Newsstand - U.S. to Probe Gasoline Prices

(Impacting flyers who rent cars and the decision to fly or drive...)

WASHINGTON — Federal authorities will investigate the gasoline price spikes that angered motorists across the country, Energy Secretary Spencer Abraham told Congress on Wednesday.
Last month's run-up in pump prices "struck me as being unusually large and in need of greater explanation," Abraham said at a Capitol Hill hearing.

http://www.latimes.com/business/la-fi-gas4sep04222418,1,950581.story?coll=la-headlines-business

I would hope they do look at it. I watched the price at my local station jump 12 cents in one day. 6 cents higher when I went to work, another 6 cents higher when I got off work.

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"All life is a concatenation of ephemeralities" - Alfred Kahn, American economist

That's nothing. In Northern Indiana where I live the price jumps 20 cents in a day all the time.

I have been told that we have the cheapest gas in the country right now. $1.47 for reg can be found here in S.C.

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"All life is a concatenation of ephemeralities" - Alfred Kahn, American economist

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by scrog:
That's nothing. In Northern Indiana where I live the price jumps 20 cents in a day all the time.</font>

I watched it go from 1.68 to 1.95 on a single day. Now the cheapest I can find is $2.05, with stations in more "remote" areas charging $2.25

It'd be one thing if that extra 40 to 60 cents were going to roads or transit, etc., but unfortunately its going to help the bin Ladens and other Saudis raise more well-adjusted children!

Someone definitely needs to look into gas prices. They're way too low. To much subsidizing and not enough taxation.

d

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by HeHateY:
I watched it go from 1.68 to 1.95 on a single day. Now the cheapest I can find is $2.05, with stations in more "remote" areas charging $2.25

It'd be one thing if that extra 40 to 60 cents were going to roads or transit, etc., but unfortunately its going to help the bin Ladens and other Saudis raise more well-adjusted children!</font>

WOW $2.05!! Is that for Reg or Premium? I have seen premium for $1.79 but nothing like what you describe.



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"All life is a concatenation of ephemeralities" - Alfred Kahn, American economist

The prices here in California are bad enough to make you wanna cry. On my way home yesterday morning, though KCBS 740 San Francisco was reporting that some Democratic Senator found out Saudi's were holding out and said we should either tell them to pump more, and pump more now, or, go into the strategic reserve. Either way, over $2/gal. in the US is unquestionably unacceptable--period.

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Best regards,
Dairenn Lombard
Los Angeles, CA

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:
Someone definitely needs to look into gas prices. They're way too low. To much subsidizing and not enough taxation.

d</font>

http://www.flyertalk.com/forum/thumbsup.gif http://www.flyertalk.com/forum/thumbsup.gif

I have been in favor of much higher gasoline prices for many years. The stuff is just too cheap.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FWAAA:
&lt;IMG SRC="http://www.flyertalk.com/forum/thumbsup.gif"&gt; &lt;IMG SRC="http://www.flyertalk.com/forum/thumbsup.gif"&gt;

I have been in favor of much higher gasoline prices for many years. The stuff is just too cheap.</font>

Do you own shares in any oil companies http://www.flyertalk.com/forum/wink.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:
Someone definitely needs to look into gas prices. They're way too low. To much subsidizing and not enough taxation.

d</font>

Got to ask, how many additional dollars, over and above the taxes imposed upon a gallon of gas, have you voluntarily donated to your various taxing authorities this year?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:
Someone definitely needs to look into gas prices. They're way too low. To much subsidizing and not enough taxation.

d</font>

Got to ask, how many additional dollars, over and above the taxes imposed upon a gallon of gas, have you voluntarily donated to your various taxing authorities this year?

Please also see:

http://www.flyertalk.com/travel/fttravel_forum/Forum44/HTML/006585.html

http://www.flyertalk.com/travel/fttravel_forum/Forum44/HTML/008960.html

http://www.flyertalk.com/travel/fttravel_forum/Forum44/HTML/006802.html

Supply & demand -- if people really wanted lower prices, they would use less fuel (i.e., stop buying SUV's, pickup trucks, sports cars, etc.)

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:
Someone definitely needs to look into gas prices. They're way too low. To much subsidizing and not enough taxation.

d</font>

Spoken like a true public transportation customer. http://www.flyertalk.com/forum/wink.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by NickP 1K:
Do you own shares in any oil companies http://www.flyertalk.com/forum/wink.gif</font>

Yes. http://www.flyertalk.com/forum/smile.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Analise:
Spoken like a true public transportation customer. http://www.flyertalk.com/forum/wink.gif

</font>

Yes, I'm a limosine libertarian, right?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by ronin:
Got to ask, how many additional dollars, over and above the taxes imposed upon a gallon of gas, have you voluntarily donated to your various taxing authorities this year?</font>

Well, a good portion of my tax dollars go to defending oil and getting the US out of messes that we get ourselves into by being so depended upon foreign oil. Like all of the money we send to Saudi Arabia for oil and military bases that ends up coming back to us in the form of 15 of the 19 9/11 hijackers.

And those of us who live in major cities are subsidizing gas with our health. Tens of thousands of people get cancer each year from auto pollution.

Want lower prices? Get a fuel efficient car and drive less. It works.

But in the meantime, gas should be taxed a lot more, rather than being subsidized by the public's health and the general income tax revenues.

d

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by opus17:
Supply & demand -- if people really wanted lower prices, they would use less fuel (i.e., stop buying SUV's, pickup trucks, sports cars, etc.) </font>

According to the news I saw on TV, the problem is 95% the result of Saudia Arabia cutting exports to the US in the area of 40% above what it was two months ago. Those Saudias like the Americans so much, our partners in Anti Terrorisim....

So now we've got the following excuses....

Pipeline break in Phoenix Blackout in the Northeast High demand at the end of the summer (They know it's coming yet it always causes higher prices. I wonder why?) Switch over from summer gas to winter gas Saudi Arabia suddenly cut supplies

This list of one-after-another trial-balloons of completeley different excuses sounds just like Shrub trying to justify invasion of Iraq. "They tried to kill my daddy..."

[This message has been edited by xyzzy (edited 09-08-2003).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:
Yes, I'm a limosine libertarian, right?
</font>

No, a libertarian would not promote an artificial increase in prices via taxation. You are someone who probably relies on public transportation---probably does not rely on his own car. I've only heard New Yorkers promote higher gasoline prices as they travel via subway. 'Tax everyone else but me' syndrome.

Okay -- I do not live in NYC. I do travel by car and I think that they should tax the hell out of gasoline to encourage us to develop a more environmentally friendly alternative to fossil fuel.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by xyzzy:
Okay -- I do not live in NYC. I do travel by car and I think that they should tax the hell out of gasoline to encourage us to develop a more environmentally friendly alternative to fossil fuel.</font>

I see you believe that innovations can only come via punishment, not incentives? The stick beats the carrot, I see.

Can you give me an example of such a success story based on punishment instead of reward?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by JRF:
According to the news I saw on TV, the problem is 95% the result of Saudia Arabia cutting exports to the US in the area of 40% above what it was two months ago. Those Saudias like the Americans so much, our partners in Anti Terrorisim....

</font>

If we didn't consume so much of the stuff, we wouldn't care what the Saudis did, we would shop elsewhere.
We HAVE to import now.

I didn't say that. I do, however, believe that we had better do something soon about our ever-increasing thirst for fossil fuels.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by xyzzy:
I didn't say that. I do, however, believe that we had better do something soon about our ever-increasing thirst for fossil fuels.</font>

'Taxing the hell' out of anything is punishment. So you did say it. Advances don't come from punishment; they come from the opportunity to reap great rewards, ie. incentives.



[This message has been edited by Analise (edited 09-08-2003).]

AHHHH My cheapest fill up was 2.35 a gallon. That is premium gas the regular was like 2.15, and this was at a cheap gas station! Thank god I have not been driving too much. A big middle finger to those with the gas under 1.75 a gallon http://www.flyertalk.com/forum/smile.gif

I don't think we should jack up gasoline taxes just to punish people, but I do think that all of our road expenses should be paid for with gasoline taxes. I've forgotten the exact figure, but from what I recall, gasoline taxes do not account for all of our spending on roads. Add in transit, and the figure decreases further, obviously.

Taxing gasoline to pay for defense spending and some "compensation" for polluted air makes no sense. We have to have national defense, and it doesn't make any sense to place 100% of that burden on gasoline. New Yorkers do benefit from cheap oil from Saudi Arabia, as everything we produce requires energy at some point.

If you want cleaner air and longer-lasting fossil fuels, what you need to do is eliminate:

1) polluting cars (impound those piles of crap and pay the owner the blue book value)

2) trucks (build rail to ship goods)

3) electrical generation plants that run on coal, oil and natural gas (use nuclear power)


People are so sensitive to gasoline prices, even if you raise gasoline taxes enough to pay for 100% of road expenses, many of those SUV's will disappear. I am not in favor of punitive taxation, regardless of whether it affects me personally.

Unfortunately, it will be a long time, if ever, before my three suggestions above are implemented. Bleeding heart liberals say "Oh, no, you can't take away those old cars from poor people!" and "Oh, no, you can't take away trucking jobs from working people" and "Oh MY GOODNESS NO, we can't have nuclear power, we'll all die!"

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"Where's my money?" -- Pizza the Hutt

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Analise:
No, a libertarian would not promote an artificial increase in prices via taxation.</font>

No, actually libertarians are really big on usage fees.

Your assertion that it is an "artificial" increase is incorrect. Under the present system, whether you drive or not, you're subsidizing gas. Your income taxes are going towards it. I'd say you're artificially being forced to pay for gas that you don't consume.

A libertarian would say that gas users should be paying 100% of the cost of gas, not just the economic cost (e.g. exploration, drilling, transportation, refinement, and also military costs that come along with needing to defend oil) but also the cost to the public or to society. Air is a public good; polluters must (or at least should) be paying some compensation to the rest of the public for their use of that good. Libertarians would charge for that. Texas has a good system - large polluters have to buy "pollution credits" or whatever they're called from the government that gives them the right to pollute a certain amount. There IS a cost to pollution. Studies have shown that auto pollution causes about 10,000 new cancer cases each year.

Taxes are an important part of a free market system, as they are the only way to appropriately charge user fees on public goods. Without them, you have a system where anyone can do anything to the environment. Which is basically the system we have today. People are free to drive around SUVs that get 8MPG spewing out tons of pollution and giving their neighbors cancer. The tiny amount of direct taxes on gas that people are paying are not compensating for this at all.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">'Tax everyone else but me' syndrome.</font>

Sounds like what people who drive SUVs have. They want gas under $1 a gallon, and the only way these ultra low prices we have in the US work is when the true cost of gas is spread out among the public at large and hidden in other taxes, like income tax.

And, by the way, your argument that one can only have a position promoting new taxes if one is going to be the hardest hit by it would really make governance impossible and is absurd and impractical.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by JS:
Taxing gasoline to pay for defense spending and some "compensation" for polluted air makes no sense.</font>

Why not?

We tax polluters for the right to pollute, don't we? Or would it be better to just say, "hey everyone, pollute all you want, we're not going to regulate, tax or restrict it at all"?

Creating a market for pollution is one of the best ideas I've heard in a long time. The government sells pollution credits (allowing you to pollute a certain amount per credit). If you need to pollute more than your credits allow, you've got to spend more money to buy more credits. If you pollute less, you can sell your credits. Hence, you've got an incentive to pollute less, and meanwhile the public is being compensated for that pollution.

The environment is a public good. The government doesn't give away our public parks to private companies and individuals. I can't just call up the National Parks Service and say I want 100 acres of Yosemite for free, can I? Why should pollution be any different?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">We have to have national defense, and it doesn't make any sense to place 100% of that burden on gasoline.</font>

I agree, I wouldn't place 100% of the burden of defense on gas, just 100% of the burden that defending oil requires. It costs the US taxpayers a lot of money to ensure we have access to oil. And there are a lot of other similar costs bulit into our income taxes.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">New Yorkers do benefit from cheap oil from Saudi Arabia, as everything we produce requires energy at some point.</font>

That's fine, but we should pay for it in the price of goods and services we buy that require oil, rather than through our income taxes. This way, if I don't like using oil, I can avoid those products that come along with it.

Instead, I'm being forced to subsidize it whether I want to or not, and I'm not being compensated for the damage being done to my lungs and our shared environment.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Bleeding heart liberals say "Oh, no, you can't take away those old cars from poor people!"</font>

Funny how Analise blames liberals for saying the taxes on gas should be higher, and you blame liberals for saying that the taxes should be lower.

Guess liberals just can't win with some crowds.

Seems like libertarianism is still the best way to go.

d

By the way, for those of you who don't believe that libertarians would support taxing pollution, take a look at the libertarian think tank the Cato Institute's Web site:

http://www.cato.org/research/energy/gas-oil.html

Here's an excerpt from the first article I opened off of that page:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">As most people know, gasoline-powered motor vehicles produce pollutants that harm human health and may affect the global climate. From an economic perspective, the appropriate fuel tax would equal the cost of this pollution damage per litre of gasoline. That way, motorists would have to consider pollution costs when they decide how much petrol to purchase and how much they drive.

http://www.cato.org/pubs/regulation/regv23n4/parry.pdf </font>

Pollution is an external cost, that is a cost that is born not by the consumer, but by persons outside of the consumer.

So it is logical that there be a market mechanism to charge consumers for the full costs of their consumption, including the external costs.

That market mechanism could be a "tax" but it is really a mechanism to calculate and collect the "true costs" of consumption. It is no different than paying for the collection and disposal of your trash.

As far as gas prices, a lot has to do with the localization of gas formulation imposed by government fiat. This increases dependence upon a few refineries that can make that formulation and doesn't allow for much competition http://www.flyertalk.com/forum/frown.gif

There are few people on the planet more conservative than FWAAA.

I own several cars, including some big-engined classic muscle cars. None of my vehicles gets impressive gas mileage. The old ones get gasoline furlongs or gasoline yards, not gasoline mileage. But I don't drive them very far. So they don't use very much gas.

I live in LA and NEVER take public transportation. I wouldn't be caught dead on the bus. http://www.flyertalk.com/forum/wink.gif

However, I don't commute 30 or 40 or 50 miles each way each day to work like some people (actually many tens or hundreds of thousands of people). Often they drive something that gives ok fuel economy yet they burn 3 or 4 or 5 tankfulls each week - and pat themselves on the back for their "conservation minded environmentalism." http://www.flyertalk.com/forum/rolleyes.gif

Give me a break.

Compared to historical costs, gasoline is very, very cheap right now, even at $2 per gallon. Our societal mistake was not increasing it 5 or 10 cents each year from about 1985 - 2000 thru higher gasoline taxes to help "encourage" more thoughtful choices.

Had we done so, we'd have more revenue for roads, less pollution, less reliance on foreign oil (although I couldn't care less about importing foreign oil - better we burn their oil than ours) and greater productivity (since fewer people would spend so many hours commuting - they would have changed their behavior by now).

[This message has been edited by FWAAA (edited 09-08-2003).]

...Exactly!

By the way, JS -- I like your three points!

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:

Funny how Analise blames liberals for saying the taxes on gas should be higher, and you blame liberals for saying that the taxes should be lower.

Guess liberals just can't win with some crowds.

Seems like libertarianism is still the best way to go.</font>

Doppy, I was referring to liberals with respect to the forceful taking of polluting cars, not gasoline taxes.

I agree with you that burning gasoline causes air pollution, but your proposal of raising gasoline taxes to compensate for it does very little to reduce air pollution. More expensive air pollution is just as damaging as cheap air pollution.

The amount of air pollution spewed out by one car that fails exhaust standards wipes out the gains by replacing several SUV's with compact cars. That is why I suggest removing these old cars from our roads, not to mention that these same cars are also more likely to have bad brakes, bad tires, etc., that are even more dangerous than dirty air.

I also suggested a large reduction in the number of trucks on the road, as trucks spew far more air pollution than do cars. It's so much, you can actually see it!

While transportation causes a lot of air pollution, it doesn't account for all of it, which is why I tossed in the third suggestion of building nuclear power plants to replace coal, oil and natural gas burning power plants.

There are many other sources of air pollution (bakeries, manufacturing, etc.), but I think it's better to go after three big ones that can be solved with today's technology -- old cars, trucks, and fossil fuel burning power plants.

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"There's no sadder sight in this world than that of a football player trying to think." -- Daria

The OPEC crisis shifted consumers towards more fuel efficient, smaller cars.

The problem is that GDP/capita has increased so significantly that most consumers, while complaining a lot about recent price increases, can afford to continue to drive their large vehicles for frivolous trips.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Analise:
I see you believe that innovations can only come via punishment, not incentives? The stick beats the carrot, I see.

Can you give me an example of such a success story based on punishment instead of reward?</font>

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by JS:
I agree with you that burning gasoline causes air pollution, but your proposal of raising gasoline taxes to compensate for it does very little to reduce air pollution. More expensive air pollution is just as damaging as cheap air pollution.</font>

Yes, pollution is bad regardless of how much it costs to pollute, but the more expensive it is, the less it will happen.

Look at Europe versus the US. Much higher fuel prices in Europe, much more fuel efficient fleet of cars.

Right now, Mr. and Mrs. SUV don't mind going to the gas station 4 times a week to fill up. But the higher gas prices go, the more they complain. Higher prices reflecting the true costs to society would eventually convince them to buy a more fuel efficient vehicle and demand more fuel efficient cars and SUVs from the auto manufacturers. Ford & Co. have the research to show that people want cheaper SUVs versus better fuel efficiency because gas is cheap enough for them to not care. But they also have the research to show at what price of gas people will drive less and/or buy more fuel efficient vehicles.

Second, the tax revenue raised should help pay for the costs that come along with pollution. The money should be used to clean the environment and to pay for the negative effects on the public's health.

Similarly, you see "sin taxes" on alcohol and tobacco, that, at least in theory, are supposed to compensate the public for the costs that come along with them (e.g. drunk driving destroying public property).

Also, the tax on gas directly would be the most efficient way to tax the problem. I don't support the so-called "gas guzzler" taxes on cars with large engines. Large engines aren't the problem. I could buy a car that got 1 foot per gallon. If I don't drive it ever, I don't cause any pollution. Burning fuel is the problem - tax the problem directly.

As for the other sources of pollution you mention (factories, fossil fuel power plants), for them, I want to see the market for pollution I described above.

d

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Doppy:
Look at Europe versus the US. Much higher fuel prices in Europe, much more fuel efficient fleet of cars.</font>

In Europe, the taxes are what makes their fuel prices higher which goes into each country's National Health System and road maintenence.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Sky 1:
In Europe, the taxes are what makes their fuel prices higher which goes into each country's National Health System and road maintenence.</font>

And the excellent alternatives to driving that are available in most European countries; even in the boonies (i.e. No, it is not because of population density! It is because of gevernment policy that there are bike paths, county buses, etc.)

Yes, the gasoline itself costs about the same in North America as in (Western) Europe. It is the circa $3 per US Gallon in taxes that causes the price difference.