I had to travel by train for a few days. Yesterday when I used it I noticed that it had more passengers than usual. Of course, ridership is helped by the reduction of coronavirus cases (or the impression that the pandemic is going away). I think the most important reason, however, is the price of gasoline. When was the last time you put gas in your car? If you’re trying to forget, I’m sure you’re not alone.
There are many things I do not understand about the functioning of a free economy. One of them is how the price of gasoline is determined. Theoretically, at least, from what we were taught in schools, the price is determined based on supply-demand pressures. Is that not right?
But does this really apply in the case of setting the price of gas at the pump? I do not think so. Most importantly, President Biden does not seem to believe that either.
“Oil prices are decreasing, gas prices should too,” he said on Twitter, adding, “Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.”
You will have noticed this also: when a major negative event is announced, i.e. the war in Ukraine, the next morning the price of gasoline soars. But how can this be when oil reserves around the world have not yet been affected?
On the other hand, when conditions improve, it often takes weeks to see reductions in the price of oil at gas stations. Is this not a case of the exploitation of consumers?
There is another uncontrollable factor: Oil-producing countries. One would expect that at least in cases of significant crises – as is now the case – each one would undertake to bear some of the weight.
The opposite is true: they take advantage of the opportunity to raise tens of billions of extra dollars.
Saudi Arabia, the world’s largest oil producer, has found an excuse for not taking responsibility for the crisis, saying it “will not bear any responsibility for any shortage in oil supplies to global markets in light of the attacks on its oil facilities,” which are affecting “the kingdom’s production capability and its ability to fulfill its commitments.”
It argues that, “the international community must assume its responsibility to preserve energy supplies.”
Note that the young brutal prince who actually rules this kingdom refused, according to the WSJ, last week to even speak with President Biden…
However, a senior U.S. official has confirmed that the United States has provided a significant number of Patriot missiles to Saudi Arabia in order to repel rebel missile attacks.
Brent crude was at $112 a barrel on Monday, down from $140 earlier this month. Did you see any reductions at gas stations?
So, the exploitation that is happening to the detriment of all of us is both overt and enormous. One wonders why the oil-importing countries are not prepared to address the blackmail that they are subjected to by the oil-producing countries and the companies that deliver it to us…