Economy

Rave

A Modest Proposal: The Gas Factor

Posted 13 months ago|2 comments|500 views
Written by
Coloranter Raver
Denver, CO
So, today CNN published a story about an MCO-area gas station charging over $5.50 a gallon for gas – much higher, incidentally than the average of just over $3.50 in the rest of metro Orlando. (source) In a related story, the same paper analyzed why gas prices in the USA are so high while the price of a barrel of oil is comparatively lower than when the gas prices were previously this high. (source) After reading these stories and more about how the oil un-regulated oil speculators have the single biggest impact on the price of oil and gas in the USA, I decided to make a modest proposal. See what you think?

Well, as a small retailer, every aspect of running my business is impacted by the cost of oil and gas. My suppliers raise their delivery fees. The supplies all cost more as suppliers raise prices. Even the chocolate has gone up. (source) I like how the gas stations can just keep raising the price every day and customers pour in (should that be poor in?). How can I stay in business if all of my costs go up, but I'm still charging $3.99 for a sandwich? So, my proposal is simple, everyone who sells anything should post up a "Gas Factor" sign in the window. This will then be a factor that is added on to the price of each person's bill. It will change everyday based on the average cost of a gallon of gas in your state as available from www.GasBuddy.com. So, for example, in Colorado today, the average cost of a gallon of gas was $3.584. To me, and you can disagree, gas for this decade should cost $2.00 a gallon. Therefore, the increased cost is $1.584 per gallon. So, the gas factor would be 15.84% and the cost of my $3.99 sandwich today would be $4.95. What do you think?

I've kept the cost of my sandwich at $3.99 since November. Back then the cost of gas in Colorado was about $2.70. That is an increase of 32%. Does it seem logical that for random reasons in the universe, oil refineries should be able to raise their prices by an amount that causes gas to go up 32%, but I should just sit back with my $3.99 sandwich? People got to get gas, well, people got to eat.

Why should the oil companies be the only ones profiting off this wonderful game of roulette they are playing? Why shouldn't I have a quick and easy way of adjusting my prices everyday so they are in sync with the cost of gas? Imagine if everyone did this. Wouldn't the next result just be inflation? It's not inflation if only one sector of the economy raises prices just to raise them. If everyone does this, though. If people ask, "Why do your prices fluctuate every day for the same thing?" I'll say,
"Oh, it's the gas factor. You know just like the cost of a gallon of gas changes every hour."

Maybe this would be a better solution that trying to figure out who to blame for the price of gas. Is it the government, the oil speculators, the buyers and demanders, the suppliers, the Chinese who?

So, what do you think?
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COMMENTS
13 months ago: Did the cost of your sandwich actually go up by 32% or did your suppliers eat the increase of fuel and keep your costs at a fairly level rate? Is it just now that the suppliers can't keep eating the higher fuel cost and have begun to increase the price you pay for your sandwich? Where were you 12 months ago whe the suppliers were eating the costs?
Coloranter Raver
Coloranter Raver
Denver, CO
13 months ago: CG,
That's my whole point. The suppliers and retailers are supposed to just keep eating the increases. How long can we all continue to eat this, and why should we? Why shouldn't we all be allowed to tie our costs to some mysterious supply chain issues that don't exist. If you read some of the stuff out there, you will find there is actually a glut of certain kinds of oil in certain parts of the country. But, the oil profiteers are using everything in their power to justify the rising cost. If you look at the cost of a barrel of oil vs. the cost of a gallon of gasoline over the past 5 years, you will find that the last time gas was this high, a barrel of oil cost far more than it does now. How do you explain that? I can see only one way, and that is people are monkeying around with the price and will get away with it as long as we let them. Because gasoline is such a critical commodity, we are over a barrel. It's not like when the price of corn shoots through the roof, you can eat more rice. We all need gas and have no choice. People are perfectly entitled to their profit, but this is ludicrous, and it's being paid for by cutting the profit margins of all the other businesses in the country – especially the small businesses like mine that has small profit margins to begin with.

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