Price gouging?

Today I saw my first $2.99/gallon gasoline while biking to work.

Also I overheard a coworker today saying he planned to write to his comgressmen on the price gouging being done by oil and gasoline distributors and sellers.

I suggested that higher prices are what we need to "break the monopoly power" of gasoline and make alternatives competitive. He mistook my statement and "agreed" the "monopoly" power of a small number of oil companies was the problem.

I also mentioned my suggestion to raise the gasoline tax and two coworkers immediately responded with the "regressive tax" lament, how the poor won't be able to make it if prices are raised further.

It is almost funny to see how easy it is to "help" people (lower prices now) while enabling them to continue delaying unavoidable decisions. SURE we can HELP people by GIVING them money without any accountability. It's just funny how separated the big and little pictures are.

I said we ought to make it a national policy of projecting a $1.00/year gasoline tax INCREASE over the next 3 years (getting our taxes more on par with Europe), and directing that money to projects that reduce our demand for oil and promote alternatives. If it is POLICY - known and unavoidable, people WILL respond - and it will be MUCH more orderly than times like now with market-driven price spikes.

I'm actually overall disturbed how hard it is to convince well-educated, thoughtful people that higher prices for unsustainable economic activity as vital to our long term best interest. SURE, it is not what a "addict" wants to hear, but it's what we need.

I know, I feel helpless too, and compassionate towards those "on the bottom". Most people on the bottom don't make "informed" choices based on looking at their long term best interests. They make decisions on survival. They'll buy a 20 year old rust-bucket gas-hog car for $200 and run it until it needs repairs and repeat. They'll juggle each month which bills they are going to pay, and which one's can be paid late. Gasoline, food or electricity?

Who's responsible for this? Who's going to "lift" them up when times get even tougher? It's all well and good to say expand government programs, but there are limits, and what seems like struggling budgets now might be considered the promised land in a few years of renewed inflation and unemployment.

Lastly, I read an article that considered limits on gas station price increases - some states limit price changes to once/day, others limit the increase.

I'm just thinking, were I a station own, what's my choice? If I have a shipment of gasoline that requires a price of $3.00 to cover my costs, and the state says I can't increase it to more than $2.70 today, what do I do? Sell "at a loss" today? Close my pumps?

AND if there's ACTUAL shortages, what mechanisms exist to limit consumption BESIDES higher prices? I mean if my supplier says "No more shipments for 2 weeks", how should I conserve my remaining fuel? I might limit my hours open each day to spread it out. OR I might sell until I'm dry. OR I might raise prices to discourage excess buying.

I really can't see raising prices as harmful. I mean sure it can generate panick, but people need to get a clue. Fears of oil shortages CREATE panick and desire for stockpiling. I'd rather stations stockpile over individuals. If a few individuals REALLY want to stockpile $5/gallon gasoline, well, fine, pay me now! Why shouldn't I be able to do this as a station owner?

Anyway, my bicycle seems rather nice these days! Too bad about the coming winter...