Gasoline Pricing is a Corporate Game

Once again, the oil companies have run their ruse on the American public. And, as short as our memories are, we have accepted the deception with a shrug of the shoulders and a "nothing we can do about it" attitude.

The pattern is clear if one cares to gather the information from multiple sources and review the history of gasoline pricing. The scenario goes like this.

A crises is brought to the public, usually in a dramatic way.

- Conflict in the middle east.
- Major repairs on the Alaskan pipeline.
- Violent weather has slowed oil platform production.
- A fire at a manufacturing facility has crippled production.

Whether naturally occurring or perceptually created, these events are the trigger point for big oil to test the market price. It starts with a 20 to 30 cent per gallon jump, followed by a resting period of a few days or weeks. Another price increase soon follows, with the chosen crises as justification. Every few weeks the price is increased until accusations of price gouging surface, senate committee hearings are called for, and public outrage reaches a fevered pitch. What follows is an insidious pattern that has repeated itself over and over the past fifty years.

Just before a full congressional investigation is convened, prices begin to adjust downward. Within a few weeks, consumers are seeing financial relief at the pumps. Often the adjusted price is a few cents lower than before the crises ensued.

Then slowly, but extremely well orchestrated, the prices climb again, usually within 3 to 4 months. They stop at a predetermined point - the point of the least resistance exhibited by the public during the "price testing" - that place on a formulated scale where the new price per gallon is still far below sparking congressional hearings, yet not high enough to cause a large public outcry. (Just a lot of murmuring and grumbling.)

And we shrug it off, thanking our lucky stars that the new "fixed" price isn't as high as the "test market" prices during the "crisis". We accept the new profit margin, telling ourselves that it could have been worse.

Don't worry my fellow Americans, it will get worse. Within eighteen months it will happen all over again. Here is the pattern in a nutshell.

1. Crisis announced. The wholesale crude price immediately skyrockets.
2. First retail price increase.
3. Media coverage, and mild public resistance.
4. Second pump price increase.
5. Large public outcry, sales begin to slump.
6. Third price increase.
7. Calls for investigations begin.
8. A pause of 2 weeks, and prices begin to adjust toward "pre-crisis" levels.
9. After 1 to 3 months, prices rise and settle in somewhere between the first and second "test" price, usually justified by a holiday weekend or beginning of the summer vacation season.

Result --- Oil company profits soar dramatically 3 financial quarters later.

Some will call me paranoid. I would counter that I am a student of history. The pattern is there, and it will repeat itself again and again until we decide as a nation to rid ourselves of the big oil death grip. Fuel and energy alternatives are out there. The Internet is available to share the knowledge and sidestep legal stalling by the powers that be.

Question the current paradigm. Refuse to accept the status quo. Support alternative research and conservation whenever possible. As responsible citizens of earth, we must embrace a change.