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A boycott of the gasoline stations of one oil company, ExxonMobil, is being urged by chain e-mails, aimed at forcing oil companies to dial down retail prices before a feared summer upsurge. The boycott suggestion may have originated with Florida retirees and seems to be circulating among old geezers. Maybe the young whippersnappers will buy into it, too.

The theory is that by putting retail sales-loss pressure on the largest gasoline supplier, the boycott target, that company will be forced to lower its prices, thus forcing competitors to do likewise. It is predicated on a rumor that retail prices may rise to $3 per gallon this coming summer.

Validity of the theory also depends on what really controls retail gasoline prices - OPEC, oil importers, refiners, EPA requirements for local conditions, variations in state taxes, and local competitive conditions among distributors and retailers.

However, should there be a virtual doubling of retail gasoline prices, it would likely result in much public hand-wringing, particularly in a presidential election year.

It'll be interesting to see what happens. After all, Detroit could again become the whipping boy, suffering from widespread but false beliefs that individual vehicle fuel economy has declined whereas what has actually happened is the public's growing appetite for less fuel-efficient cars, trucks and SUVs. So total fuel demand has grown, also abetted by more miles driven in more vehicles on the road. -Mike Davis


Gas Prices on the Rise Again

Gasoline prices across the United States are moving up again and have reached a new plateau that could prevail all the way to next fall, according to a new forecast by the U.S Department of Energy. The higher cost of energy helped drive up the Consumer Price Index by half a percent in January, according to another report released by the U.S. Department of Labor. Members of the Federal Reserve Board said after the Labor Department released the new report that inflation is not a problem for the economy overall. However, energy prices, the most volatile element of the CPI, have jumped 4.7 percent in January to the highest level in eleven months, the Labor Department reported. Crude oil prices are now hovering between $35 per barrel and $36 per barrel. Gasoline inventories are relatively small. Cold weather across the Northeast and Midwest hasn't helped the situation, analysts said. In addition, OPEC, the Organization of Petroleum Exporting Countries, is vowing to cut production in April even while demand for oil is growing in China and India, which are rapidly turning into major importers of crude oil


http://www.thecarconnection.com/index.asp?n=173&sid=173&article=6886
 
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