By allowing gasoline prices to rise to astronomical prices, it will hurt the economy and place hardships on working americans who are now strained just to get to work. Also need to force oil companies to start building refineries.
2007-05-22 01:53:26 · 17 answers · asked by reddog 1 in Cars & Transportation ➔ Commuting
Learn economics. Price ceilings never, ever work. Just read about rent control apartments in New York. People practically kill one another for a rent controlled apartment. Why? Because they understand the true value of that apartment and know they're getting a bargain.
Translate that to gas. If people know they're getting a deal, they'll consume even more gas than before. Supply will dry up, because oil does cost money, no matter what you believe, and the oil companies will have no incentive to produce it. They'll use that crude to produce other petroleum products, instead.
What does that mean? It means that the gap between supply and demand will grow even wider until gas is worth $20 a gallon and the whole thing collapses under its own weight.
Let the market decide the value of gasoline, as it already does. There is no better model than the world market, it's been proven time and time again...
As for refineries, it takes about 10 years to put a refinery into service. It takes 2-3 years just to expand an existing refinery. Refineries are incredibly complex industrial feats of engineering and persistence. It is ridiculous the amount of BS a company must go through to even begin proposing a new refinery. Not to mention that once they commit to it, if the proposed ceiling on prices that you're in favor of was to be enacted, there'd be no way to justify the multi-billion dollar investment in a refinery that can only lose money on every gallon of gas it produces.
2007-05-22 04:28:00 · answer #1 · answered by Anonymous · 0⤊ 0⤋
For one, to put a cap on the price of fuel is not the free market system, and yes it does put hardship on people, but do you see the state and federal government offering to drop the taxes they charge on fuel? They don't even have to do a thing to make money except hold their hand out, and the oil companies cannot own refineries by law, most of the problem is accidents, refitting old ones that are wore out, and the fact most people don't want a refinery in their back yards and fight the building of new ones, 20 years ago there was 337 refineries operating in US, there is just over 150 now, and a lot more people now than 20 yrs ago, so any disruption in the flow of oil and the increased demand = higher prices.
2007-05-22 02:06:55 · answer #2 · answered by Anonymous · 2⤊ 0⤋
Why are Americans not reducing fuel usage if it is placing such hardships on working America? Fuel usage has not decreased at all, despite all of the complaints about costs.
Perhaps building more refineries isn't the answer. In Europe, where prices are much higher, much of the response has been far more efficient cars, smaller cars, and alternative methods of transportation. That is what should be happening.
People's dependence on oil will keep the prices high. If people could all not drive 1 day a week (perhaps by using public transit, biking, walking, carpooling), fuel usage would go down significantly and prices would decrease.
2007-05-22 07:00:07 · answer #3 · answered by Anonymous · 0⤊ 1⤋
The value of anything is what a willing seller will take and a willing buyer will give. If you cap the price of anything at a price lower than what someone thinks it is worth, they will not sell it. There are only two ways to lower a price. Increase supply or decrease demand.
If you went out to buy a Christmas tree at a "cut your own" farm today, you could most likely get one very cheaply. Not too many people are buying Christmas trees in May. Go to the same place on December 15th, and you will have to pay more. Low demand = low price. High demand= high price.
If next to this farm someone opened another Christmas tree farm that was much larger, the prices would also go down. Because there are only so many people looking to buy a tree, an increase in supply makes the tree worth less.
If you want to have lower oil and gas prices, supply must be increased, and or demand decreased. This means that we need to drill in the oceans and in Alaska. We also need to build new, bigger and better refineries.
Right now the tree huggers are preventing this. If you want to blame someone for high gas prices, find your local environmental wackos!!
2007-05-22 03:19:31 · answer #4 · answered by fire4511 7 · 1⤊ 0⤋
Clearly some people have some very strong opinions which they believe to be the sole truth. Truth is that most of the money you pay at the pump are taxes. I'm not saying that it's all taxes, and that it's not expensive, but a lot of it are taxes.
Another thing is, yes, these oil companies post huge numbers, but it's not all from gas. If anyone would bother to go through their financial papers, they'd see that a lot of their profits come from other sources. In the corporate world, everyone owns everyone else. Say exxon owned google stock... I'm sure they posted a nice profit when Google stick broke $500.
-MunkiPhD
Autotropolis.com
2007-05-22 02:10:33 · answer #5 · answered by Autotropolis 2 · 2⤊ 0⤋
Put a ceiling on the amount you would spend on gas. If it gets too that price, don't buy anymore. A free market system dictates the gas price. The consumer has far more control over the price of gas than the producer. The problem is the consumer is enormous and incredibly stupid. So keep complaining, it is your right.
2007-05-22 02:57:49 · answer #6 · answered by Clown 3 · 1⤊ 0⤋
They're getting bribed too much by the oil companies to wanna care to bother with capping the price gouging.
Even if they did, the oil companies would just make some BS excuse that it's hurting business and cut back on what oil we get, possibly to the point that the people protest the capping because they figure you either pay too much, or you're just outta luck entirely.
It all comes down to one thing: Money. They want money, and heaven forbid the oil company makes a few million less than it did last year, despite their profits being in the BILLIONS already.
2007-05-22 02:05:28 · answer #7 · answered by Nemesis 5 · 0⤊ 2⤋
There are market forces driving the price. 1-oil companies are holding back production to drive price up. 2-the value of the dollar has collapsed on world exchanges because of the deficit which is caused by the Iraq War and tax cuts for billionaires, 3-the futures market bids up the price of commodities when it thinks there may be a reduction in supply and the Iraq War, plus the possibility of another war in Iran, definitely offers a great deal of uncertainty about the future availability of petroleum.
I think it is time to nationalize the oil companies. They have acted in a criminal manner and so their assets can be siezed under the RICO anti-racketeering statutes. Any inefficiency due to government operation of their facilities would be more than counteracted by elimination of their price gouging.
2007-05-22 01:59:16 · answer #8 · answered by jxt299 7 · 0⤊ 2⤋
So you believe we need to force the oil companies to do something they have been trying to get permits to do for years, (build refineries)? Talk to the Greenpeace types and tell them to stop fighting against the new refineries.
2007-05-22 03:58:59 · answer #9 · answered by Gray Wanderer 7 · 2⤊ 0⤋
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2007-05-22 07:57:08 · answer #10 · answered by Anonymous · 0⤊ 1⤋