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Can someone please explain the logic (if there is any) of fuel prices?
Written by Jason Dimitrov Subject: Economy - Economics USAIn Phoenix, the record high average for unleaded fuel was around $4.00-$4.13 per gallon. That was at the time US cruel was trading at its all time high of $147.27 per barrel. Since then, the price of US crude has dropped more than half. So wouldn't you expect the price of fuel to drop the same amount? According to my logic, we should currently be paying $2.00-$2.07 per gallon. Does anyone understand why in reality this is not the case?
Click here to see Phoenix historical fuel prices. Directly above the chart you can select different time frames such as the last 18 months, 1 year, etc...
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4 Comments in Response to Can someone please explain the logic (if there is any) of fuel prices?
What Oil tanker will come here if the dollar goes the way of the 1920s German Mark? We import 65% of our Oil.
There are only a few substitutions for gasoline. Natural Gas, and Ethanol, from sorghum, fodder beets and twenty better sources than from corn.
Leftovers can feed livestock and other critters, even You! It's all in "Alcohol Can be a Gas" by Blume. Check out Your library.
In sunny Tucson, Gasoline is already well under $2.99 a gallon, and may hit $2.89 by Election day.
Gasoline is a waste product. It's what is left over after all the valuable things come out of a barrel of oil. Many products coming out of a barrel of oil generate multi hundreds, even $2,500 a barrel in profit.
In many areas of the world You would be paying $8 to $15 a gallon. In the U.S. Big Oil gets over 4 dollars a gallon in tax subsidies and it seems the price of gasoline is where Big Oil is giving something back. Be glad that You are only paying under $4 a gallon.
Of course, were this Country really open to competition in energy choices, Methane (NG) and Ethanol would be king, were it not for the tax subsidies Big Oil gets.
Think about that, next time John Stossel, or Walter Williams rants about the 51 cent a gallon subsidy ethanol gets. Don't dig too deep, or You will discover the Foundations they got their start with are all supported by Big Oil, or friends of Big Oil. They might have actually got their start in media because of such ties.
Your Income Taxes guarantee the Grand Illusion that You are getting a great deal on Gasoline. You and other Americans can pull away from the pump, knowing that by comparison, America is so much more Good, Grand, and Magical. Something vague about the American Miracle. Pat Yourself on the back. Dream on.
Now that You know, Don't spoil it for others and embarrass Yourself by admitting You are giving Corporations cheap gas while Your Income Taxes are picking up the slack.
It isn't good for the Game, as Mark Twain would say.
The gas prices that you see on every other street corner is a "number" that is one of the many variables used to influence the public mood and opinion. Just the way it is.