02 November 2012

Gas Prices

Gasoline prices in Anchorage peaked at $4.19/gallon a couple of weeks ago, but have settled back to $4.06. They're much higher elsewhere in the state. Why so high, you ask?

A good question.

First, some background: Alaska pumps and refines about 95% of its own oil. The operators of the two refineries here have complete freedom to set their own prices ... and the market is small enough (750,000± people), and the distance from elsewhere great enough, that there's no competition.

A couple of years back, the local paper sent reporters to ask the same question: "Why so high?" The answer was jaw-dropping.

They tie our prices to the California supply grid, because that's what it would cost if we had to send our oil there to be refined, and then bring it back. The fact that WE DON'T is apparently irrelevant. So ... the operators set their own sky-high price, and then make an unsurprising profit.

So.

With every sudden jump in prices, the predictable cry of "someone should do something" goes up ... and equally predictably, some legislator-or-other in Juneau will announce that he/she is going to get to the bottom of this. Yeah, right.

It's a free market (so to speak, that being one of the few bits of not already over-regulated by the compassionate and caring folks in the District of CriminalsColumbia).

The answer isn't "more regulation" ... it's "LESS regulation".  Take the restraints, high taxes (but I repeat myself), and crushing feel-good environmental requirements off the table, and perhaps others might be convinced to build another refinery. Or at least, pump more oil.

It's a lead-pipe cinch that the current system is broken.


That's my two-cents' worth, and I'm certainly open to discussion. Comments?

5 comments:

Barlow Brownstone said...

I think a pitchfork party is in order.

Rev. Paul said...

Take a number & stand in line, sir. I'll save you a place.

Rev. Paul said...

Just rec'd this comment via e-mail, from Sandi-with-an-i back in Missouri:

"The entire time I was in California last month, gas ranged from $4.59 to $4.79 so I guess you're lucky??? yeah right huh.

"Two days ago gas was $2.99 here, not sure what it is today but you can bet I filled the tank!"

Ajdshootist said...

I wish i had your prices it costs me the best part of £100 to fill up my car and that hurts.

Rev. Paul said...

Ajdshootist: thank you for putting things in proper perspective. I wish your prices were this cheap, as well.