Our View: Pump peril
February 21, 2013 4:30PM
Updated: April 23, 2013 2:29AM
Remember when stratospheric gasoline prices made you consider the unthinkable, buying a hybrid car?
Then gas prices went down and you decided you disliked hybrids. Then prices went up, and hybrids didn’t seem so repulsive. And then down and then up and then down and now up again. Starting to see a pattern?
Anyone surprised that gas prices have shot up again? It’s like being surprised because the sun came up this morning. This is just the way it works. We’re cringing at what the summer might bring.
Almost everything from weather to refinery efficiency/capacity to politics in oil-rich countries to U.S. pollution rules to local taxes affects the pump price. But it really comes down to Economics 101 — supply and demand. The demand exceeds the supply, and that isn’t likely to change any time soon.
But your most cynical suspicions also are true to some degree. When the price of crude oil goes up, retailers jack up the pump price immediately and sizably. But when the oil price declines, they’re not nearly so quick to drop those digits on the price sign.
It’s a convenient way to keep higher profits temporarily and balance lower profits from other months. In marketing, they call it “testing the mean” or “edging.” In our world, we call it “greed.”
But one of the least-appreciated factors in gas pricing is you. When rising prices shock drivers nationwide to the point where they drive less, there’s usually a drop in price. You drive more, you pay more.
So, if you want the outcome of gas spikes to be less strangling on your bank account, it’s sort of up to you to get control of how and when you hit the road.
Combine trips, drive conservatively, buy a car with a more economical engine, use public transit and, during better weather, you might consider a bicycle. Bikes aren’t nearly as ugly as hybrids.
Welcome to capitalism. Makes electric cars and hybrids seem a lot more fun, doesn’t it?