Home of the Muppet Imperial Moderator Corps

Why would they want gas prices to go lower?

Are we being screwed right now? Why would the prices of gas go lower when exxon and BP are just going to make a lot of money from it?

If consumers don't change behaviour, and continue to buy, just means that companies don't have to worry about finding cheaper ways to get gas to people.

It is $3 now, we better change now or it will hit $5 and we won't be able to stop it.
Permalink Berlin Brown 
August 10th, 2005
"they" don't want gas prices lower.
Permalink son of parnas 
August 10th, 2005
It is crazy, if it 3 now, it will be 5, 6 in the future. It will hurt travel, shipping, everything.
Permalink Berlin Brown 
August 10th, 2005
Yes, gasoline demand is pretty inflexible with respect to price.

The old supply and demand curve is broken, when you can raise the price and demand does not drop. And this happens because U.S. consumers need gasoline to get to work -- you can only reduce your travel miles so much, in the short term.

If they keep going up, in the long term the SUV's will leave the roads, in favor of 40 MPG cars. And perhaps we learned the wrong lesson in the '70s -- it was the SHORTAGE of gasoline, and long lines, that drove the high-mileage car-sales.

Now, should the price go up to $5.00 or $10.00 per gallon of gas, MAYBE people will drive less. When your gasoline purchase becomes a significant part of your monthly income, then people may start changing behavior.

But this also becomes an inflation driver -- Airlines use gasoline, trucking companies use gasoline, trains use diesel, ships use diesel. All of these food and goods transportation devices will have to raise prices to pay for the gas.
Permalink AllanL5 
August 10th, 2005
And, I tried the subway thing(this is not newyork of course) and I hate waiting 45 minutes to get to work and crawling on top of complete strangers while I stare at a wall.
Permalink Berlin Brown 
August 10th, 2005
It would never happen but if they cut speed limits by 10 mph across the board it may be a big enough reduction in gas consumption that it would scare OPEC into some lower pricing. Just a more short term solution.

We need stuff like the coal powered cars Bush must be envisioning to really fix things. (See energy budget initiatives on the coal industry.)
Permalink I am Jack's infinite id 
August 10th, 2005
If BP lowers its price just below Exxon they will presumably get a much larger share of the gas business and therefore get higher profits, unless Exxon also lowers prices. If both (and the other distributers) keep prices artificially high by some sort of agreement, they will be breaking the law (in the US).

Now if you step back to oil producing companies, you are completely right. That is the purpose of OPEC. Of course if they tighten the screws too much, the incentive for a member company to cheat greatly increases, plus it can affect the demand side in ways that will hurt them in the long term.
Permalink madking 
August 10th, 2005
But if th price of gas was only $1 a gallon I'd feel a lot more comfortable driving my Hummer aroudn town for cruising.
Permalink Joyrider 
August 10th, 2005
I don't know. Spending ($200gas + $300carnote a month) + carinsurance to move around seems a little silly.
Permalink Berlin Brown 
August 10th, 2005
People don't think about economy or efficiency when they think about their car. Advertising has broken that connection. People think about the status of their car, or the emotions when they get into their car. Gasolene could be $20/gallon and people would still purchase SUVs. Because they want a fashionable ride, not a tool to get them from place to place.
Permalink Peter 
August 10th, 2005
Or, they know about the fuel consumption, safety, looks ... and still make a conscious choice to buy the SUV.

Man, some of you are so negative about common sense of average people ...
Permalink Rick Tang 
August 10th, 2005
It is a 100+ billion dollar project to get any other city even close to where new york, japan, and europe are in terms of subway coverage. Who has 100+ billion for an infrastructure investment that will help the environment, increase the quality of life, and decrease dependence on oil? Not US! Our 200 billion is tied up in iraq!
Permalink FaLing@Orbiz.ch 
August 10th, 2005
I ride in royal ease in a sedan chair carried by a team of trained ferrets. I laugh heartily at your obsecene gasoline prices.
Permalink The Amazing Biff 
August 10th, 2005
"Gasolene could be $20/gallon and people would still purchase SUVs"

IIRC SUV sales are hurting, while hybrid sales are taking off.

Philo
Permalink Philo 
August 10th, 2005
Diddums. The oldies and the boomers have burnt the first half of the readily available oil reserve and most of the the remaining half will vanish into current world demand - that is until someone realises it is the only way to power aircraft whereupon only the military and the seriously well-connected will have access to the reserve.

While the first world can cut waste by adopting smaller, more fuel efficient transport (and I am thinking mopeds), it won't delay matters much. Understand we are locked into a usage pattern that will take decades to change - oil is not only consumed in transport, it is feedstock for fertiliser and pesticides, plastics, burned in industry, wastefully heats homes and underpins tourism.

We have moved beyond the point where OPEC can bring prices down by simply pumping more. They are going flat out to satisfy demand, so prices will rise with demand. Newly discovered reserves are not replacing depletion, so supply will drop in an expanding market. Prices will rise.

When the US government discovers that fuel excise is a blunt and regressive way to effectively shapes demand, prices will rise again. Look at the benefits - the roads and the atmosphere will clear and there will be a great reduction in the average citizen's belt size.

I hate to think the only way to delay this is to nuke China. Meanwhile sorry, if you can't afford to drive an SUV now you probably never will.
Permalink trollop 
August 10th, 2005
"I hate to think the only way to delay this is to nuke China."

I hate to think the leadership of China is thinking the same thing about the US.

Philo
Permalink Philo 
August 10th, 2005
I hate to think that they believe we might do it to them. But I'm sure they do.
Permalink Colm O'Connor 
August 10th, 2005
Isn't mutually asssured destruction still in play between the US and China?

I haven't been keeping up on this, but it's hard to imagine anything surviving a nuclear exchange between the two, is it not?
Permalink Mongo 
August 10th, 2005
"I hate to think that they believe we might do it to them."

Colm,

I thought you were British? You think the Chinese think they're gonna get nuked by the Brits?
Permalink Jim Rankin 
August 10th, 2005
BTW if you still entertain desire:

http://www.internationaldelivers.com/site_layout/xtfamily/index.asp

Might be big enough to impress (and carry) your old lady :-)
Permalink trollop 
August 10th, 2005
Interesting to see where you actually stand globally. Local gas is up to $1.06 (Cdn) (right about in-line with the link) for regular but we're only 79th globally. The US toddles in at 102nd with Uruguay and the UK leading the pack. The UK has always lead in gas prices ... gotta suck.
http://www.nationmaster.com/graph-T/ene_gas_pri&int=-1&int=-1
Permalink PNII 
August 11th, 2005
trollop,

Nice commuter vehicles. I know people that would drive these, for commuting, and think it perfectly normal. They are tempting :)
Permalink PNII 
August 11th, 2005
In 1985, I bought a nice full size sedan that got 55 mpg, even with a state of the art emissions control system. I really liked that car.

Here it is 2005, twenty years later, and I have not personally seen another car that gets that sort of mileage since then. What has happened? Surely some technology has advanced in 20 years?

I know that there is a demand for these cars. Why are they not being built?

Today I saw a commercial for a giant hybrid SUV that gets 24 mpg instead of 12 mpg. Great, so this hybrid technology, which is not even as good as what was for sale 20 years ago, is enabling more people to drive giant trucks while burning crazy amounts of fuel. If these hybrids are so great, why don't they get 100 mpg?
Permalink Scott 
August 11th, 2005
> The UK has always lead in gas prices ... gotta suck.

Yeah but check out the price of *cars* in Singapore.
Permalink Christopher Wells 
August 11th, 2005
The 'need' for a private car in Singapore is very much reduced, its not a big place in the first place and the public transportation systems and taxis are excellent.

Hence they ration the number of cars on the roads.
Permalink Simon Lucy 
August 11th, 2005
> Hence they ration the number of cars on the roads.

SFAIK (and I may very well be wrong) there are a limited number of licenses to own a car ... these licenses are auctioned publicly, and end up costing like $50000 ... also you're not allowed to operate a car that's more than X years old.
Permalink Christopher Wells 
August 11th, 2005
That's as I understand it as well.
Permalink Simon Lucy 
August 11th, 2005

This topic was orginally posted to the off-topic forum of the
Joel on Software discussion board.

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