May 03, 2006

Gas Prices

Well, gas around the Citadel is averageing at around $2.84 a gallon, with only the prospects of furthur rises in sight. The chickens of inane past policies have finally come home to roost, and our current crop of polititians are arguing only over more of the same.

The latest proposal from Dennis Hastert includes a $100. "rebate" to be given to every family to "help them over the hump". EXCUSE ME?!? Given the increase in the costs of all goods due to increased costs of production and transportation absorb that paltry amount faster than a drop of water falling on a hot rock under a desert sun. It's an insult to any logicaly thinking person.

Another part of the proposal resolves to change the tax structure on oil company reserves; effectively imposing a huge tax increase on those companies....and increasing the cost of doing business lowers gas prices at the pumps how? It's bad enough that the general populace should be so ignorant of economics, but for a supposedly highly educated man to pursue such a course is
bordering on the criminal.

Prices are a function of supply and demand, and for at least the last twenty years, the government has fostered policies that served to limit domestically produced supply and making us hostage to the vageries of a volatile Middle East and/or South America.

The Politicoes are trying to blame the oil companies for "gouging", citing "record profits"....and with an uninformed populace, they are getting away with the scapegoatism yet once again. The numbers on the profit side of the ledger do look high, but when you delve into it and determine the profit margin after expenses, you will find that oil is among the lowest returns on investment of any commodities. And when you realize that the GOVERNMENT'S
"profit" from a gallon of gas in the form of taxes is between four and five times higher than the profit realized by the companies themselves, we need to ask ourselves just WHO is doing the gouging.

Government has restricted the oil companies from developing most areas of domestic production; made it economically impossible to increase our refining capabilities for the last twenty two years,mandated "special blends" that increase the cost to the consumer and have made the costs of marketing and distribution much higher than need be.

While some practices of the oil companies are reprehensible, what the government has done is even more so.

Posted by Delftsman3 at May 3, 2006 09:12 PM | TrackBack
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