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originally posted by: intrepid
Well here he go again with Harvey. Gas prices have gone up 30% this week. $1.30/liter. That's $5.20/gallon. It happens every time there is a natural, or not so natural, disaster in certain areas. The thing is that the gas is there. It was there, is here and will continue to be here. There is no shortage. So why the ludicrous price hike?
I understand that Houston refines about 25% of North America's gas but there are other ares that also refine. As I've said, there's no shortage of oil to be refined and we aren't scrambling to find fuel to put in our vehicles. Prices in other markets go up when there are shortages. Not here though.
Gas prices are directly linked to inflation. Damn near everything is transported by fuel. The price goes up and that increase is passed on to the consumer. That means less buying power as fuel is a necessity in today's world. Weaker buying power means fewer goods purchased which affects producers. This also gets passed on to the consumer, as well as the employees. High gas prices thus weaken the economy.
So why does this happen? Pure gouging of the consumer? A "tax" to fix the problem that arose? I don't get it. Maybe logic doesn't apply here...or I'm missing something.
DeHaan predicted that the storm would add about 15 cents per gallon to the cost of oil; Cinquegrana put the increase at 5 to 10 cents. By comparison, Hurricanes Katrina and Rita, which struck Louisiana and Texas in 2005, caused a 40 cent jump in gas prices.
Another factor cushioning the blow somewhat is that the country's production of gas is near a 10-year peak, with oil stocks last week reaching 463 million barrels.
on average, between 2006 and 2010, the largest oil companies averaged a profit margin of around 6.5%. This pales in comparison to profit margins in just about every other industry. The pharmaceutical industry, for example, routinely averages a profit margin of about 16%. The soft drink market is even more lucrative.