When I was learning to drive, I would often look for the cheapest gas prices in town. (This being a very small town, my options were pretty limited — I think 3.) My father derided my attempts, telling me that “gas is the cheapest thing you’ll ever put into your car.”
I promptly scored no points with my father by immediately mentioning two exceptions: washer fluid, and the girl three houses down the street. That cost me my car privileges for a week.
But that particular bit of advice has stuck with me ever since, and I’m reminded of it every time I see gasoline prices take another jump. I remember when they soared above $1.50, closed in on $2.00, flirted around $2.40, shot up to $3.25, and dipped down to $2.70 recently. (I’m using the lowest I can recall from each cycle.)
I’m put in mind of a bit of economic analysis I saw a while ago: adjusted for inflation, during the recent gas price surge, gas barely brushed against the previous record high. And now it’s dropped down again.
It’s my belief that it isn’t the price of gas that is the real problem, but the speed at which they shot up. It was a shock to our systems, a sudden assault on our wallets that none of us could anticipate. (For one, I might’ve considered repairing my little four-cylinder instead of moving up to a 4,000-lb. White Beauty with a big, powerful, multi-valve V-6.)
I also heard a guy who heads up the gas station owner’s association in Massachusetts talking about gas prices. He said that he and his colleagues weren’t making any money off it. Their contracts with their suppliers dictate their gas prices — it’s fixed at a certain amount above their costs, with an average of $0.10 statewide. So when gas prices went up, they didn’t see a corresponding rise in their income.
Further, in some cases, they often made less. On credit card purchases, the credit card companies make a set percentage off the transactions. As the total gas sale increases, so does their cut — but the gas stations’ profit doesn’t. In some cases, he said, some stations stopped making any money at all off gasoline.
So, where are the profits going? According to others, like Bill O’Reilly, it’s the oil companies. I’ll leave others to do that kind of digging; I don’t have the resources or the knowledge of the petrochemical industry to do a proper job.
I just know that whoever’s making scads of money, it ain’t the guy on the corner. And the price of gas is coming back down, from BRUSHING with record highs. Speaking as someone who doesn’t have a great deal of extra income, it’s been painful for me.
But I just can’t go beating up the guy at the gas station. I’ve never liked shooting the messenger.