Fuel for Thought
Last Sunday the local paper printed a letter from a citizen under the heading that Americans have no right to expect cheap gas. We all need to wake up and boy is he laughing now after being derided for his purchase of a Mini Cooper.
A few weeks ago congressional hearings querying the record profits made by the country's largest oil companies were televised. One gentleman made the comment that Americans need to realize that we compete for fuel in a global marketplace, implying, like the gentelman in the Mini Cooper, that we need to get over it and pony up.
What we pay for petroleum is based on a speculative market and not on a hard and fast cost plus profit calculation. If this speculation has turned into record profits for the oil companies, how can that mean they hadn't been overcharging us? If their costs had been correspondingly higher, they'd have made the same percentage of profit as before the ballooning prices hit.
Perhaps the oil company executive's meaning had been that he could have sold the same fuel to another country for a higher price than here; raising domestic prices thereby made it more attractive to sell here rather than there. Either way it's all about money.
In today's USA Today is a cover story concerning the between twenty and thirty percent rise in heating fuel costs. On the news was a story about how christmas trees and other goods will cost more this year because of higher transportation costs.
It's not about how much it costs you to fill up your car. It's about how much it costs you to heat your home in the winter or feed yourself and your family. You can't escape these effects by trading in your SUV for a hybrid car, though what a wonderful message that would send if we all up and did it. Congress might finally approve higher mileage standards and automakers might get the message.
I don't begrudge the oil companies for their profits although I'm not happy about it. They made their windfall by working within the established system and if there's a culprit to be named, that's where we should look. Change the system so that speculation can't have an effect on retail prices to the point where record profits can be made. Hardship is created and benefitting from that to such a degree is profiteering.
So they made their extra billions and don't regret it. I never expected them to. But let's not sit by and merely accept what happened and allow the system to churn on without changes. This is a tacit acknowledgment that this will happen again and again, and it shouldn't be okay. We're not talking about the cost of bowling balls or chocolate milk but of a commodity that's vital to the interest of virtually every one in this country.
Congratulations to everyone who's bought a Mini Cooper, a Toyota Prius or a Honda Insight. That's a step in the right direction but there's a lot more to do.
A few weeks ago congressional hearings querying the record profits made by the country's largest oil companies were televised. One gentleman made the comment that Americans need to realize that we compete for fuel in a global marketplace, implying, like the gentelman in the Mini Cooper, that we need to get over it and pony up.
What we pay for petroleum is based on a speculative market and not on a hard and fast cost plus profit calculation. If this speculation has turned into record profits for the oil companies, how can that mean they hadn't been overcharging us? If their costs had been correspondingly higher, they'd have made the same percentage of profit as before the ballooning prices hit.
Perhaps the oil company executive's meaning had been that he could have sold the same fuel to another country for a higher price than here; raising domestic prices thereby made it more attractive to sell here rather than there. Either way it's all about money.
In today's USA Today is a cover story concerning the between twenty and thirty percent rise in heating fuel costs. On the news was a story about how christmas trees and other goods will cost more this year because of higher transportation costs.
It's not about how much it costs you to fill up your car. It's about how much it costs you to heat your home in the winter or feed yourself and your family. You can't escape these effects by trading in your SUV for a hybrid car, though what a wonderful message that would send if we all up and did it. Congress might finally approve higher mileage standards and automakers might get the message.
I don't begrudge the oil companies for their profits although I'm not happy about it. They made their windfall by working within the established system and if there's a culprit to be named, that's where we should look. Change the system so that speculation can't have an effect on retail prices to the point where record profits can be made. Hardship is created and benefitting from that to such a degree is profiteering.
So they made their extra billions and don't regret it. I never expected them to. But let's not sit by and merely accept what happened and allow the system to churn on without changes. This is a tacit acknowledgment that this will happen again and again, and it shouldn't be okay. We're not talking about the cost of bowling balls or chocolate milk but of a commodity that's vital to the interest of virtually every one in this country.
Congratulations to everyone who's bought a Mini Cooper, a Toyota Prius or a Honda Insight. That's a step in the right direction but there's a lot more to do.
posted by Rick Ollerman at 9:52 PM
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