I would agree with the "picketing" part of it...a little overboard. It's like people picketing a Carmen concert -- heck yes I think Carmen should be banned from all public arenas, but seriously picketing it?

However, I will disagree (as I'm known to do) that price gouging has been taking place. In isolated instances, yes, there are those that have indeed gouged. Nevertheless, the majority of the fuel market has not been guilty of gouging. Based on gov testimony from the BIG 5 oil companies, and their market financial reportings, they have never fluctuated more than a 8% or 9% profit margin (which is normal). We are paying more for a gal of gas because the distributors (Saudia Arabia, etc) have jacked up the price per barrel due to world demand, thus causing the price that the oil company has to expend to also increase. Processing cost increases have been negligable but it simply comes down to supply and demand. When there isn't enough supply and demand is high, prices will increase. LA and MS during the hurricane saw increased prices because supply was low and demand was exceptionally high, therefore the market could only bare so much, thus driving costs higher.

The reason why Exxon and others have reported record profits is simple math. 8% of a $30 p/barrel is $2.40, while 8% of a $60 p/barrel is $4.80. Percentages don't care what the actual amount equals. It just goes up as the price goes up. It's the way a free market works. Unfortnately those in the government think they can regulate it. Sorry, but oil companies are in the business of making profit. No profit and they have no reason to stay in business.

Sorry for the economics lesson, but I felt the need to ensure that the gouging hype doesn't get propogated anymore than what it already has.

Jennifer,
I beg to disagree with you. Yes there is a tendency to see price increases on Thurs or Friday. However, there are a couple of other methods that I did not mention, that influence this. Price increases do not equal gouging.

First, as a general rule, when our gas goes down, someone else's goes up. The fluctuation happens regionally to maintain a balance across the country. We think we are paying more, but somewhere else someone is thinking they are paying less, when in reality gas prices average out across the board (exceptions would be some states with higher gov taxes and regs - i.e. california). Demand is the cause. They know people will drive more and supply is at a premium, therefore fluctation due to demand occur. Profits may increase due to increased sale quantities, but not due to a change in profit margin.

Secondly, if anything is occuring it is price fixing lower. Did you notice that even though the price p/ barrel didn't go down the day the BIG 5 went into the gov committee hearing that the prices dropped significantly? They [oil companies] artificially forced the prices down, essentially reducing their profit margins for those days. That goes against the free market mentality and is not healthy over the long haul.

Thirdly, your point that "it is already sitting in storage" is unfounded. For every barrel that is sold, that barrel needs to be replaced. Even if that barrel cost $30 10 months ago and is only now being sold, they must now replace it for $60. That is double the initial cost. There will also be an inventory, but the thing to remember is inventory costs a lot of money. The less "unsold product" you have the less financial burden you have. Take hair care products. If you personally bought a crate of hairspray you were hoping would sell in your shop but it doesn't sell for a year, you've lost money over the long haul. Oil companies work the same way. They sell and purchase. It's a "pull system". The purchase of gas drives the "pull" to purchase more barrels.

Fourthly, we live in a world market now with only a few oil distributors. Everyone wants their oil and are willing to pay for it. With China being one of the fastest rising consumers. If China is willing to pay $50 p/barrel, then US based companies are also forced to pay at least that if not more (Distance is a huge factor in transportation costs). The way we avoid this is tap our own natural resources in Alaska, Utah, Idaho, and along the coasts. Less reliance upon foreign oil will mean prices will go down (less transportation, less import fees, less world competition, etc.)

Sorry this is long. If you legitimately think there's still price gouging, I challenge you to research. Here's a great article to start off on. There are corrupt people in "Big Oil" but not nearly as many as the liberal uninformed media makes it out to be.

Unfortunately, too many people think the government has a role in controlling the free market. A free market needs to remain free to remain functional. The cheaters will be revealed in due course.

No not at all. I originally commented on my take on the picketing (the reason for the post). I just took it to another level which also became a point of discussion in this post. I'm all about stirring up discussion for the sake of exchange. It's good for the mind.

OH MAN Joel! YOu are freaking hilarious, brilliant, but hilarious.