It isn't competition when only four companies can reap the benefits. There is no way any upstart company can build an oil refinery, let alone offer cheaper gas. It is in the best interesest of the oil companies to set prices as high as we will pay. As long as they do that, and they don't undercut each other, they get the kind of profit they have.

 

And as far as your local station goes, each station owner has a mild amount of discretion for prices. True competition would involve new companies offering even lower prices, forcing the general price of gas down, not just a 10 cent deduction every now and then.

So four different companies offering the same product is not competition. Okay. And as the young kids say, whatever.

 

I would assume that there is no competition than for broadcast television since there are only five broadcast networks. Or is five competition?

 

Or there must not be real competition for the White House or Congress seats since there is only two main parties.

 

Also, I will let the four men who run the only four towing services in my county know that they DO NOT compete against each other because 4 companies offering the same product and only those four companies reaping the benefits of the sale of that product is not competition.

 

 

No competition is I have ONE CHOICE for my electric company. One that is it. No competition.

You've convinced me - the oil giants are our friend, and we should feel guilty because we didn't eliminate their tax burden completely. I will try to contact the people that teach economics at the various universities around the country, to let them know that they don't truly understand how money is raised by the levying of taxes.

 

 

Frances

Well there's your problem. Nothing but a bunch of commies at the universities.

Well there's your problem. Nothing but a bunch of commies at the universities.

You think the commies are upset as they have been overtaken by terrorists as the bad guys of the world. They used to be someone. The evil of the world. They had a place in the pecking order. Now they are just hasbeens overtaken by the young terrorist whippersnappers.

 

Remember the good old days that world domination was about taking over a country financially and politically through communism?:sssh:

Every generation has a Boogey Man. The US wants the people to live in fear, bottom line. We live in a time that our freedom of choice is being taken away. Just because we question the government does not mean that we are less patriotic. Government needs cleaned up from top to bottom. I went back to school a few agos, I have been out for over 20 years. It was unreal what secular universities are teaching this generations of kids...2 words of almost every teacher was their underlying theme...are you ready?....

1. Acceptance

2. Tolerance

 

Those two words and the practice of them is killing this great nation.

So four different companies offering the same product is not competition. Okay. And as the young kids say, whatever.

 

I would assume that there is no competition than for broadcast television since there are only five broadcast networks. Or is five competition?

 

Or there must not be real competition for the White House or Congress seats since there is only two main parties.

 

Also, I will let the four men who run the only four towing services in my county know that they DO NOT compete against each other because 4 companies offering the same product and only those four companies reaping the benefits of the sale of that product is not competition.

 

 

No competition is I have ONE CHOICE for my electric company. One that is it. No competition.

 

If Exxon lowered all of their gasoline to $1 a gallon would they sell more gas?

So four different companies offering the same product is not competition. Okay. And as the young kids say, whatever.

 

I would assume that there is no competition than for broadcast television since there are only five broadcast networks. Or is five competition?

 

Or there must not be real competition for the White House or Congress seats since there is only two main parties.

 

Also, I will let the four men who run the only four towing services in my county know that they DO NOT compete against each other because 4 companies offering the same product and only those four companies reaping the benefits of the sale of that product is not competition.

 

 

No competition is I have ONE CHOICE for my electric company. One that is it. No competition.

 

The difference is that there isn't a law in your town that prevents a new towing company from entering the market. There is no law to stop a new electric company from springing up. The fact that there are four oil companies doesn't mean anything. What matters is that four is all there ever will be, there is no reason for them to compete if it is a closed market. If there were as much competition as you claim then why have prices gone up so dramatically over the last few years? And I would hardly reference the two party system as a model of an open market.

Okay, I give.

 

After 3,951 posts, it is obvious that you are not going to acknowledge that paying a reduced rate on their raw materials is a tax break.

 

If you re-read posts #24, #25, and #30 you will see that I have already referred to them as tax breaks. If you re-read post #46 you will see that I said that the discussion was about the rate at which Exxon paid taxes. I even emphasized the word rate.

If Exxon lowered all of their gasoline to $1 a gallon would they sell more gas?

Revenues would be up. I would hazard a guess that a loss would ensue instead of a profit since their costs are greater than $1 a gallon.

 

Basic economics teaches that increase revenue does not directly correlate to increase profit.

The difference is that there isn't a law in your town that prevents a new towing company from entering the market. There is no law to stop a new electric company from springing up. The fact that there are four oil companies doesn't mean anything. What matters is that four is all there ever will be, there is no reason for them to compete if it is a closed market. If there were as much competition as you claim then why have prices gone up so dramatically over the last few years? And I would hardly reference the two party system as a model of an open market.

What is the law that would prevent a new oil company from springing up?

 

Costs have gone up while production has been limited since there has not been a new refinery built since the 70's (from my understanding basically because of EPA guidelines on the building of new refineries) and DEMAND HAS SOARED. The public doesn't seem to care as they keep buying the HUMMERS with the 11 MPG.

Revenues would be up. I would hazard a guess that a loss would ensue instead of a profit since their costs are greater than $1 a gallon.

 

Basic economics teaches that increase revenue does not directly correlate to increase profit.

 

Well, you read a little more into it. If they charge $3.00 a gallon, and they make a profit of $2.00 a gallon, then if they lowered their price to $2.00 a gallon, they would need a lot more people to buy it to keep the same profit (I completely made up all of those prices). Gas stations don't have enough pumps to accomodate a dramatic price drop. Even if they kept the price they charge well above their costs while below their competitors prices, not enough people would be able to buy the gas to bring in a profit equal to that of the higher prices. It is in the best interest of each oil company to keep prices as high as possible. Self-regulation and the idea of "competition drives prices down" is the hallmark of a free market system. This is not the case here. If a group of investors were to get together and open an oil refinery, they could immediately begin selling gas at a much, much cheaper rate since they are smaller, have less expenses (your point about revenue, they would need less to make a profit), and they do not have to sustain the profits the others do. This is competition, and this would drive prices down.

Also, gas is an "inelastic" commodity. You HAVE to have gas to get to work, pick up the kids, get groceries, etc. There is NO alternative. You may say ride your bike more or something, but that is not a viable alternative. An alternative would be electric cars, solar power, etc. Since the companies who own the oil refineries have a commodity that ONLY they have and there is no alternative then they can charge higher prices (and by higher prices I mean prices as high as we can pay), which their record breaking profits are a testament to. Supply and demand doesn't apply here. There is always going to be demand. Demand may fluctuate in the summer due to more driving, or when a disaster like Katrina hits and makes it impossible to get the gas out, but these instances have proven to only favor higher prices. There is never an equal shift in prices when the disaster is over or when the season changes, prices may fluctuate but they usually stay a little higher. The only variable is supply which is dictated by the amount of oil each refinery refines (which I'm not sure if any of them even refine at full capacity - they don't have to) and OPEC, the most anti-capitalist organization out there.

When I go to get gas today, I'm going to drive by four gas stations charging $2.19. Where is the competition?

Demand does play into it when this country continues to purchase cars that get 10-15 MPG. I have a family member that lives 8 miles from work and he says it takes his big 4X4 truck, one gallon to get to work and one gallon to get home.

 

Each and every person like him could change demand by changing the type of car they drive.

 

THAT would be the first and best move by consumers in this gas price situation. By a car that when you put 15 gallons in the tank, you are going to be back in two days. How about instead of driving 15 miles into town to get a gallon of milk, waiting until you actually have to go to town.

 

Or how about not letting your teenager cruise around town and run an entire tank of gas out. Or drive past any HS parking lot and count the number of cars in the lot that get horrible gas mileage. Or simply the number of cars.

 

I contend that there is not a gas price problem in this country because our choices in what we drive are part of the problem and for the most part our society is not changing their buying preferences.