Melvin Waldron, CGCS said: Heck I'm already working for 75% of the normal salary of superintendents in Missouri, (venting again)....I agree maybe it's great that ExxonMobil is making all of that profit, because we all own stock through our retirement plans, kind of like a damned if you do, damned if you don't type of deal, too many things are tied to each other, certainly not making anything simple to fix. But in my comments, the question is, in order to make those kind of profits, raising gas prices like they do certainly does effect the economy, which in the long run isn't that good for the long term of the over all economy. Long term, did a company hurt itself by hurting the economy around them? Maybe oil it doesn't because eventully that runs out, and something else will be running our engines, making a product like tv's could be totally different, heck I hear this year they aren't making any money on their selling of tv's this year because they had to cut the prices to get us to buy them.
Hold on, there. Did a company hurt itself by hurting the economy around them? We can't say that ExxonMobil hurt the economy around it any more than we can say that you hurt employment in your town by occupying a job and salary that could employ two people in your town if your pay was cut in half!
Oil is certainly a finite resource and its price will increase as more of the resource is used up, unless it falls out of favor when a new fuel takes its place. This price increase serves to preserve the asset. It keeps fuel around for those who value it enough to pay for it.
Consider the state-run fuel industries in China and Venezuela. Because prices are capped in those countries, the market can't function freely and information regarding scarcity isn't carried through price (hidden info, just like subsidies. In fact, fuel is subsidized in both China and Venezuela). Thus, as supplies run low, no indication of that is transferred to the market (prices are kept artificially low), and consumption continues or increases, leaving less for everyone else.
I remember a gas station in my hometown that raised its gas prices to $3.50/gal on Sept. 11, 2001, when everyone else was raising prices. All other gas stations were at $2.75 (the normal price was $2.09) and running out of fuel – everyone and their brother was buying fuel, even if they didn't need it, and filling up numerous gas cans. Everyone thought there was going to be some shortage of fuel. I happened to need fuel that day to get home – I left the house with the "low fuel" light on and needed to travel 20 miles to get back! People were screaming at the top of their lungs about price gouging at the $3.50 station, but I'm glad they raised their price – nobody rushed that station like they did the other stations and that left enough fuel for me to buy gas and get home. I was willing to pay extra to get home. The other people weren't willing to pay extra for their lawn mower fuel. High prices got me home on 9/11.
Melvin Waldron, CGCS said: Then why does a price rise $.28 cents per gallon? That is certainly more then .02 cents, you'll need to educate me on that one, as far as the gas taxes, I know in our state it is required to go to mainaining our roads and bridges, funny with the higher gas prices not as much gas is being sold, which means lower tax revenues, less repairs, more unemployment. I don't have much of a problem with our state sales tax, I have budgeted for it, and I know it is being used to improve the roads I use.
Why did the price rise 28 cents? I don't know. But, I'm amazed at the how upset people get over such relatively small amounts. Sure, 28 cents on a $2.89/gal price is a 9% increase, but what did it cost you for the tank? My truck has an 18 gal tank. If the tank is totally dry, I've spent an additional $5.04 on that fill-up! That's what some people pay for coffee every day! Its also the cost of a cheap pack of cigarettes in most states. I usually full up three times a month, which puts my additional cost at $15.12/month – the equivalent of two fast food lunches!
I don't like seeing gas prices go up, but to be realistic, this increase doesn't carry much of an impact for most people. Most of us uselessly waste more than the monthly increase each week!