Gasoline Pricing

The Oil Drum has a great post up today detailing some of the longer term causes (a link is provided to another post on shorter term causes) of gasoline price increases. It a very good and in-depth discussion, put in laymen terms, of just how gasoline pricing occurs. The post also examines many of the suggested causes, i.e. oil companies controlling refining capacity.

My only comment is this. Whether you see oil company malfeasance or not, it seems to me that gasoline is finally being priced correctly. The hidden costs are being realized. For example, if you don't want a refinery in your backyard (and I wouldn't), then you're voting for higher prices in a petroleum world. That vote would increase prices for gasoline. If your behavior is not conservatory, then you are also voting for increased prices. If you don't want co2 emissions, you're voting for increased prices in gasoline. If you don't want ozone, then your voting for higher prices in the form of additives/technology to reduce those effects.

As any and all the factors negative to a petroleum economy get more prominent ... and more urgent ... the price of petroleum based products must go up to reflect the true recognized costs. That's what is happening and will continue to happen for the foreseeable future. Until and unless there are 1) huge new supplies found (ain't happenin' nor is it likely to happen, and still wouldn' t mitigate the evolving recognized environmental "costs" of petroleum or 2) a decline in consumption of petroleum, expect prices to maintain a steady upward climb.