F... gas prices

[JoeRedskin]

Originally Posted by Schneed10

Can I ask you something? Why is it wrong for companies like Exxon to make boatloads of money?

B/c they're making at my expense [j/k].

[Schneed10]

Originally Posted by JoeRedskin

B/c they're making at my expense [j/k].

Even though you're joking, that's pretty much the crux of their argument.

Why do middle class citizens (and poor and affluent citizens for that matter) have more right to pay low gas prices than Exxon does to charge higher ones?

[JoeRedskin]

Originally Posted by Schneed10

Even though you're joking, that's pretty much the crux of their argument.

Why do middle class citizens (and poor and affluent citizens for that matter) have more right to pay low gas prices than Exxon does to charge higher ones?

Well, I think oil is one of those resources where gov. may have some legitimate involvement (not just in taxing its use). To the extent there are monopolistic tendencies or market collusion among the companies, these should be regulated.

I haven't seen any allegations of collusion among oil companies other than "they are charging more, therefore they must be colluding".

In order to work, the free market does require everyone to "play fair", and govt. can legitimately investigate the oil companies actions to determine if they are indeed doing so. I agree, however, that the mere fact that they are making profits does not, in and of itself, mean they are cheating the system. (In a fight, does the fact I won mean I started it?)

While I haven't fully thought through this next point, given the nature of the US economy, some level of govt oversight of oil/gas prices may be appropriate. The US economy, given the size of the country, is reliant on the transport of items over long distances. Radical increases in oil/prices effect markets well beyond oil/gas as an individual commodity. In this way, and even though sold through multiple companies, oil seems to me to have similar market characteristics of a monopoly (i.e. electric, phone and BGE). In such situations, even if no collusion is shown, govt has a role in ensuring that the pricing and profit levels are "fair". (I guess, however, that if Exxon attempted set its price way over market, then everyone would buy from one of the other providers - That appears to me to be the crux of the question - is there enough competition between oil providers to ensure that the price is a true market price).

Also, I think 70Chips point of regulating speculation in the oil/gas market is appropriate. Again, given the effect that increases in oil prices have on other markets, it seems to me speculation in the oil market should be pretty much prohibited. Removing specualation from the picture may ease the growth, hopefully create a more straight forward "supply/demand" equation, and limit the effect of radical price increases on other markets.