Energy Prices to Spike This Summer
On-Going Effects of the War in Ukraine and Record Profiteering
Inflation in April fell from record highs that we saw the month before, but the 8.3% inflation rate is still high. The high costs of energy and housing are partially responsible for the extreme inflation and it’s likely to get worse before it gets better.
While the Federal Reserve raised key interest rates last week in an attempt to hold-down run away inflation, the federal government has taken no action to slow down profiteering related to the supply chain issues. Gas prices hit record high levels in the United States and energy companies posted record profits.
Here in Pennsylvania, electric providers have put the state on notice that electric prices may jump anywhere from 9 percent for PECO customers in southeastern Pennsylvania to almost 45 percent for West Penn Power consumers.
This fleecing of the American consumer needs to stop.
The problem is that the United States has not been enforcing laws about price fixing or war-time profiteering for decades and has instead focused on the doctrine of greed. Corporations tout their fiduciary duty to stockholders to try to make as much profit as possible instead of looking at any type of corporate responsibility to ease international financial woes.
Worse yet, most of the supply issues the industry is facing are of their own making, with many deciding not to pursue drilling on properties they already have access to because the price per barrel of oil is not high enough to justify drilling costs. In the meantime, they blame the lack of drilling on moratoriums on NEW oil leases on federal lands and pretend there is nothing they can do to increase the supply of domestic oil.
At it’s heart. the problems causing inflation are a part of capitalism, unfettered capitalism. More than a hundred years ago, the United States Supreme Court found that Standard Oil was abusing anti-trust laws and using anti-competitive practices to create unfair profits for the company.
Since then, however, the United States has leaned more and more toward unregulated capitalism, giving corporations more and more power, weakening labor laws and ignoring, not enforcing or weakening anti-trust laws.
Anyone who can think for themselves knows that there is no way that the gas stations in a particular area all just magically are charging the same price for gas. The corporations will make excuses about the prices being dependent on the refineries, but again, thinking people know that’s not true.
Personally, I know it’s not true because I saw how price fixing at gas stations was done in the late 1980s.
One summer I worked at a gas station and convenience store just outside of Detroit. I worked the morning shift, usually starting my day at 6 a.m. when the manager did.
One of the things Mary, the manager, was required to do every morning was to call corporate with the price our competitors were advertising for gas. She would drive a small circuit of the stations within a couple miles of us and write down the prices on their signs.
Once corporate had those numbers, they would tell her whether to raise or lower our prices. It had nothing to do with supply and demand. It was solely based on what everyone else was charging.
I suspect it’s much easier now with apps and websites that let you look at gas prices in a specific area. Now, the local manager doesn’t even necessarily know that this is happening. They just get a call from corporate and raise prices accordingly.
I sincerely doubt the oil and gas industry is the only place this occurs.
Unless or until the federal government steps in and stops price fixing and enforces anti-trust laws, companies will continue to abuse the American consumers and there isn’t a darn thing we can do about it.