Tuesday, April 18, 2006

Gas Gouging

I don't think there is a motorist in America who doubts that gasoline companies are manipulating and overpricing the consumer. But one aspect of their design seems really curious to me. I am referring the the incremental increase of fuel prices from regular to premium to super premium. For about thirty years now, premium grade at the pumps has been priced at ten cents a gallon more than regular, and super premium at ten cents above that. Regardless of the cost of regular, it's always ten cents a grade up.

Obviously, this pattern has nothing to do with the cost of production and delivery of each grade. A few years ago, at $1.29, $1.39, $1.49 premium cost 8% to 16% more than regular. Now is costs about 3% to 7% more. Quite a saving for premium guzzling vehicles. But why? Premium, by its special ingredients and limited distribution should cost much more compared to regular, as it did in earlier days. But it doesn't because it doesn't suit the petroleum industry's marketing strategy. Forget about the rising price per barrel and refinery costs. Gasoline can be delivered at great profit to the oil companies and pumped into our cars at easily less than half the current pump prices. But, less face it, the oil and automotive industries own our souls. And they know it.

And now for my prediction. If I have noticed this revealing pricing discrepancy, you can be certain that others have also. Among those others are the oil barons. If any among them reads this blog, it is going to cast you premium gas buyers some big bucks. In order to protect their semblance of product value the major oil companies will have to change their pricing policy. My prediction is that you will soon see gas station signs showing a greater gap between regular and premium prices. Premium pumpers will be required to pay a bigger share of our gas cost. And we regular pumpers will get a little ease from the next round of gas gouging.

2 Comments:

At April 19, 2006 6:07 AM, Anonymous julieme said...

last paragraph.."cost" not "cast"

 
At April 23, 2006 10:19 AM, Anonymous Anonymous said...

Even in Nebraska it's been going up 10¢ at a crack, just days a part..
the range is between $2.85. and $2.99 for regular, except for the gas stations by the interstate, and they are usually even higher..

I try to get as good mileage as I can, using lower speeds, and better habits in general.. I seem to stand alone in my family with my way of thinking..
I want to choose where I blow my money.. And I prefer not to give it to the powers doing the nasty deed..

I heard gas is 12¢ a gallon in Venesula, but I wouldn't want to live there..

Seems to me someone here can and should do something..

M.E.

 

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