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Why are gas prices suddenly $5.00 per gallon?


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2012 Oct 5, 2:05am   11,697 views  41 comments

by Raw   ➕follow (0)   💰tip   ignore  

Someone is getting ripped off here.
These scumbags are manipulating the markets to enrich themselves at the expense of everyone else. The economy is slow, jobs are hard to come by, many people are hurting, and now this.
Jail the bastards.

http://www.latimes.com/business/la-fi-gas-prices-20121005,0,2326954.story

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4   Dan8267   2012 Oct 5, 3:42am  

Raw says

Why are gas prices suddenly $5.00 per gallon?

Because demand for gas is mostly inelastic. Until consumers are hit hard enough in the purse, they won't change their behavior. NPR reported that $4.00 / gal gasoline was the tipping point where people in average cost-of-living areas start to change behavior. Perhaps $5.00 /gal in the tipping point in California.

Whatever that tipping point is, you can be assured that gas prices will be just below that. As people get used to the new prices and that tipping point rises, so will the price of gas. The oil companies don't want to kill the goose that lays the golden eggs, they just want to milk that goose as much as they can.

Of course, if the dumb ass Keynesian government would stop propping up housing prices, bailing out the banks and auto companies, and running the biggest and most worthless socialist program (the military industrial complex), it could easily afford a massive public works project to implement my idea of a smart highway system running personal mag-lift vehicles. This project would reduce unemployment to nearly 0% and reduce the cost of travel to a few cents a mile. But hey, why would we want to do anything that useful when we can provide a safety net for private companies that make fictional products like mortgage-back security derivatives. Isn't that way the fuck more useful to society?

5   edvard2   2012 Oct 5, 4:13am  


What really bothers me is the way that public transit is kept shitty or unavailable in the US in order to force you to buy a car and gasoline.

Depends on where you live in the US. I lived on the East Coast for a few years and in places like Boston and NYC, you really and truly don't need a car. There were trains literally at every few blocks and the system was extensive. You could not only get anywhere and everywhere around the city, but it was also pretty cheap. Amtrack was part of the system too and if you wanted to go to one of the neighboring cities or states, you could.

The systems I've experienced on the West Coast on the other hand are jokes.

6   Patrick   2012 Oct 5, 4:43am  

Actually Caltrain is pretty good in the SF Bay Area, and Metra in Chicago (same kind of trains) was also very good for commuting to downtown.

I'd really like to see them completely free to the public though, paid for by property taxes in the areas they serve. This is fair because property values will rise with free trains in the area.

It's also much more cost efficient not to have any ticketing system at all. You don't have to maintain ticket vending machines or pay conductors to check tickets. Just get on the damn train and go where you want. Fares only pay for half of the current funding anyway, the other half being from various federal and state sources.

And if they were free, they'd be totally full all the time and highway congestion would be greatly reduced.

8   zzyzzx   2012 Oct 5, 5:17am  


I'd really like to see them completely free to the public though, paid for by property taxes in the areas they serve. This is fair because property values will rise with free trains in the area.

It's also much more cost efficient not to have any ticketing system at all. You don't have to maintain ticket vending machines or pay conductors to check tickets. Just get on the damn train and go where you want. Fares only pay for half of the current funding anyway, the other half being from various federal and state sources.

And if they were free, they'd be totally full all the time and highway congestion would be greatly reduced.

Has this been tried before anyplace and what was the result?

9   Dan8267   2012 Oct 5, 5:35am  

zzyzzx says

If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

Bush was an oil man and prices skyrocketed under his administration. Furthermore, the unjust and illegal wars Bush started in the Middle East are exactly what caused oil and gas prices to skyrocket. We're still fighting wars in the very places where we get oil because of the Republicans. If you want cheap gas, you have to keep Republicans out of Congress and the White House. Republicans are owned by the oil industry.

10   Shaman   2012 Oct 5, 5:47am  

As much as it sucks to pay high gas prices, in SoCal there is a benefit. Two actually. First, more taxes are paid to the state to help with the budget! Yay! You demoncrats should be cheering about that!
Secondly, it keeps the pleasure drivers at home and the old people off the roads so I can get to and from work in a reasonable amount of time. Statistics I read once said 22% of drivers are just cruising. High gas prices cut down on that bullshit.
It's almost worth it just for that ...

11   Dan8267   2012 Oct 5, 5:50am  


And if they were free, they'd be totally full all the time and highway congestion would be greatly reduced.

Trains suck. People drive cars so they don' have to schedule their busy days around train and bus schedules. People want and need private transportation where at the drop of the hat at any time of day or night they can go from any place A to any place B.

Furthermore, people don't want to ride with smelly, potentially dangerous, strangers and they don't want their teenage daughters riding in Gropes'R'Us NY subways. Private transportation is simply the only feasible solution.

The only real questions is why are we still using cars, an obsolete and archaic vehicle? Why don't we use fully electric, mag-lifts driven by smart navigation systems? No human drivers means no accidents, no gawker delays, no drunk drivers, no phantom accidents. 3D lane building means no traffic jams, no intersections, and far less of the surface area of a city has to be devoted to transportation so more parks and bigger and more affordable housing. Mag-lift means energy efficiency, no pollution, much faster speeds. How fast? How about supersonic from LA to NYC? No reason you can't do that with mag-lifts in depressurized tubes. Mag-lifts end the need for both cars and planes, so no TSA and cheap fast travel to anywhere in the world.

And hell, after the terrestrial mag-lift system is built, why not have a mag-lift rail to space? Fuck private rockets and space elevators, ride in comfort at a 20° angle and you only have to go 165 miles horizontally to make it into space, 60 miles up. You could take a mag-lift straight to a space hotel and it would be energy efficient to do so, more so than flying a plane from NYC to Chicago.

Why the hell are we still using cars? Stupid humans. No imagination. No creativity. No innovation. Utterly dreadful species.

12   PolishKnight   2012 Oct 5, 5:51am  

"We're still fighting wars in the very places where we get oil because of the Republicans."

So much for "hope and change". Obama can't help spending and fighting wars that Bush told him to do. Maybe Bush should have told him how to win a debate!

Regarding public transit: My wife used to use it here but said she didn't like it due to the "crazies". Overseas in Ukraine and Poland, normal people use it and it's quite pleasant. Here, for the same reasons that most software is written on MS Windows, social momentum has normal people avoiding the bus because of the crazies and the crazies taking over because of the lack of normal people. When I took the green line in Los Angeles to commute home, there were maybe 4 "middle class" (hint folks, code!) women in the whole crowded car.

Also, we don't have money for public transit because we need to send over billions to Germany and China for windmills or to hand over to Democrat cronies. The same system that made New Orleans...

13   dublin hillz   2012 Oct 5, 5:51am  

zzyzzx says


If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

You do remember how in summer of 2008, the gasoline was around $4.50 right? That the gasoline price fell along with stock market implosion in the fall of 2008?

14   Patrick   2012 Oct 5, 5:51am  

zzyzzx says

Has this been tried before anyplace and what was the result?

I don't think free trains have ever been tried.

Dan8267 says

Bush was an oil man and prices skyrocketed under his administration. Furthermore, the unjust and illegal wars Bush started in the Middle East are exactly what caused oil and gas prices to skyrocket.

They did fluctuate wildly under the Bush administration, peaking at $4.10 according to this article:

http://www.cbsnews.com/8301-3460_162-57401650/face-the-facts-a-fact-check-on-gas-prices/

15   Patrick   2012 Oct 5, 5:57am  

PolishKnight says

Regarding public transit: My wife used to use it here but said she didn't like it due to the "crazies".

Yes, I think that in many places the fear of crazies is what keeps people wanting a layer of glass and metal between themselves and their fellow citizens.

So one cost for free trains would definitely be a conductor or even a policeman to keep order on each train. But that cost would probably be less than the cost of the ticket-checking conductors of today.

And if you had pretty much everyone riding the trains, they'd be crowded and the crazies would not be so intimidating by comparison. The scary situation is when it's just you and the crazy guy on the train, probably late at night.

16   drew_eckhardt   2012 Oct 5, 6:08am  

Dan8267 says

Because demand for gas is mostly inelastic. Until consumers are hit hard enough in the purse, they won't change their behavior. NPR reported that $4.00 / gal gasoline was the tipping point where people in average cost-of-living areas start to change behavior. Perhaps $5.00 /gal in the tipping point in California.

Unlikely. At 20 MPG a price increase from $4 to $5 a gallon is just a 10% increase in the operating costs of the average car (55.5 cents per mile is the number used by the IRS).

With the average commute of 16 miles one-way it's $1.60/day which isn't too interesting.

17   PolishKnight   2012 Oct 5, 6:11am  

Actually, Patrick, my wife dislikes the crowded "crazy" busses and trains even more. Then you can't sit a few seats away from them but they're right next to you.

I'm reminded of the scene in "Trading Places" where Dan Ackroyd's character is dressed as Santa, having come in from the rain, and eats some bread he stole from the Christmas party under her beard while a disgusted commuter looks on. THAT was the epitome of traveling via SEPTA!

Funny story: My sister has a friend who ran away from the police when they were busting an underage party and he hid in a muddy swamp overnight. When the police had gone, he got up at 6AM and got on the bus, covered with mud and blood, and realized he didn't have his wallet. He asked a girl if he could borrow a dollar and she gave him one on the condition he didn't sit ANYWHERE near her!

18   Dan8267   2012 Oct 5, 6:23am  

PolishKnight says

SEPTA

SEPTA! Are you a Philly boy?

In SEPTA, you are guaranteed at least one crazy homeless guy talking to himself on every bus trip! In fact, if by any chance there is no crazy guy onboard, the driver will stop the bus and wait for one to get on no matter how long it takes. That's why you sometimes have to wait half an hour after getting on a bus at the Frankford bus terminal before it starts moving. True story.

19   Nobody   2012 Oct 5, 6:28am  

No, because of another round of QE. Guess where all the money is coming from to increase the cost of gasoline? Well, the average income is decreasing while we are printing so much $. It can only mean one thing. The investors are getting money through capital gain, not income.

20   PolishKnight   2012 Oct 5, 6:50am  

"SEPTA! Are you a Philly boy?"

Lived in Cherry Hill and worked in the city for 3 years 20 years ago. Fond memories. One time I went to go into a restaurant and something looking like a cat ran in ahead of me. Turned out to be a rat. I chose to eat elsewhere. I miss the cheessteaks on south street...

21   Dan8267   2012 Oct 5, 7:06am  

I've found that the more grotesque the restaurant, the better the food. The best places have the most cockroaches. That's why I rate NYC and Philly pizarras on a scale of one to five cockroaches.

Still, you should have given that restaurant a chance. The rat could have been the chief, not the meal.

http://www.youtube.com/embed/jwLKPDJqldw

22   PolishKnight   2012 Oct 5, 7:31am  

In Philly, no. There were some of the worst, dirtiest dives I've ever been in and the food was awful to boot. But there were some wonderful ones as well. Overall, I'd say the way to tell the best food is to see how busy it is. If there's a line of people waiting for food (even rats) then it's probably good.

23   Raw   2012 Oct 5, 7:38am  

PolishKnight says

Funny story: My sister has a friend who ran away from the police when they were busting an underage party and he hid in a muddy swamp overnight. When the police had gone, he got up at 6AM and got on the bus, covered with mud and blood, and realized he didn't have his wallet. He asked a girl if he could borrow a dollar and she gave him one on the condition he didn't sit ANYWHERE near her!

LOL
Smart girl.

24   Raw   2012 Oct 5, 7:43am  

Dan8267 says

Because demand for gas is mostly inelastic. Until consumers are hit hard enough in the purse, they won't change their behavior. NPR reported that $4.00 / gal gasoline was the tipping point where people in average cost-of-living areas start to change behavior. Perhaps $5.00 /gal in the tipping point in California.

Strange how refinery fires, maintenance and other problems at different companies tend to all happen at the same time. Very strange.

25   Dan8267   2012 Oct 5, 7:49am  

Raw says

Strange how refinery fires, maintenance and other problems at different companies tend to all happen at the same time. Very strange.

Your not implying that corporations and speculators are driving up the prices for pure profit? That would be unethical. Next thing you'll tell me is that my used car salesman has been stretching the truth.

26   Dan8267   2012 Oct 5, 7:51am  

Raw says

PolishKnight says

Funny story: My sister has a friend who ran away from the police when they were busting an underage party and he hid in a muddy swamp overnight. When the police had gone, he got up at 6AM and got on the bus, covered with mud and blood, and realized he didn't have his wallet. He asked a girl if he could borrow a dollar and she gave him one on the condition he didn't sit ANYWHERE near her!

LOL

Smart girl.

OK, I understand the mud, but the blood requires a bit of explaining.

27   everything   2012 Oct 5, 7:51am  

Why? Because people will pay it.

28   Raw   2012 Oct 5, 7:54am  

Dan8267 says

Raw says

Strange how refinery fires, maintenance and other problems at different companies tend to all happen at the same time. Very strange.

Your not implying that corporations and speculators are driving up the prices for pure profit? That would be unethical. Next thing you'll tell me is that my used car salesman has been stretching the truth.

Yeah, you are right. It would be unethical and therefore could never happen.
Maybe they should be rewarded with a free room in a $300 million prison.

29   Vicente   2012 Oct 5, 8:07am  

The global price of oil AFAICT pays scant attention to who occupies the White House.

Considering inflation, it's actually been more stable than I'd have thought.

30   labdad   2012 Oct 5, 8:38am  

Gas prices are higher because the gas companies can make more money. This is nothing new. It happens every year and some times multiple times a year.

The gas companies control the release of gas. They control when to shutdown plants, when to send gas to other countries, etc. They know when they have to prepare for winter fuel.

The gas companies know that most people are gullable and will believe anything they are told. Fool us once, twice, 20 times, hmmmm....

31   BayArea   2012 Oct 8, 7:36am  


What really bothers me is the way that public transit is kept shitty or unavailable in the US in order to force you to buy a car and gasoline.

Patrick, I agree with you but we can't ignore that the American cultural way is to spread out where there is more land and enclose ourselves with a white picket barrier. We don't like to be stacked and we don't like to be limited to only the space we need. The effect is a major transportation efficiency challenge.

I live and work in the Bay Area and somehow usable public tranportation does not come within 3 miles of either of those two places. I would love to avoid driving if I could and I already bike when weather/time permit.

32   Patrick   2012 Oct 8, 7:43am  

BayArea says

I live and work in the Bay Area and somehow usable public tranportation does not come within 3 miles of either of those two places. I would love to avoid driving if I could and I already bike when weather/time permit.

3 miles is nothing much on a bike! So you do have public transit easily available.

Also, weather always permits in the Bay Area. I ride my to work for 7 years, rain or shine. The climate here is comically mild, even when it's raining.

33   Raw   2012 Oct 8, 7:51am  

labdad says

Gas prices are higher because the gas companies can make more money. This is nothing new. It happens every year and some times multiple times a year.

The gas companies control the release of gas. They control when to shutdown plants, when to send gas to other countries, etc. They know when they have to prepare for winter fuel.

The gas companies know that most people are gullable and will believe anything they are told. Fool us once, twice, 20 times, hmmmm....

Nicely put!
Is there a reason why we don't have some kind of a strategic gasoline reserve for California that can be used every time these refineries are out of commission? Supply shocks and price spikes could be reduced if not eliminated by using reserves.

34   New Renter   2012 Oct 8, 7:54am  


Actually Caltrain is pretty good in the SF Bay Area, and Metra in Chicago (same kind of trains) was also very good for commuting to downtown.

I'd really like to see them completely free to the public though, paid for by property taxes in the areas they serve. This is fair because property values will rise with free trains in the area.

It's also much more cost efficient not to have any ticketing system at all. You don't have to maintain ticket vending machines or pay conductors to check tickets. Just get on the damn train and go where you want. Fares only pay for half of the current funding anyway, the other half being from various federal and state sources.

And if they were free, they'd be totally full all the time and highway congestion would be greatly reduced.

They would turn into mobile homeless shelters.

35   Vicente   2012 Oct 8, 8:39am  

Raw says

Is there a reason why we don't have some kind of a strategic gasoline reserve for California that can be used every time these refineries are out of commission? Supply shocks and price spikes could be reduced if not eliminated by using reserves.

The free market solves all problems.

Companies naturally stockpile appropriate reserves, right?

36   lostand confused   2012 Oct 8, 8:43am  

BART is pretty good too in the SF Bay area. There is no way you can beat it either time wise or expense wise. The toll on the bridge, gas, stop an go traffic and parking in SF is just horrendous. Once you hit SF, MUNI pretty much takes you anywhere you want.

37   mell   2012 Oct 8, 9:07am  

It's because da bernank sez inflation is low.

38   Raw   2012 Oct 8, 9:53am  

Vicente says

Raw says

Is there a reason why we don't have some kind of a strategic gasoline reserve for California that can be used every time these refineries are out of commission? Supply shocks and price spikes could be reduced if not eliminated by using reserves.

The free market solves all problems.

Companies naturally stockpile appropriate reserves, right?

“Eagles are dandified vultures” - Teddy Roosevelt

Free markets when functioning freely are the best options. The oil markets are just an oligopoly.
They have politicians in their pocket.
They unduly influence voters with heavy advertising.
They don't give a damn about pollution.

39   rdm   2012 Oct 8, 10:25am  

Dan8267 says

Because demand for gas is mostly inelastic. Until consumers are hit hard enough in the purse, they won't change their behavior. NPR reported that $4.00 / gal gasoline was the tipping point where people in average cost-of-living areas start to change behavior. Perhaps $5.00 /gal in the tipping point in California.

I was back in the midwest (Illinois) a week ago. Pulled into a gas station ($3.75 a gallon) and noticed that virtually every vehicle was a large pickup or an SUV. Where I live in the North Bay the mix is very different more small pickups, compacts and many more hybrids more typical. Whether this difference is caused by higher gas prices or other "cultural" reasons or economic reasons ( more commutes) I don't know but I would guess the average mpg of a vehicle on the road is much higher in the bay area than in the midwest and south.

Public transport in the North Bay is terrible and essentially limited to bus and ferry. There was originally a plan to extend Bart to the North Bay this was abandoned and was a major mistake. It really is great to visit NYC or DC and use public transport to get anywhere.

40   joshuatrio   2012 Oct 9, 3:41am  

Just in DFW last weekend. Filled up for $3.37/gal.

Tons of cars/traffic on the road. Man that place is the definition of urban sprawl - and poor engineering.

Zillions of cars, lanes, and it took light years to get anywhere.

41   Patrick   2012 Oct 9, 3:56am  

joshuatrio says

Tons of cars/traffic on the road. Man that place is the definition of urban sprawl - and poor engineering.

Zillions of cars, lanes, and it took light years to get anywhere.

Actually, it's perfectly engineered to extract forced labor out of us. You're forced to buy a car to have a job, forced to buy gas, forced to burn a lot of gas sitting there, forced to pay construction companies for gigantic unnecessary highway infrastructure via taxes, and on and on.

It's perfect! (If you're in the 0.1% and trying to redistribute money from the middle class up to yourself.)

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