After today, the test becomes officials. The oil companies will have a pretty good idea of how much we'll pay for a gallon of gasoline without affecting demand.
Gasoline prices have been steadily climbing the past few months, giving all those involved in petroleum products -- from those who pump it out of the ground to those who sell it at the local filling station -- a chance to learn just how much we're willing to spend on fuel. Now, with the holiday weekend, they'll know what they need to know to fine-tune their pricing. Indications are, they've found our breaking point.
About one-third of all Americans plan to travel this Memorial Day weekend, according to a new report from Deloitte & Touche, but nearly a quarter of them have changed plans due to the pinch at the pump and 12% have canceled road trips altogether.
Come Tuesday, we'll know if that prediction is correct.
The goal is to price fuel as high as possible without affecting demand. That way they can sell the most fuel at the highest price. It's the sweet spot of profitability.
But it only works if the oil producers work together to ramp up the price of crude oil. That gives the oil companies some shelter when they're called on the carpet by Congress to explain the high prices.
And so while the Bush administration is spending billions on an unnecessary war and cutting taxes for the rich, business is soaking us for obscene profits for fuel and home loans. Neither has much regard to how it affects the people whose money is paying for this largess.
Those of us who fall below the line that elevates the upper class are lab rats in this economic experiment. Our role is to make the machine that transfers money upward more efficient.
And if there isn't enough money, we need to work longer or take an additional job so the experiment can continue.
-- Jim Grinstead
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