Five Dollars A Gallon
There a lot of people beginning to notice that the price of gas is going up, and most probably think it has something to do with increased demand because the economy is improving. Well, it doesn’t.
People are seeing the effects of the ‘Goldman Sachs tax’ and the ‘Israel tax’ pushing the cost of fuel higher.
The ”Goldman Sachs tax’ is the upward pressure on oil futures caused by ‘speculators’ like Goldman Sachs [gamblers by any other name]. This has no relationship to supply or demand. [Update: McClatchy covers this]
On the supply side there are several restrictions coming into play related to the ‘Israel tax’. This is basically the pressure being applied to Iran, the fifth largest supplier of crude oil in the world, over the unsubstantiated claim that Iran is developing nuclear weapons.
Iran has responded by ceasing to sell oil to the UK and France which is not good news for British petrol prices. The US and EU assumed that there would be no other problems around the world, and that Saudi Arabia would make up the losses.
Saudi Arabia is having trouble maintaining normal production, and there are problems in Sudan and Nigeria, so the price will go up.
In the US, the refineries decided that they liked $3.50/gallon gas, so they have been exporting refined products, rather than selling them in the US. The US has been a net exporter of petroleum for months, which makes the justification for moves by the GOP to open up more areas for drilling, and pushing the Keystone XL pipeline ‘inoperative’. We have excess capacity in the US, not a shortage.
You would have thought that they would have waited until the latest blow-out of a well on the North Slope was controlled before proposing new wells, but the GOP doesn’t worry about reality.
In the natural gas area producers are reducing their efforts because the price of natural gas plunged when they brought so much on line at the same time. They are limiting the supply to push the price back up.
In a free market, the price of gasoline and natural gas would probably be half of what it is today, but corporations don’t want it to happen, so it doesn’t.
7 comments
I wold love $5 a gallon petrol!
Geez, that is annoying! The gas stations around here couldn’t make up their mind, and kept lowering then upping the price of gas. Finally, they upped it and are leaving it there. I would really like to see it lowered again. I guess we all would…except the people making the bucks off it.
You will be paying 5.1245/gallon, of course that’s £5.1245 which $8.0336/gallon. OTOH,, you get public transportation with the heavy taxes, while we ‘bridges to nowhere’. Since I rarely drove when I was in Europe, as it wasn’t really necessary, I didn’t worry about the petrol prices. In the US you need a car outside of a few urban areas. In addition to the price of gas, you have all of the costs associated with vehicle ownership, and there is no alternative in most areas.
Yeah, OWL, they have been changing the price every other day around here, but it hasn’t gone below $3.50 a gallon in months. If the refiners can get almost 50% more in Europe, they will sell to Europe.
We’re paying over $4.00 a gallon here in Santa Barbara, home of the 1969 oil spill.
I understand that there was an accident at the refinery that supplies most of California’s fuel, so your prices spiked early.
Hugo Chavez [Citgo] sells it to me for $3.59/gallon this week, which is a nickel more than last week.
Yes, Bryan, an “accident”. Just like the “accident” where most of California’s power plants shut down for “maintenance” at the time of the rolling blackouts, nothing to do with using that as an excuse to hike electricity rates by 500%, nosiree…
– Badtux the WASF Penguin
Newt can forget about the $2.50/gallon. The price won’t fall below $3.50 unless we go socialist and nationalize the refineries. The oil conglomerates like that price point, and will adjust to keep it there. With Britain over $8/gallon, they are going to export, not keep it in the US. It’s a global market.