Saturday, December 31, 2005

Another Gas Price Increase Coming Soon

On my way home from work tonight, I stopped off at a local convenience store to pick up a couple of cold beers and the attendant told me I should think about getting some gas because the price was going up 10 cents per gallon at midnight. To be honest, I was a little surprised that gas prices were going up again. I haven't heard of any Gulf of Mexico hurricanes or new war talk that would have caused the price to increase and most folks are not traveling near as much as they were this summer.

I've written many times before about the energy market and that I think it's a rigged system where people with the oil raise and lower the price at will, rather than having market forces control the price of crude oil. OPEC was set up for one reason and one reason only and that's to control the price of oil to the world. Oil companies are always saying that they don't have any control over world markets and they are just adjusting their prices due to supply and demand. I just don't by it, anymore.

I think the oil business is a racket and we, the gas users are the victim in this system. I heard on the news today that average heating oil and natural gas prices are going to be 40-50% higher this year than last. How in the world are average Americans going to be able to afford increases of this magnitude? We won't be able to in the long run, but in the short run will will pay them and just be thankful when they go back down.

What we are living in here is an oil game. Producers raise the price every few months, but not too much or long enough for governments around the world to place increase taxes or restrictions on their pricing game. In a true competitive market there would be companies that would take major oil company increases like this and find new customers with discounted prices. However, that doesn't happen in the oil business because everyone that is in the supply chain is in on the game and it's the consumer that will ultimately pay for their extra profits.

In any retail business, except oil, there is true competition that keeps one retailer from price gouging the consumer. However, when was the last time you saw a real gas war between oil companies? It's been a long time for me, now they just all raise their prices together and the customers gets suck with the bill. This is not TRUE competition and the quicker we all lean this fact, the better.

Without governments stepping in and regulating this industry, there will be tremendous price gouging for the foreseeable future. At heart, I believe in capitalism, but not this type of system where there is no real competition, but the appearance of it, which isn't the same thing.

We consumers have been manipulated for years by oil companies and OPEC into believing that these price increases are just part of the competitive marketplace. This is bunk and we all need to make a lot of noise to our legislators because with all the contributions they receive from the oil industry, the only thing they might listen to is the fact they might get defeated if they don't listen to their voters.

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