Chan Lowe | Sun-Sentinel Blogs

The reason the oil companies gave us last year for the terrifying run up in pump prices made at least some sense: the Chinese. Their unquenchable industrial growth sucked all the oil out of the market.

Well, this year it’s different. The economic meltdown is global, and the Chinese engine has throttled back. With fewer jobs to commute to, the rest of us are driving less, as well. We’re in a glut of crude.

So why are we experiencing déjà vu from last summer?

I love this one: “Reconfiguration of refineries to adjust for seasonal blends.” What is that? First of all, it’s not like the pending arrival of summer comes as a big surprise. Why do they suddenly have to shut down all of their refining capacity to “reconfigure?” Who’s doing the planning—chimpanzees?

My car, by the way, runs just as badly on “winter” fuel as it does on “summer” fuel. No need for a “seasonal adjustment.”

We consumers should band together to demand more creativity in excuses from our oil companies. We deserve at least that much.

Of course, they’ll tell us we’re lucky they even bother. If they wanted to, they could charge extra for plausible ones.

Comments

Let's discuss basic practical economics. Everyone who buys something wants to buy it at the cheapest possible price. That is why people comparison shop, look for sales, clip coupons, buy on the internet or on e-bay. We can all agree there is nothing wrong with that.

Everyone who wants to sell something wants to do so at the highest possible price. That is the way it is. Why is it thought of as being unacceptable?

Idiotic price control laws only lead to shortages. The thing that keeps prices low is the fact that consumers are really the ones who decide how much they can pay. In addition, competition will make sure there is adequate supply. The problem is that government regulations and taxes often prevent adequate competition from taking place.

Nobody complains about the high cost of shoes. Not surprisingly, shoe production and sales are neither regulated nor taxed excessively. If you don't think shoes are as important as gasoline, try going to work barefoot tomorrow.

Get the government completely out of energy regulation. After a short period of adjustment (probably a year or two) there will be plenty of energy (including the alternative kind). If it turns out it is too expensive for some people to own their own cars, there will be an increased demand for mass transit. That is not a terrible thing.

We do not need to destroy the economy making sure everyone can afford a car any more than we need to destroy the economy making sure everyone can afford a house.

Posted by: Lolly | April 30, 2009 1:49 PM

According to some financial data read yesterday, the problem is now the "cost" of storing all the unused petrol. Because there is so little space left to store the gas and oil the price of storage is going way up and therefor this only adds to costs. Perhaps not the complex explanation we'd like to here like in "derivitives" but a reasonable explanation.

Posted by: Rick | April 30, 2009 2:34 PM