Re: More on expensive gasoline

apenwarr: Your bit of economic theory is interesting, but I'm still pretty certain the key driver here is supply and demand, not price optimization. See, for example, the testimony by Paul Sankey before the U.S. congress on the subject: "Gouging is an Idiotic Explanation".

The facts are simple: domestic demand in the U.S. for gasoline (refined crude oil) is about 22 million barrels per day, while supply is only about 17 million barrels per day (the difference is made up with imports from overseas). Most of the blame for this expensive discrepancy can be placed on the difficulties currently experienced by the U.S. refining industry (extended maintenance, tighter product specifications, safety concerns), rather than some kind of deliberate conspiracy by an oil oligopoly to restrict supply and/or fix the price.

The marketplace for energy is simply too complex, with too many stakeholders, for it to be treated as a monopoly. If only they could, I'm sure those U.S. refineries would very much like to be processing and reselling those 5 million barrels of gasoline that are currently being imported (who wouldn't given the current high prices?). Why invoke conspiracy and collusion when an alternative, well-sourced explanation works just as well?

Syndicated 2007-09-04 18:48:24 from Ginger tea and channa masala