Diamond Pilot, is this your fault???

[murphy1244]

Yes and Yes.

Then why don't they limit how much gas you can buy like they did in the 70s?

 

[LD1]

Something somewhere breaks and gas shoots up 0.70 overnight.

That something gets fixed and it takes months to come back down a few pennies at a time.

Just wondering though, does raising gas from ~2.20 to 2.99 really make people buy less? Maybe I am the rare type in this country, but I dont burn gas joyriding just because gas is cheap. I only drive when there is a need to drive. Work, store, mow the lawn, etc. If gas were $1 per gallon or $5 per gallon, I dont think I would use any more or less gallons per year.

 

[MikePA]

Then why don't they limit how much gas you can buy like they did in the 70s?

Because there isn't a shortage.

 

[smstonypoint]

If only more people would read 'Basic Economics' by Thomas Sowell and stop believing in myths, black helicopters and the man behind the curtain who controls all fuel prices.

Anything by Thomas Sowell is worth reading.

I've posted this image from Mark Perry (https://pbs.twimg.com/media/B3KaqTMCIAAp7Uh.jpg) before, but it's worth repeating in my opinion.

Steve

 

[rd_macgregor]

Because there isn't a shortage.

I would guess that the price differential would result (primarily) from the cost of moving replacement supplies in from elsewhere until the local refinery capacity is restored. This assumes that there is adequate capacity at other US refineries to produce a surplus for "export" to the upper midwest.

 

[smstonypoint]

Just wondering though, does raising gas from ~2.20 to 2.99 really make people buy less? Maybe I am the rare type in this country, but I dont burn gas joyriding just because gas is cheap. I only drive when there is a need to drive. Work, store, mow the lawn, etc. If gas were $1 per gallon or $5 per gallon, I dont think I would use any more or less gallons per year.

If you will indulge a retired teacher, this may be a teachable moment. Old habits die hard.

Economists measure consumers' responses to a change in own price by the price elasticity of demand = the % change in quantity demanded/% change in own price, all else constant.

I have seen estimates of the short-run own-price elasticity of demand for gasoline as low as -0.03, but many are in the neighborhood of -0.25 (Page Not Found). All are less than 1 in absolute value and we say that the demand for gasoline is inelastic. The more and the closer the substitutes for a good, the more elastic is the demand for that good. There are no close substitutes for gasoline.

Assuming the elasticity is -0.25, a 10% increase in gasoline prices would reduce gasoline consumption by 2.5%, all else constant. The flip side is that supply shocks (e.g., a refinery going down) result in relatively large price changes. A 10% reduction in the quantity supplied would result in an approximate 40% increase in price.

Steve

 

[murphy1244]

Should be interesting when they fix it as the oil is stocking up and ready for processing. Marathon here does a price spike every 2 weeks or so jumping up 30 cents then slllllllllloooooooooowwwwwwwwwwlllllllly back down a dime.

 

[ruffdog]

Me thinking the price will stay high through Labor Day.

 

[Ford850]

Should be interesting when they fix it as the oil is stocking up and ready for processing. Marathon here does a price spike every 2 weeks or so jumping up 30 cents then slllllllllloooooooooowwwwwwwwwwlllllllly back down a dime.

Outside of this recent 70 - 80 cent spike, this is what we see here too. Thursdays bring a 20 - 25 cent price bump, which slowly drops back down, penny by penny over the next week or so. Then another Thursday spike, and so on. All stations change their prices within a few minutes of each other throughout the region.

 

[Diamondpilot]

This thing in Indiana, is this your doing? Gas rose $0.50 a gallon and I figure you had something to do with it. Its the same old story, something goes wrong somewhere in the supply line, and its an excuse to raise prices. It must not have affected diesel prices since diesel is now about $0.30 less per gallon than regular unleaded.

I hate it as much as you. Gas went from $2.21 to $2.99 but is creeping back down. Knoxville area today I saw $2.09.

Diesel was at $2.39 till yesterday but today it was about $2.79.

Blame me!

Chris