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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.

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