Wednesday, August 03, 2005

Gas Price Gouging - What's This Week's Excuse?

Doc Farmer wants to know why gas prices are spiralling upward with such speed. Is it a case of price gouging? See what Doc has to say. - Sailor

Gas Price Gouging - What's This Week's Excuse?
Written by Doc Farmer
Wednesday, August 03, 2005

I was sorry to hear about King Fahd of Saudi Arabia this week. I never met the man, of course, but he did run a pretty nice country. Nice to me, anyway. I have to admit I still hanker for a nice, crisp, triple-digit daytime temp with a humidity level in the single digits, which is what you usually get from April to around October. The folks there are pretty nice, too - except for their driving, that is - and the country itself has
been an ally of America for a long time.

(At this point, I'm sure some of the readers will accuse me of being an apologist for the Saudi Government or for Saudi nationals. Nothing could be further from the truth. There's no way I'm apologizing for their rotten driving skills!)

Admittedly, I was not at all surprised about the King's demise. Okay, perhaps I thought it would have happened about 5 years ago, but that's only because he'd been ill for a number of years. His half brother, Crown Prince Abdullah, had been running the day-to-day business of the Kingdom for years. Moreover, Saudi Arabia is a stable government, by Middle-Eastern standards at least, and they've kept things operating generally smooth and safe. Except for their driving, that is.

So why did the death of a man who has been sick for a very, very long time, cause the gas prices here to jump 40 cents in a single day?

Yup, that's right. When I drove to work this morning at around 06:00, the price was $2.05 a gallon (I'm not going to bore you with that stupid little 9/10ths at the end of the price tag - why don't they just drop the damn thing?) but when I drove home 10 hours later, the price was $2.45.

What happened in 10 hours that would precipitate an almost 20% increase in the price? What would justify such actions?

Certainly not the death of a single man, king or no king. As said earlier, the (now late) King Fahd had been in ill health for a very long time. It wasn't a secret. In fact, I still recall in 1999, while working at a computer centre, how the manager came to me and asked, sotto voce, if I had heard or read any reports on the web about the king's death. Considering that Khalid
was an Elvis fan, it took a minute for the question to really register. However, it was just another rumor that pops up from time to time. So you can see that this issue isn't exactly new.

The weird thing about all of this is that when you watch the news, and they mention crude oil prices, they're not talking about the price on the barrelhead today. Those $60, $61, and even $62 per barrel prices are futures quotes. Those are speculations on future prices, not the actual price paid by the refineries. Moreover, I think we all know what happens eventually to speculators. They drive the price up and up and up, until there is a crash or a glut or some other fancy financial term, and the morons who did the speculation end up leaping from (or being thrown out of) high-rise office building windows.

Don't believe me? Look at the housing market. It's doing the same thing now that happened in England in the mid-90s. Right before prices
plummeted. Speculation leads to greed leads to higher prices leads to bust.

In the city where I work, there's a bit of a joke that goes like this - ''When can you always predict the gas prices to go up? The day before payday.'' Luckily, since I'm a consultant (and on a different pay cycle) that joke never really worked for me. However, there's enough anecdotal evidence to suggest that this does happen (at least here). I'd suspect that any other city or town with a very large major employer has the same thing going on there as well.

I'm not just referring to a single gas station operator here, either. I either pass directly by or am in line of sight with at least four purveyors of petrol on my short drive to and from my office. ALL of them jacked up their prices by 40¢ without blinking an eye. The same gas that was in their storage tanks this
morning, for which they paid a much lower price, is suddenly a rare and precious commodity this afternoon.

And the excuses for the see-saw in prices are almost as pathetic as the price hikes themselves. Terrorist threat - yeah, like we’ve had since 9/11. London bombing - shouldn’t it be THEIR prices that jump? A love letter from Usama bin Laden - apparently when Al Jazeera talks, my local gas station listens. I personally think that the next major spike in gas prices will come when one of the traders on the floor of the futures market gets a violent case of the hiccups.

What gives?

Now, here's the rub. If this idiotic gas hike runs the same course as all of the previous idiotic gas hikes I've seen so far this year, the price will drop in a couple of days. Not all the way down, of course. Just far enough so that when you're paying 15¢ a gallon more than you did a week ago, instead of 40¢, you'll feel that you've scored a
major bargain. That you've ''won.''

I guess that's what we get for being part of the MTV generation, with the memory and attention span of a retarded stick insect.

At this point, I'm sure some of you are expecting me to demand price controls, or a march on Washington, or a letter writing campaign, or even a boycott. Nope. None of those things. In fact, I don't think anybody in government should do a damn thing. Mostly because government screws up almost every single thing it touches. No, I'm very much against price controls. They are counter-productive at the best of times.

So, what should you or I do when prices get this high? Well, first of all, plan ahead. There's a rule of thumb for Midwesterners, in winter, to never let their car's fuel level go below the half-way mark. That's to keep the fuel line from freezing, should water or condensation get into the tank. Well, now I think it's time to make that rule a year-round event. Further, keep the gas tank
three-quarters full instead of half. That way, you only need to buy a couple of gallons here, a couple of gallons there. If you're a long-haul traveling salesman, this plan doesn't work quite as well, of course, but you get the general idea.

The next thing you should do, when the prices spike like that, is to simply keep on driving. Just pass them by until your tank drops below the ¾ mark. If you absolutely have to stop in, buy a single gallon. That's all, just one. You might have to stop at four or five gas stations, but that's fine. When you go inside to pay, don't buy ANY of the overpriced crap they're selling. I don't care if you really need that ''Git 'R Done!'' lighter or that ''Pull My Finger'' pen being hawked at the register. Don't even buy the burned coffee and stale doughnuts. Just plonk down your $2.45 and say, ''If you want to EVER have my
business again, don't jerk us motorists around like this.''

After that, stick to your guns. If you see that your gas station is slow in dropping their prices, or are in a constant boom/bust cycle, just go elsewhere. You might have to drive an extra mile or three to get to another station, but that'll be time and fuel well spent. Because, when enough folks do that, the scalping will slow down. Oh, there will be a few stations that depend on driver desperation for their income, but after a while they'll either wise up or go belly up.

It's not a perfect solution, folks. It's not a fast solution. It is, nevertheless, about the only one we've got left that is a REAL solution. Remember, market forces don't just push one way. YOU can push back!

About the Writer: Doc Farmer is a writer and humorist who is also a moderator on ChronWatch's Forum. He formerly lived in
Saudi Arabia and Qatar, but now resides in the Midwest. Doc receives e-mail at

This Article Was First Published In ChronWatch At:

No comments:

Post a Comment