Letters to the Editor

Letter | Gas prices in Myrtle Beach area don’t make sense; time to regulate oil

We are all being subjected to the seesaw world of gasoline prices; however, there are some interesting points to ponder.

If you are listening to the news, you are reading or hearing that the economy is taking a real hit because oil prices are so low. It is supposed to be negatively affecting global financial market systems.

As users of gasoline in the United States, we know about the frequent raise and drop in crude oil and how it affects our wallet -usually at a very inopportune time. We read the news about the Eastern countries, such as Syria, Iraq and Iran, not to mention the many Islamic wars going on around the world, which all are drawn into the equation used to define the cost of crude oil and how it relates to our neighborhood service station.

We watch as the price of our gasoline at the pump fluctuates dramatically higher than lower on a daily basis, and if you are like me, you get a bit annoyed when the price goes up between 10 cents and 20 cents a gallon overnight then takes three to four weeks to drop by a penny or two.

It is also interesting that when the price of gasoline goes a bit lower, it is for a very short period of time before it rises again, hence the seesaw effect.

I can't help but wonder why the service stations are not regulated in such a way that the consumer is protected from this price gouging - and it is gouging. When a service station charges a given rate per gallon, supposedly based upon the price they pay that for that particular delivery, it is price gouging when they raise the price per gallon 5 cents to 20 cents for gasoline that has already been in the tanks well before their next delivery.

In the Myrtle Beach-Conway area, gasoline prices are anything but regulated. Gasoline prices can be as much as 10 cents to 15 cents higher or lower, depending upon the area. We all know that it is more expensive for gasoline closer to major highways, such as the interstate system.

Why?

It’s simply because there is very little regulation by the government. The oil companies decry that they are losing millions of dollars when the price of gasoline drops even a few cents. What they are failing to tell you is that those millions “lost” do to those few pennies is strictly profit.

Do the math.

When you look at quarterly profits of the oil companies, and that is after all operational payouts, including fines, which are calculated in the billions, a few million dollars less in profits is miniscule.

Oh yes, they also forgot to mention the taxpayer money oil companies get as subsidies from the government. Yep, they still get them in the name of research and political donation restitution.

The political donations are not all illegal, but they do swell the profits of the oil companies, which more than make up any small profit loss due to reduced gasoline prices.

The oil companies, along with top government officials, also decry that lower oil prices is harming economic growth. On the other hand, one only has to calculate the harm rising oil prices actually does to the economy.

Every operation and business in the United States depends upon oil. Every manufacturer has a stake in oil.

Every time the cost of oil rises, the domino effect begins. The cost of fuel to transport goods, the manufacturing operations of making the millions of plastic products, as well as nearly every product manufactured, public transportation, especially the airlines, processing of foods (those berries in your muffin batter are not true fruit; they are a by-product of petroleum), all increase dramatically.

As each cost of the thousands of operations increase, the cost goes up to the consumer because, by law, all businesses are permitted to pass any and all increases to the consumer.

After you do the math, you will find that those dime increases in gasoline and fuel may lead to a very tiny percentage loss to the oil companies, less than 1 percent, while the consumer’s loss is closer to 20 percent to 40 percent. The oil company sells oil; the consumer has to buy everything to live.

Believe me when I tell you that the oil companies know that and really do not give it a second thought. They just want all of your money - period. Don't forget, South Carolina Gov. Nikki Haley has approved the gasoline tax increase after vehemently saying she would veto any proposed raise in the gasoline tax, but that is another story.

What can consumers do about it? If history is any kind of a barometer, I am afraid not much. What about using our own vast shale oil and natural gas deposits to lower the price of gasoline here in the United States instead of exporting it to other countries? What a concept.

The writer lives in Conway.

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