Why Are Gas Prices So High? Because They Can - 2:39 p.m.

Driving down Myrtle Avenue this past Saturday, I passed an Exxon gas station with prices that looked more like Mega-Million lottery jackpot numbers than what you'd pay for gas: $3.14, $3.23, $3.34 ( feel free to play those numbers, you just might hit.) Luckily I filled up last week and don't have to drive from Mon-Fri, still had a 3/4 tank. To backtrack though, I paid $2.89 and pumped in $35.00 worth.

We've talked about gas prices before, it's just funny to watch the earlier predictions come true. Believing The Oil Factor and that money is being made in any crisis, I told ya'll the price per barrel would reach $100. It's about $70 now, it was kissing 50 then. We've got a summer and another terror attack or conflict with Iran to make the triple digits. Haha. Is that my Jim Kramer imitation?

Prices at the pump.. we all agreed, wouldn't be coming down anytime soon. How high they'll reach, that's the question no one can answer. Just be assured that you'll have to take out a small loan to fill up this summer, when they use those beach and amusement park trips as another reason to bump up the price.

I'm hearing that the latest spike is a result of supply and demand.

Outside of the peak oil theory, how does this work?

Demand.. Have you used you're car anymore than usual? Heated your home to desert-like temperatures? Anyone using crude oil as hair grease? The jerri curl damn sure hasn't made a comeback, so that's three no's.

On the supply side, Saudi Arabia, the number one oil supplier in the world, says they are providing plenty of oil.. despite the continued growth of China's economy and oil consumption.

With the record profits fuel/gas companies are booking (Exxon $36 billion), old dogs bailing out with historic $400 million severance packages (Exxon Chairman Lee Raymond) and no real crisis on hand to explain the current price at the pump. I'm more than willing to say we're being drained with some good old fashioned price gouging.

On one hand the fuel companies say the price of crude oil determines the price of gas at the pump. Ok. So that means their expenses have increased. How does that expense then translate into record profits? The profits should remain the same.. unless you've increased your profit margin by charging in excess of the increased price to make it from the expensive crude oil.

Simply put, they're charging more than they used to, because they can. That demand is nothing more than a fact called cars can't run on Kool-Aid.

Any lack of supply is an artificial number based on what could happen in the Middle East. So as this guy points out, when Iran ( the 2nd largest oil supplier) causes problems, the threat of a supply disruption causes a spike in crude prices. But seeing as those supply interruptions haven't taken place, there should be no price hike based on the idea of it happening. That doesn't put any more oil in the ground.

If I may back it up for minute.. that writer's name is Christopher Dickey. Who must be one of Bush's best buddies right now, seeing as he's jumped on the Iran is the new threat bandwagon. In this particular case he puts full blame of the current price hikes on Iran and their political shenanigans.

As I recall, the price went up two years ago and Iran wasn't even in the picture. They've just started to make headlines. What was it then? The occupation of Iraq > Now it's the word play with Iran.

The Middle East is a problem, but the blame for prices sits on the shoulders of the oil execs who use the situations to make the most money possible. They are businesses and have the right to make that money, but when oil is now just about as important as air and water, they should have more responsibility to the public to have fair prices. Fair doesn't equal record profits.

But isn't that demand?..

Don't believe the supply and demand crap.. again, unless on the supply side you're talking Peak Oil. Demand has not increased to justify the price. Most people aren't drinking the stuff, they just want to get to work and back home. More factories and plastics.. yeah overseas, that's where those jobs have gone anyway.

Oil is a speculation run market. And with the Middle East close to heating up once again (as Bush continues to spread his democracy crusade) it'll reach that $100 raw, $4.50 to $5.00 for you and me, before we ever figure out how we're going to scoot around town, doing a good 25mph in an electric car.

I just found that picture. It really does say it all. Haha!