From the vault, August 20, 2011 (revised):
Got gas?
Would you be willing to pay $5 (or more) per gallon for a tankful?
The answer to both questions is “yes” (although the answer to question number two might be hard in coming out of your mouth, dear reader).
A couple of months ago, the price of gasoline was around $5, due to Iran’s closing of the Strait of Hormuz as its response to the reckless bombing by U.S./Israeli warplanes. There was panic on the streets of America as motorists saw the price of gasoline go up and up and up, and no one would hazard a guess as to when it would stop. One of those streets was Wall Street; the value of stocks of oil companies went down and down and down, and stockholders tried to sell before losing their investment altogether.
Right now, the price of gasoline is at the $4 mark. One supposes that Donald Trump’s use of the U.S. Navy to break the blockade of the Strait of Hormuz had something to do with it. He will take whatever credit he can for the lowering (and blame Joe Biden for the raising!)
So, will the price of gasoline remain where it is, or go up or down? It’s anybody’s guess, don’t you know?
What is certain is that American motorists – including you, dear reader – will pay whatever the price is in order to keep your automobiles moving. In today’s car culture, owning and operating an automobile represents independence, freedom, and power in a world where all three are in short supply (and dwindling rapidly). Taking away one’s automobile by whatever means is akin to castration, and the average American motorist would sooner cut off his/her hand than give up his/her automobile. Therefore, amidst of a chorus of grumbling, griping, and muttering imprecations and not-so-subtle suggestions as to where the oil cartel can go and what it can do once there, the average American motorist will dig deep into his/her pocket and fork over the cash – and drive off recklessly into the sunset.
It wouldn’t have to be this way, of course. For two very important, but seldom spoken reasons, the price of gasoline has usually been deliberately manipulated in order to stabilize the profit margins (and the CEO bonuses) of the oil cartel.
Reason No. 1: Not all oil pumped out of the ground and/or coastal waters of North America goes to a North American refinery. A substantial quantity is shipped to foreign countries which have no oil of their own and therefore are willing to pay a premium price in order to satisfy its own needs. The oil cartel may be greedy, but it is not stupid; it will go where the most money can be had. That’s the capitalist imperative, and motorists’ preferences be damned.
Reason No. 2: Not all oil goes to a refinery anywhere. Much of it is sold to the petrochemical industry, those wonderful folks who manufacture all those plastic doo-dads you think you can’t live without – including that water bottle you’re holding in your hand, dear reader, which will be thrown away along with the billions of bottles every year. The petrochemical industry is a major stop along the money trail, and motorists’ preferences be damned.
If 100% of all the oil pumped out were converted to fuel, the price of gasoline would drop precipitously, say, to $0.20/gallon (which is what it used to be in the early days of the automobile). Since there’s not much profit in that, however, the oil cartel needs to use any and all excuses to jack up the price and therefore satisfy the capitalist imperative. And so, the automobile industry, the oil cartel, and the petrochemical industry have joined forces. The first convinces you that you need an automobile in order to fulfill the American Dream; the second provides the means of achieving it; and the third makes those means expensive.
None of this would occur if all three were nationalized.
Just a thought.