Know What
I'm Sayin'??
Friday, March 10, 2006
There needs to be a revolution in...Gas Pricing
Sorry for the long post, folkz, but sometimes it's like that.

Atlanta is a driving city. We have a relatively viable mass transit system, but for the vast majority of ATLiens, it just doesn't fit our needs.

The point of that is that I drive my car every day. I drive a 1997 Cadillac STS. It's got the Northstar, and it's name is Bruce. It's better on gas than you might think, and it's a total joy to take on road trips. Which brings us to the subject of: gas. Most days I take the same route away from my house into town. Along that route I pass a QT. Just about every time I pass the QT, I check out the price for the premium gas that Bruce requires.

The gas price is my barometer for the state of affairs in the US. Since I don't watch the news (that's another post), I have lots of faith in this barometer.

The gas price gives me two pieces of information:
1. The current price
2. The price change from the last time I passed the station

Knowing the current price helps me to get a point of comparison for the other prices that I see in my travels. Try it, especially if you live a decent distance from the middle of town. I've seen the difference between what I pay and the price in certain other parts of town vary by as much as .15! This, combined with what I know about other parts of town, usually means that I could probably come up with two gas stations in town that have a difference of at least .20, which is ridiculous, and at times, infuriating.'s my beef. My issue. My cause for concern. The price changes are off the wall. OFF THE WALL. Let's go back say...3 weeks. Back to like mid-February. Things are going well in the world of gas prices, from the consumer perspective. Prices are dropping. A few cents every day or two. Happiness. Prices for regular unleaded even dropped below $2.00 in a few places. The difference between regular unleaded and premium being a dependable .20 and allowing for some wiggle room, say the good stuff was...$2.25 per gallon. Good.

In the space of ONE DAY, the price goes up by a whole dime. I'm on the phone with my Mom, which I somehow often am on the way towards or away from home, and I have to mention it. Not cool. Not cool at all. But I get over it relatively quickly. After all, I have places to be, and I haven't gotten fed up enough to get rid of Bruce (YET), so I pay what they say.

THE NEXT DAY IT'S UP BY ANOTHER DIME. I call my Mom and rant for a few minutes.

The next day, it's gone down. By a penny. Whatever.

So it hovers there for a few days. By now we're up to early March. Call it March 6th, my boy Chris' birthday. For those not keeping up, we're now at $2.44 per gallon from March 6th through March 8th. Today, March 9th, I'm leaving the house around 8pm, heading towards my fiancee's aunt's house. It's down to $2.41. The barometer tells me that it's been a decent week. No severe weather anywhere close. No one has died in Iraq for a few days, I suppose. 3 AND A HALF HOURS LATER, IT'S GONE UP BY 8 CENTS. Tell me. What happened in those 3.5 hours?

Okay, so for a moment let's assume that "something" happened. What happened that was so world-changing that it merited an .08 rise?

At this point, I stop and do a little research on gas prices. Reading is Fundamental, and Knowledge is Power.

Here's what I found:

There are four components to the price of gas. In order of decreasing percentages, they are:
1. Crude Oil Prices
2. Federal and State Taxes
3. Refining Costs and Profits
4. Distribution and Marketing

Simple enough.

Now, there are a few things that can the actual final price that this adds up to.
- Seasonality of Demand - People drive more and burn more gas during warmer months because of the desire to travel.
- Cost of Crude - Obviously
- Supply/Demand Imbalance - Obviously

Finally, there are a few things that, in addition to the other factors, can cause differences in your local price:
- Proximity to Supply - most of our gas comes from the Gulf Coast. The farther you are away from there, the higher your price might be.
- Supply Disruptions - Of course. This is probably the main reason prices skyrocketed during and after Katrina. The supply from the major Gulf Coast refineries in the Louisiana area was dirupted.
- Local Competition - Competition is a standard concept in Economics. Let me know if you need a primer on this.

Oh yeah...don't forget the laws in California and other areas that result in more stringent requirements in emissions and such.

Okay...I have armed myself with information, but I'm still not satisfied. This doesn't explain the 8 cent hike, or the successive 10 cent hikes. You can't convince me that we dropped bombs and my gas went up 3.5 hours later. Not gonna happen. It's a racket.

I'm done ranting for a few minutes. I feel better now.

Please let me take this opportunity to mark the introduction of a recurring feature here - "There needs to be a revolution in...". These posts will focus on processes and stuff that either are just jacked up, or have been the same way for a really long, and I think that with our modern technology and thought processes, we could really do better as a people. One example that will be addressed in the near future - The whole public bathroom process. Flushing, handwashing, and touching stuff.

Good night.

Know what I'm sayin'??
Links to this post:
Create a Link