In the world today, it would seem if you say something enough times, people will not only believe it, but start to repeat it themselves. I believe that's how it is with the phrase "Supply and demand."
So many people are asking, "Why is the price so high," and of course the "smart people" will always answer: "Supply and demand."
They say it so smugly, so confidently that many are too shy to ask for an explanation. Radio talk shows, Sunday morning news, evening news, they are all saying the same words over and over. Some blame the war, some blame China, some blame the restrictions on drilling or the lack of refineries but it always comes back to "supply and demand."
Supply and demand is a real concept that truly does have a drastic impact on prices, but there are so many aspects to consider. Unfortunately, along with the reality of supply and demand, there are also many myths. In the next few columns I will discuss the international and domestic oil market, some facts and some myths.
Who has the supply? The typical answer is usually the OPEC nations. OK, then who and what is OPEC? It's a group of nations that have bonded together to form an oil cartel. The member nations are Iraq, Indonesia, Iran, Kuwait, Libya, Angola, Algeria, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The OPEC cartel has been based in Vienna since 1965. OPEC meets often to set prices and determine the supply of oil flowing from the individual member nations. Or maybe you would prefer the more simple explanation "" they meet to fix prices and supply.
Recently, certain members of Congress have even tried to charge OPEC with price fixing. Wow, what a concept "" charge them with price fixing. That should really lower the price, right? I don't think so.
Let's just imagine that Congress succeeded, and wins billions of dollars. Do you actually think that the U.S. government is going to send us each a check according to the gallons we used? I don't think so. Or maybe they will use the money to lower the national debt; again, I don't think so. The governmental windfall will more likely just end up funding more pork projects.
Now let's speculate on OPEC's reaction to the charges by Congress. By statute, the purpose of OPEC is to protect their interest both individually and collectively. They can just tighten supply, raise the prices, and recoup their losses; the only winners will be the recipients of the pork projects. You and I will be waiting in long lines and paying even more at the pumps.
If you're really interested in reducing the country's consumption of gasoline and diesel fuel, and you want to save money while doing so without changing your lifestyle, then think fuel additives. Additives can increase your mileage by up to 15 percent, while saving you up to 40 cents per gallon at the pumps. For more information, go to www.thegasman.info and click on additives, or check back for the next column in two weeks.
The week of 6-4-07 the cost of fuel has been dropping rapidly and the stations have dropping slowly.
| Friday | Monday | Tuesday | Wednesday | Thursday | |
| Retail | 3.479 | 3.469 | 3.439 | 3.399 | 3.399 |
| Cost of fuel | 3.189 | 3.209 | 3.129 | 3.000 | 2.96 |
| Margin | 29.9 cpg | 26.9 cpg | 31 cpg | 39.9 cpg | 43.9 cpg |
Week of 6-11-07 both the cost of fuel and the retail prices have continued to drop although not as quickly as the previous week.
| Friday | Monday | Tuesday | Wednesday | Thursday | |
| Retail | 3.299 | 3.2229 | 3.229 | 3.229 | 3.159 |
| Cost of fuel | 2.944 | 2.875 | 2.895 | 2.88 | 2.876 |
| Margin | 35.5 cpg | 35.4 cpg | 33.4 cpg | 34.9 cpg | 28.3 cpg |
CPG = Cents Per Gallon
Well that’s all for today, check back in two weeks for much more! Keep the questions and comments coming.
No comments:
Post a Comment