oil prices –rise- but barely move when oil prices plunge?

That’s a reasonable question to ask as we all know that the price they paid for that gas already under ground didn’t cost them the new, higher closing price of that day.

They justify this by attributing the new higher price to “replacement cost”. In other words, we are going to charge you more in advance because we will have to replace this gas you are buying -now- with higher priced gas. That is disingenuous because they are still going to turn around and sell the new gas they buy at an even higher price with the same margin built into the new retail price. The gas isn’t going to expire in their holding tanks; so it isn’t going to go unsold.

Another related question: “Oil prices have fallen precipitously in recent weeks yet I am still seeing $4.00+ gas all around me.”

They are quick to jack up gas prices when oil goes up but never when it goes down. The reason according to a column titled “American OPEC” at http://www.tableofwisdom.com/ - is that the refiners are acting as a cartel in their own right, reducing the amount of gasoline supply to a level that will keep their profit margins higher. This will make the falling oil even more profitable for them because their profit spread will go higher on the gasoline sales after they buy more oil to refine at the lower prices.

This is about to become more egregious. The headline today is “U.S. refiners gear up to battle acts of nature”. According to Myra Saefong, “flooding on the Mississippi River and the upcoming start to Atlantic hurricane season have drawn U.S. refineries into the spotlight, raising the risks for operational disruptions at a time when retail prices for gasoline and diesel stand near record levels.”

Yet, this column doesn't mention that these opportunists have been refining at the lowest capacity utilization level in 30 years - driving gas prices near record highs despite oil being far off a record high of $147 a barrel. Columns like this simply provide these companies ADDITIONAL cover - and additional excuses to refine even LESS than at the ridiculous rate heretofore. Perhaps this time they will go for a record. Why not take refinery utilization down to 50% and just blame it on the floods.

They are going to milk this for all they can

Oil refiners have essentially been gang raping consumers for the past several months and it is potentially going to get much worse in coming days and weeks. I that sounds harsh but don’t shoot the messenger. There is no more adequate analogy for what is taking place. Outrage should be directed toward the perpetrators, not the people who report it.

This is all a part of a cycle. They do this because THEY CAN. They walk the line and they do it very closely. They manipulate and exploit the situation until the political rhetoric gets too hot, then they will ratchet down the gas prices – just in time.

What’s the alternative?
Soon we will begin to hear the jawboning of elected parasites threatening to “investigate” them. Are we to believe that these former ambulance chasers who are just as eager to exploit popular turmoil for their own personal gain are going to fix the problem? The same people who bribe the unions, the same people who sue our state governments for enforcing federal laws – these scoundrels are supposed to be trusted to fix the problem?

To get the federal parasites involved is a “cure” worse than the disease itself. It’s as sensible as bashing your skull with a hammer in order to forget your back ache. But while these oil companies are walking the line, thinking they are going to get away with the old charade as they have for decades, they better watch out. These are unprecedented times. The last meltdown was a mere dress rehearsal for what’s coming. With an electorate half of which has been so dumbed down by public indoctrination ala teachers union, they wouldn’t know the difference between Karl Marx and Adam Smith. So when the next government induced financial meltdown occurs, I fully expect that the Saboteur in Chief is going to attempt to nationalize the oil companies with the full approbation of these droids who elected him.

They are very angry and won’t see anything wrong with that. “But that’s what the communist countries do.” No matter; what’s a communist? “Chavez is a great guy and he’s a communist!” As long as the Saboteur doesn’t interrupt Dancing with the Stars and keeps the government checks coming, he can do whatever he wills.

The point that “big oil” may want to heed is this. Some of us know that the government bureaucrats who would attempt to “fix” the problem, suck far worse than you. If the Saboteur gets his hands on these companies, we’re looking at $10-$20 dollars a gallon like in corrupt, leftist regime. And most people would end up having to take public transportation or rickshaws. But that undeniable fact of human history confirmed by about 6,000 years of empirical evidence is all out the door with this idiocracy. Factual though it is, it will always be uncommon knowledge as long as there are ambitious people in this nation who wish to rule over the masses. Be careful.

Have an emergency communications plan together because civil unrest is coming. See the volunteer program called The CB Patriot Project at http://www.cbpatriot.com/ Get involved now.