Re: Re: High cost of fuel...Reason?

Posted by Paul in Mich on June 07, 2004 at 15:02:10 from (68.188.227.110):

In Reply to: Re: High cost of fuel...Reason? posted by Brian in Kansas on June 07, 2004 at 11:18:52:

Brian, you are right about one thing. The government deregulated the oil industry, AND the industry closed refineries, not that the refineries closed BECAUSE the government deregulated the industry. This was not a cause and effect here, only a sequence of events. Deregulation in any industry creats more competition, therefore the price of the product is established through supply and demand. No program that has been regulated by government has ever brought us lower prices. That is a total myth. Regulation decreases competition, which historically has led to less market based prices, and ultimately higher prices. Government can only affect the "cost" of a product or service, while free enterprise is the only entity which can establish a fair and competitive "price". Free enterprise allows competition which allows for lower prices. Government control only establishes a "cost" and is not a "price", because it is not negotiable between seller andy buyer. Government is not held accountable for the cost of a product of service. It is ridiculous to think that the oil companies are making more money because they dismantled the refineries, thereby not being able to meet public demand for their product. Business just doesnt work that way. If you want to sell more pizzas, do you decrease your oven capacity so that you cannot meet the demand of the pizza buyer, thereby allowing you to increase the price of the pizza? The answer is NO, because the "cost" of making the pizza does not decrease just because you shut one of the ovens down, and if you cant meet demand, you cant just automatically increase the "price" of your pizza to make a profit, because the competition has his all his ovens operating and is able to meet the demand of "YOUR" customer, and at a competitive "price". The Oil industry is no different. They are all competing for your dollar, just like the pizza shop. If they could, they would increase the capacity to sell you more oil and oil products. Regulation, and the dismantling of the refineries because of the environmentalists pressure limits the oil companies to create that competition and it leaves you and I out of the "price" loop. Just another lesson in ecomomics 101.

Follow Ups:

• Re: Re: Re: High cost of fuel...Reason? Ben in KY 10:26:03 06/08/04 (1)
  • Re: Re: Re: Re: High cost of fuel...Reason? DL 10:44:21 06/08/04 (0)
• Re: Re: Re: High cost of fuel...Reason? Ron 17:15:37 06/07/04 (1)
  • Re: Re: Re: Re: High cost of fuel...Reason? paul in Mich 04:26:20 06/08/04 (0)
• Re: Re: Re: High cost of fuel...Reason? Alan 15:11:50 06/07/04 (0)

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