Mar 29, 2010
Gasoline prices are skyrocketing again, up 87.5 cents in Michigan compared with one year ago. In California, the price is nearly $1 a gallon higher than a year ago.
This seems to fly in the face of the old notion of supply and demand, since demand for gasoline is down due to the economic downturn and people have been shifting to more fuel efficient vehicles.
In fact, the big oil companies have their own ideas about supply and demand. Since there is very little competition left in the oil industry, the oil companies are simply responding to a drop in demand by cutting back on the supply of gasoline. They are closing refineries in order to keep gas prices higher.
Chevron put a refinery up for sale and is considering selling another. Sunoco shut down one refinery permanently and sold another. Valero Energy Corp. closed a refinery in Delaware last year. And Royal Dutch Shell is reviewing its refinery operations and plans to keep only those that expect to produce the most profits.
The oil companies are pushing up gasoline prices in the middle of a deep economic crisis – drastically reducing many people’s ability to pay.
The oil companies demand that we supply – their profits!