WashPost Biz Page Runs Cartoon Pushing Gas Gouging Meme

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By Ken Shepherd (Bio | Archive)
May 13, 2007 - 16:10 ET
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A cartoon in the May 13 "Sunday Briefing" on page F2 of the Washington Post furthered a left-wing talking point against "Big Oil" that a comprehensive study by the Federal Trade Commission (FTC) debunked last year: that oil companies artificially manipulate gas prices by squeezing supply.

A cartoon from the Newark Star-Ledger's Drew Sheneman depicts a man fueling his car asking a cigar-smoking "Oil Co." representative, "Why do gas prices always go up right before the summer vacation season?" "Coincidence," replies the oil executive, as he stands atop the fuel line, bottlenecking the gas on its way to the motorist's car. The price atop the pump reads $3.50.

The implication, of course, is that the petroleum industry artificially bottlenecks supply to jack up fuel costs.

But that's not true, previous probes into allegations of price gouging have determined, including a May 22, 2006 FTC study of post-Hurricane Katrina gas prices.

Among the major conclusions, the FTC post-Katrina found:

  • “No evidence to suggest that refiners manipulated prices
    through any means” including diverting gasoline supplies to other
    countries or deliberately running refineries at an artificially low
    capacity

  • “No evidence to suggest that refinery expansion decisions over
    the past 20 years resulted from either unilateral or coordinated
    attempts to manipulate prices.”

  • “No evidence to suggest that petroleum pipeline companies”
    manipulated business plans to game gas prices

  • “No evidence to suggest that oil companies reduced inventory
    to increase or manipulate prices”

  • “No situations that might allow one firm - or a small
    collusive group - to manipulate gasoline futures prices by using
    storage assets to restrict gasoline movements into New York Harbor,
    the key delivery point for gasoline futures contracts.”

Of course, as I wrote at the time and as the Post business page evidences now, a liberal anti-business talking point is too convenient for the media to discard in light of evidence.

—Ken Shepherd is Managing Editor of NewsBusters


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Long-time lurker, only made o

May 13, 2007 - 16:43 ET by bretzysdude

Long-time lurker, only made one comment before. 

I would like some clarification here; please don't flame, I am one of you.  I'm trying to understand.  It discourages me that one day Friday, the BP nearest here raised their price twice in one day:

Friday 9am: $3.09

Friday noon: $3.19

Friday 8pm: $3.23

This made them the highest-priced gas station along the highway.  Could somebody please explain why a gas station would change their price twice in one day?  I'm confused.

bretzys,Usually it has to do

May 13, 2007 - 16:54 ET by Blonde

bretzys,

Usually it has to do with the wholesalers....they fax the retailers with their spot prices several times a day.  The retailer reacts to cover his inventory, which will no doubt be expended and replaced with the higher priced product tomorrow.

Discouraging, yes?  But that's the reality of it.

I know this because I used to do accounting for a small oil company, many years ago.  At that time, the prices were updated twice daily, but I'd imagine in a market as volatile as it is now, the wholesalers are updating their prices multiple times per day.

BTW, welcome to the boards.  Enjoy.

Thanks very much.  I do appr

May 13, 2007 - 17:00 ET by bretzysdude

Thanks very much.  I do appreciate the clarification.

I also appreciate the welcome.  I'm not as clever in my retorts against the ridiculous celebrity libtards that appear in the news, so that's why I haven't been commenting.  However, it's good to hear so many people annoyed at garbage that Rosie, Sharpton, Matthews, et. al., spew on a daily basis.

de nada,Just jump right in an

May 13, 2007 - 17:04 ET by Blonde

de nada,

Just jump right in and enjoy yourself....you'll find we're a pretty friendly lot (well, except to the trolls)....and you can learn an alot of very interesting things from the posters here.  I know I certainly have.

I do have some experience i

May 13, 2007 - 18:28 ET by TheGuru22

I do have some experience in this field. The station you saw was an individual owner/propriator of a station. He has total control over his own pricing (also relative to what he buys it for). He likely saw an increase early, raised, then saw a second estimate and raised again to get the margin on the gas so he could pay for his next load of gasoline.

Many times, these individual owners will make decisions based on the whims in their own mind over sound business decisions. Since they price their own gas, you can see some pretty unusual decisions with prices. The guy with the over $4 gallon price in SF is a perfect example. He was pissed at Shell for raising his rent. He then priced to get noticed with Shell's name on it and the predictable media bought it hook line and sinker.

Late,

The Guru