<Two thoughts for a quiet Sunday The Oil Drum Uh Oh...>

27 comments on How much is too much for gasoline?

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throwaway92614 on October 17, 2005 - 2:52pm Permalink | Subthread | Comments top
Just a quick rant: This quote is so asinine and irrelevant, and yet so pervasive in the discussion of energy:

  "They think $2 is about right."

Um, no, sorry, BZZZT! Try again. The price that the gasoline IS SELLING FOR RIGHT AT THIS MOMENT is what the collective market "thinks is about right."

Your price fantasies are utterly irrelevant. Have a nice day.

(Rant over now; thanks!)

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Bubba on October 17, 2005 - 4:10pm Permalink | Subthread | Parent | Comments top
Although I have some sympathy for this "rant", I think you are taking the comment out of context.  What something sells for in the global marketplace (in this case on the NYMEX), what an end consumer in various places has to pay per gallon, and what people FEEL like they should have to pay (or at least tell a pollster what they should have to pay) are 3 entirely different things.

In the article where is says "They think $2 is about right.", we are talking about the third situation.  

What I take away from this article is that almost everywhere people think that gasoline should sell for something less than they are actually paying for it at the time.  In the US $3.00/gallon seems exhorbitant because we are not used to it and we are used to a lifestyle that relies on 2.00/gallon gas.  In the UK, people are used to paying much more, and their lifestyle is not as dependent on cheap gasoline.  However, they would still like to have their gas cheaper.

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throwaway92614 on October 17, 2005 - 7:52pm Permalink | Subthread | Parent | Comments top
Thank you for replying Bubba, but I stand by my rant: this sort of statement of price desire contains ZERO information and is misleading to the discussion of energy usage.

Come to think of it, I feel that I should make $200/hr, because that "feels right." I work my ass off, why not?

I also feel that my apartment rental should be reduced to $50/month, because after all, $50/month "feels about right" to me, and I bet if I asked every apartment owner in my town, 100% of them would agree! Wow, make it so!

The way a market works is that there is ALWAYS a desire to pay less than something is selling for, so saying "We feel $2 is right" means nothing.

If instead you say "We budgeted $2/gal for gasoline," that is an entirely different statement, one we can discuss. I would say to that "Well, you better learn to budget with some flexibility!"

In contrast, if I budgeted $10/gal for gasoline, I could say "Hey, I'm doing pretty good, it's only $3/gal... look, I'm saving $7/gal!! I am brilliant!!!"

Either way, the reality is what the market price is, end of story. Everything else is just wasted bytes and hot air, much like my post right here. :)

Cheers!

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coffee17 on October 18, 2005 - 9:22am Permalink | Subthread | Parent | Comments top
Actually, the price should be higher. The US is subsidizing the price of gasoline with free warship escorts to guard the spice^Woil. I wouldn't be surprised that there are other non-military ways that make the gas cheaper in the US than it otherwise "should" be.

Additionally, there is a lot of lack of information regarding the supplies of oil. If there were well by well production numbers for any country the US did business with, as well as independant analysis of reserves, that would greatly affect price. If it turns out that PO will be occuring before Yergin's 2020 (and especially if it's in the 2010 time frame) futures would shoot up, and that would affect the price today. Or alternately if it turns out that we are awash in oil, that could return us to $20/bbl oil.

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Gloomy on October 18, 2005 - 10:01am Permalink | Subthread | Parent | Comments top
What about the $200-300 billion per year spent on construction of roads and highways? What about the billions for road maintainance, public parking lots, airports on public land etc. etc... In reality the real price of transportation is paid by everyone paying taxes no matter how much he/she uses the transportation network which is classic case of unfair redistribution of income by the government. The real price of gasoline should be around 10$/gallon including these costs but noone will do it because our political system does not permit it to happen.
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27 comments on How much is too much for gasoline?

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