Friday, August 11, 2006
So last week when it was announced that the closure of the Prudhoe Bay-section of the Alaska oil pipeline system was going to cause an 2.6% decrease in the U.S. oil supply, I did what any rational person would have—I went immediately to my local gas station and filled up. Then a curious thing happened; as I watched for the price of gasoline to skyrocket—nothing happened! Excuse me, but isn’t it a basic law of economics that when supply is restricted, price increases to mediate demand? Of course it is! So, what happened, why no change in price? Well it turns out, my local provider informs me, that the stations were told to increase their prices almost two weeks before the Alaska announcement. Huh? Is this a blatant example of insider trading or what? For two weeks, (possibly for several months, based on some reports) the oil industry has been operating on knowledge that was not made public until last week. Where is the government when you need them? Oh, wait, I forgot, the oil industry is the government.