Monday, July 02, 2007

The Worst Run Business

If you or I were in business and we ran our business the way oil companies run theirs, we would soon be out of business.

Every year, in the spring and early summer, the price of gasoline rises. The oil companies say it is because people are driving more as the weather gets nicer and vacations get underway, so the supply goes down and the price goes up. Imagine that. It happens every year, yet every year they(the oil companies) seem to be caught off guard, so the price goes up.

Every year, in the fall and early winter, the price of heating oil goes up. The oil companies say it is because the weather is getting colder and people are using more heating oil. Wow. Imagine that. It gets colder in the winter. Happens every year. But again, the oil companies always seem to be unprepared, and the price goes up.

Over the past few weeks the price of gasoline dropped a bit. There was an "unexpected" rise in inventory of gasoline. Duh! You jack up the price high enough and at least some people...the ones with some common sense, cut back on their unnecessary usage. However, just this past Friday I read that crude went over $70/barrel because of a report that inventories were down. So I'll be that gas prices will soon be back over $3/gallon, if they aren't already, just in time for the holiday.

It seems that any other company could anticipate these seasonal fluctuations in demand and plan ahead for them so as not to anger their customers with sudden price changes. But not the oil companies. They don't care. They don't have too. The only thing keeping them in business is the lack of alternatives. In other words, they are the only show in town. They are a monopoly. And a monopoly can do whatever it wants. And it usually wants to screw the customer.

So Sayeth The Shack

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