By William B. Conerly, Ph.D.
Guest article from Cascade Policy Institute
Why have gasoline prices come down so much? Certainly global prices for crude oil have dropped, but why did the local gas station operator drop prices that you and I pay? A year ago I filled my tank for $3.32 and nine-tenths. If I was willing to pay that price last year, why does he charge me a dollar a gallon less this year? The answer is greed.
Yes, my gas station owner is a greedy man. If he had left his price unchanged in the past year, wouldn’t he be making an extra dollar a gallon profit? (The average markup of gasoline over wholesale costs and taxes is just 17 cents, so an extra dollar would be a huge gain.) Well, the gas station owner would like to leave prices high, but greed gets in the way of his profit.Read the full article and discuss it »