6-4-08 by dugan
Gasoline prices, that is. I can say it in one short sentence: Oil prices down, gasoline futures contracts way down, pump prices still spiking. As they say on Marketplace Radio, let’s do the math. In early afternoon, crude oil prices were sagging to the $122 a barrel range, down more than $13 a barrel from last month’s $135-plus highs. That difference comes to 31 cents a gallon on the oil alone. Oil prices have lately been blamed for 70% of the price of a gallon of gasoline. So gasoline should be headed down to the tune of 21.7 cents a gallon. Yet national pump prices for regular grade hit yet another record today of $3.983 a gallon, according to the AAA fuel gauge (changes daily).
in California, prices leaped–they’re up 4 cents a gallon just since yesterday, to $4.313 a gallon. (I’m surprised no one has tried to blame an oil tank fire in Kansas City.)
I’ve already heard the excuse that it takes time for oil price changes to filter down to gasoline, though it seems much less true on rising prices. I’ve also heard that the price is "factoring in" the likelihood of hurricanes in the Gulf of Mexico, which could affect refineries. If that were true, however, gasoline futures prices would be going up, or at least not falling. And they’re down 13 cents a gallon in one day as of the time I’m posting this, according to the Bloomberg ticker.
So the higher pump price of gasoline is going straight to the profit line of refiners and to their parent oil companies. As OilWatchdog has said before, oil companies that can’t reap a record profit on oil will try to make up the difference on the price of gasoline. The only barrier to that behavior is a government that gives a damn about consumers. Despite all the hearings and hard words about oil prices in Congress lately, it remains to be seen how much of that will be just show.