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Should fuel prices be regulated?

Discussion in 'The Okie Corral' started by JW1178, Aug 30, 2012.

  1. JW1178


    Jul 17, 2009
    The price of oil does increase and decrease due to demand, we know that, however, often gas prices will jump due to speculation of an event such as this storm Issac. The price of fuel jumped radically because of Issac before the storm even hit, and now here in GA we are almost $4 a gallon. IS there a shortage of fuel or oil? Is there an increased demand? No, but the speculators are buying in making fuel prices increase.

    So of course fuel prices would still rise and fall, but it would prevent the spikes that seem to happen for no reason. Prices are quick to rise, but slow to fall, it just doesn't make sense.

    One former gas station owner explained to me that what happens is that the cost of fuel will rise, so you have to immediatly increase your fuel cost so you can buy the next shippment of fuel, but when the fuel price drops, you still have to sell off that fuel that you paid the higher price. So, I see a large margin of profit there that is border line price gouging. I'm glad for companies like Quick Trip and Race Track that are putting these mom and pop shops out of business and keeping the prices somewhat more reasonable due to their buying power.
  2. airmotive

    airmotive Tin Kicker

    Nov 19, 2007
    Debris Field
    I don't think I would be too far off if I said the fuel/oil/gas industry is one of the most complex of all human endeavors in all of history.

    When you see a price rise or drop, it's easy to pin it on some faceless speculator....but there is SO much going much science, engineering, forecasting, modeling....and you haven't even sunk a hole in the ground yet. The retailers don't come in until the end and I seriously doubt a single one of them has a clue where the gallon of gas actually came from. Nor do they care.
    If they can get an extra .05 per gallon on that 18,000 gallon truck that just unloaded, daddy gets a new set of tires for his truck. (Unless the next truckload of 18,000 gallons costs .25/gallon more for the retailer to buy.

    Leave it a lone. The market will work itself out.
    Last edited: Aug 30, 2012

  3. Atlas

    Atlas transmogrifier

    Oct 1, 2001
    north of the equator

    Very, very bad concept.
  4. ChuteTheMall

    ChuteTheMall Witless Protection Program

    No, if you want to lower the price of gas just switch to the metric system:

  5. frank4570


    Jun 25, 2004
    No they should not. We should have to pay just as much as the rest of the world does.
  6. Never Nervous

    Never Nervous

    Aug 18, 2009
    Metro ATL
    I think this is a good answer. As a country, we waste more natural resources than anyone else and we pay less than anyone else while doing it. I think the plan is to have everyone pay the same amount for fuel eventually.

  7. I don't think they should be "regulated" per se as we saw controls during wartime. But I'm sure not against laws to take most of the speculators out of the market. I resent price fluctuations due to the fact some guys hedge fund is trying to get a 20% return. So, take the financial boys off the table.

    If you want in to trade in oil futures, then be an acredited industry (airline/petro-chemical/misc manufacturing etc). Otherwise, you have to front 100% of the contract/future purchased and then get taxed to the tune of 85% on any profits. No loss carry-overs either.

    Of course they could move operations / investments overseas
    (London/Rotterdam etc) markets. If so, nail repatriation of the funds to the US invested in oil futures overseas to the tune of 90% - make it as confiscatory as possible to drive financial speculation out of the system.

    Make oil prices a true dependent on supply (ie what sources of available oil there is) vs demand.

    I'm sure everyone remembers the runup of oil prices to $140/bbl in 2007/08. Then, within 2 weeks as the economies of the world weakened, it crashed to $60-70/bbl. Did we all of a sudden find huge oil reserves that wiped out the gains?

    Nope - it was the speculators playing games. I say make those games more expensive and difficult so that an indispensable commodity isn't bid up in price crushing the rest of us.
    Last edited: Aug 30, 2012
  8. Atlas

    Atlas transmogrifier

    Oct 1, 2001
    north of the equator
    On what do you base that assertion?
    Why should we be required to pay anything other than what the market (here, in the U.S.) demands?
  9. Mabye not regulated but a good start would be to drop the sales taxes,yes taxes,don't we get taxed enough as it is.

    2 taxes on the same product is like extortion,it's not like the Government(state,Federal) is going to do anything good with our tax dollars.Fund war,fund welfare,fund link,fund all sorts of freebies that we don't want in the first place.

  10. Fracball

    Fracball Authorized User

    Nov 25, 2006
    The State Below OKLA
    If it's regulated the costs associated with exploring, developing, refining and transporting would need to be favorably regulated too, which doesn't sound feasible.
  11. Halojumper


    Mar 18, 2005
    Aurora, CO
    What do you mean by gouging? Usually when people call something gouging it means they are just unhappy with the fair market price. Conditions, including weather, often make that rise.
  12. Atlas

    Atlas transmogrifier

    Oct 1, 2001
    north of the equator
    It doesn't sound feasible because it isn't.
  13. larry_minn

    larry_minn Silver Member Millennium Member

    Dec 16, 1999
    Heck no. Plus they should raise state tax on gas. Government messes up most everything they try to fix.
  14. Flying-Dutchman


    Oct 10, 2007
    NO! Regulation leads to shortages, rationing and lines at the pump.

    Anyone remember the gas crunches in the 1970’s?
  15. SRS


    Jul 24, 2002
    Northern VA
    No. It's troubling to me that anyone would even suggest otherwise.
  16. Z71bill


    Feb 19, 2007
    How you going to define FAIR PRICE?

    Before someone can buy oil or gas (in the cash or futures market) someone else must sell it. This negotiation between two parties determines the market price.

    Which party is the spectator?

    The buyer or seller?

    If you have something (anything) - and I want to buy it -

    If you want $5 for it and I think it is only worth $3 should you be forced to sell it to me for $3- Because yesterday you sold one like it for $3 to someone else?

    If you think people make easy risk free money speculating in oil & gas - why don't you give it a try - my prediction is 1 seconds after you put youir dollars on the line you will figure out it is not risk free.
    Last edited: Aug 30, 2012
  17. aquanomics


    Jan 6, 2007
    Lost Wages, NV
    What are you, 12?

    Gasoline was $0.91 per gallon in my town in 1999, when oil was less than $10 / barrel. Where were you then, when Exxon was bleeding revenue?

    Now oil is hovering around $100/B and gas is $3.65/G. What changed, China?

    No. Producers can't drill where they know they can find oil and THE FED has inflated commodities with debt monetization (look that up).

    So you want the same government that caused the problem to solve the problem.....

  18. paperairplane


    Oct 5, 2008
    I would like some more transpearancy from the gasoline wholesalers. I believe there is collusion and price fixing at that level.
  19. AZ Jeff

    AZ Jeff

    Aug 20, 2003
    middle of AZ
    No kidding. Any idiot advocating price controls on motor fuels obviously either was not alive before 1982 or slept through that time.

    That little period was a CLASSIC example of economics in action!!!
    Last edited: Aug 30, 2012
  20. JW1178


    Jul 17, 2009
    I agree with this 100%.

    A few people are making big bucks and it not only is costing the most of us tons of money, but it hurts the economy. Take the buying/selling of futures out of it, you buy it, that means you have to go actually physically purchase it. Tired of people able to use their money to drive up prices and make more money, they do nothing for the economy but take money out of it for their own personal gain. Eliminate these middle men, make them work for a living like the rest of us.