We’re being gouged

I am no economist. I freely admit that I don’t understand the nuances of capitalism and the ebbs and flows of international commerce. But, in my opinion (and this is, after all, an opinion column), we are being gouged.

Last Friday the price of crude oil dropped to around $100 per barrel. Compared to prices over the past few months, that’s relatively low.

Last Friday morning, the day crude oil prices were plummeting, the place where I usually get gasoline was selling unleaded regular for $3.689 per gallon. I don’t know why they do the “9/10” thing. How do you pay for nine-tenths of a cent? But that is a subject for another day.

When my wife and I traveled to the movies late in the afternoon, the price had risen to $3.98 per gallon. Oh, and nine-tenths of a cent. Two hours later, the price at the same station was $4.079 a gallon. A whopping 38 cent per gallon increase in just a few hours at a time when crude oil was selling at a low price! The excuse? Hurricane Ike was on the way.

But Hurricane Ike, at the time, had not reached land, and, as far as I know, nothing had been damaged or disrupted. Yet prices had, once again, gone through the roof with prices, in some parts of the country, being reported as high as $8 a gallon. Even President Bush warned against price gouging in a speech following Hurricane Ike. But what about gouging even before the hurricane saw land?

It’s no wonder to me that oil companies and their franchisees are compared in the minds of many to the “robber barons” of days gone by. People have to go to work. They have to get to the hospital. They need to travel to buy food at the supermarket. They must buy gasoline. I can understand why prices would go up if someone blew up a refinery or if the oil cartels were holding the nation hostage but none of that happened last week.

Last week crude oil prices dropped dramatically and prices at the pump skyrocketed. All because of a “maybe.” “Maybe” refineries would be shut down. “Maybe” oil production and delivery would be disrupted. Or just “maybe” we are being gouged.

I’m not an angry person, for the most part. Mostly, I try to roll with the punches of life, but, for quite some time, I’ve been doing a slow burn. On Fox News, for months I’ve watched Neil Cavuto make excuses for the oil companies while, at the same time, Bill O’Reilly has insisted that the oil companies are sticking it to the public. Being an ignorant clod when it comes to such matters, I have remained confused. But last Friday, I slid over into the “we’re getting stuck” column.

According to the New York Times, Exxon’s earnings for the second quarter of 2008 rose 14 percent to $11.68 billion compared to the same period a year ago. Exxon’s profits were $90,000 per minute last quarter. Shell, Europe’s largest oil company, reported a 33 percent increase in second quarter profits to $11.56 billion. Last January, a British report labeled Shell’s profits as “obscene.”

Oh, and by the way, all this during a time of declining production. Why produce more oil when you can sell less at a higher price?

As I said, I don’t understand such things. I do not pretend to have all the information or any of the answers. I just know how I feel — and how I feel is “we’re being gouged.”