The price of a gallon

pump-stylizLike many motorists, I have a couple of gas stations in my neighborhood that serve as a bellwether for retail gasoline prices. This week, they showed a continuation in the decline in pump prices that began in early September. Here in the Mile High City at least, prices are south of three bucks a gallon.

Nationally, prices have bumped around $3.243 per gallon for the past month, according to Gas Buddy, the most popular source for retail prices on the Internet. The American Automobile Association, usually the runner-up source, relies on Oil Price Information Service, a subscription source that’s acknowledged as most accurate. On Monday, Dec. 9, OPIS showed the national average retail at $3.239/gal.

Either way, that’s down about half a buck from a 2013 high water mark that was set back in February.

Should I wait for retractions from all those who declare that prices are too high and demand that somebody, anybody, but probably somebody in the government, step in and claw back the unconscionable profits the industry rakes in? I’ve looked but nobody seems to care anymore.

Nobody seems to care, at least until prices ride back up during seasonal blend changes and refinery turn arounds that come every spring. Or it could be political tension in the Middle East. Or it could be a pipeline break somewhere in Alaska. It often a surprise but whatever it is, there’s still an impact on the price we pay at the pump.

But the truth is that prices go up and prices go down. That’s how it is with commodities. Bad weather in the Midwest means grain yields could go down come harvest time. Basic economics tells us that with less grain on the market, the price will probably go up. On the flip side, some say that in their rush to don the Fair Trade mantle, coffee retailers have artificially driven up the price of coffee for everybody.

To be sure, commodity prices can be influenced by any number of outside factors, ranging from monopolies to natural disasters to government price supports. But the fact remains that people want and need commodities and will pay for them, at today’s price.

The real question is what price is fair?

With gasoline, in my view it’s the ultimate commodity. No one ever says they’re not paying enough for a fill-up. Some people will drive 10 miles out of their way to save two cents a gallon while others only stop for gas on their way home without giving it much thought. But when the gauge nears “E” we have to stop and refuel.

As American’s, we are wedded to our cars, SUVs and pick-up trucks. And so, we love to hate the oil companies because we’re conditioned to think they are the reason we are paying too much at the pump, no matter what the price. But for now at least, that price appears to be a bargain.