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Gas prices - Phil's Rambling Rants — LiveJournal
September 18th, 2006
05:50 pm


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Gas prices

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Date:September 19th, 2006 04:50 pm (UTC)

Re: How unamerican

E85 is not taxed as much as gasoline, and ethanol production in general gets tax subsidies, but I wasn't aware of actual subsidies for E85 that would make the retail price of E85 unrelated to the price refineries pay to blend E10.

I don't actually want to see the price of gas go down. I want it to stay at a level that keeps people thinking gas is expensive, which probably means continuing to increase over time as people get used to the price. But I want to see the price increasing because we're collecting more taxes, not because we're pushing the profits of Exxon higher and giving more money to countries in the Middle East that want to kill us. The increased tax revenue should at least postpone the financial collapse of the federal government. And I want to see price stability. People were just starting to get the message that maybe they should not buy an SUV when they go car shopping, and we see the price go down. It'll be back up, but we'll have lost valuable time in getting a more efficient vehicle fleet out there.

I never intended to claim that gas prices aren't influenced by market forces. I just don't think that market forces can account for all of the price volatility we see. There are a lot of individual gas stations but only a few oil companies for them to get gas from -- few enough that they retain meaningful pricing power. The fact that they have pricing power does not prove that they are using it to achieve a political end -- but I do find it fishy that the price changes have been very politically convenient.
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