Saturday, July 16, 2011
Gas Prices Creeping Up, Continued
Ok, as reported yesterday, a "reasonable" price for gas in DC was $3.73 on Thursday, about 5 cents higher than it had been at its trough. But on the trip down to Roanoke yesterday, gas was $3.49 (exit 291), up from $3.35 when DC prices were at $3.68. So something has happened that has caused gas prices to rise. They rose 14 cents on US 81, but only 5 cents in the DC area. To me, that's strong evidence of price gouging. I.e. DC area prices were already at a high profit margin because they had not fallen to a "fair" price when oil prices dropped. When prices went up, DC retailers would have had a hard time consistently raising prices to maintain those margins (although clearly, many of them tried -- I've seen gas near $4.00 per gallon at "unreasonable" stations); hence, part of the increase was absorbed by reducing their excessive profit margins. That's the theory, anyway.
Posted by The Price Fixer at 8:17 AM