I live in southern California and have noted that in the last few weeks gas has gone from $2.45 per gallon to $3.45 per gallon (premium), while the price-per-barrel has gone from approximately $50, up to over $63 (I believe), and back down to $57. The petroleum companies are quick to increase the price of their gas when the cost goes up, but are slow to reduce the price when their cost goes down.
The petroleum companies made record profits in 2005 and 2006.
The petroleum companies do not really compete with each other (there are different companies that are fighting for your dollar, but as of yet, no company has made a move that would cause customers to prefer them, i.e.: reduce prices drastically in ALL franchises/outlets. In light of the profits, I believe there is pricing cooperation occurring between companies.
Here's the question:
At what point does government involvement become necessary to ensure that some sort of price control in relation to the production cost of gas?
2007-03-16
03:51:23
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4 answers
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asked by
Steve F
1
in
Corporations