Gas Price Mystery Explained … Or Is It?

I’ve been a bit mystified by high gas prices lately, and have been looking for a news story that would dive a little deeper than the usual “Evil Oil Barons Stealing From Poor Folks; BushCheneyHalliburton Plot Suspected”. So this article, in this past Sunday’s Wall St. Journal (via my local Daily Herald), seems to fit the bill: Refiners Cash In on High Gasoline Prices.

It basically blames two factors: the refining segment of the oil business, which has become very profitable, and which in itself can introduce large price swings at the pump, and the influence of hedge funds and other big investors.

Great. Perfect. I’m so relieved, now that my monthly cash outlay for gas has doubled over the last couple of years, because I know that in addition to (1) funding Wahabbi terror cells via Saudi oil money, it is now also helping feather the nests of (2) corrupt hedge fund manipulators and (3) mysterious, nameless oil refinery CEOs.

This is awesome. So when refineries get taken offline for “maintenance”, thereby driving supply down and pushing prices way up, we can just pick up the slack! What could be better?

And since the price of gas, like few other factors, is a major driver for the economy at large, we won’t mind kicking in a little extra for everything else we buy, either. Really, not a problem.

And as for the hedge funds, I’m more than happy to give control over my family’s financial status to a hedge fund manager, who sees oil futures as nothing but an financial instrument to be exploited for short term gain. To us dumb and helpless consumers, “gas” is just “gas”. We use it to drive places and pick up our kids and stuff. We don’t screw people with it. Our bad.But as always, our power as consumers lies in our buying decisions — at least, to the extent that the consumer market for gasoline is a free market (and on that, I have no idea). So short term, our choices are (1) cut consumption, or (2) bend over and take it. Long term, it’s (1) cut consumption, (2) get a vehicle that gets better milage, (3) move somewhere that doesn’t require as much driving, or some combination of those. Or, (4) bend over again and take it.

What we should not do, of course, is get Congress and other lame-brained governmental bodies involved. Free markets – again, to the extent we have them any more – don’t like price controls. And even more to the point, somewhere there is a list of Things We Don’t Want, and surely “bureaucratic management of fuel prices” ranks way, way high on it. How do I know? Here’s my own quick list of Congress-managed market prices that work to the advantage of the consumer instead of the market maker:

  1. Uhhh … (taps forehead) … hey, how ’bout those Cubs!

As for me, I’ll be riding my bike to work twice per week during the summer anyway, as I usually do, so that will cut my fuel consumption and work my aerobic capacity.

Set that market, Valero Energy! Boo-yah!


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