I double checked the current price for a barrel of crude oil. It’s not $107. It’s more like $95. So that changes the above calculation somewhat. The price of a gal of regular gas from Dec. 2008 to today still went up by about 51% ($1.75 to $3.60) in California. Crude went up by about 58% ($40/bbl to $95) instead of by 62%. But still a 7% difference, meaning that the rate of increase was 7% more for crude than for regular gas. So the premise still stands.

Ok. Let’s choose your preferred date. July. 2008 instead of Dec. 2008. If you go back, you would see the price of regular gas in California in July. 2008 was about $4.50/gal. Not $4.11 as you claimed. But you got the price of crude right – $147/bbl.

Ok. So from your preferred time frame the price of gas came down from $4.50 t0 $3.60. A $0.90 drop. A 20% decrease. Crude oil fell from $147 to $95. A $52 drop. A 35% decrease.

Wouldn’t you expect gas to fall at a steeper rate than crude if the domestic add-ons were the cause of the higher gas prices?

Oh, and you will note that in the 5 year chart for gas prices in California that the price started it’s upward slope in 11/2008 – right after the meltdown. The sole reason for this was the massive infusion of fiat bailout dollars into the system which drove prices up largely through inflationary pressures. The economy was dead. People were losing their jobs by the millions. Commerce slowed down considerably. So ask yourself “Why would gas prices rise in this meltdown environment?”

It’s very sad today that people consider $3.60 gas a nice bargain. Just goes to show that if the frog remains in the pot on the stove long enough as the burner get turned up slowly – that submission always follows.

So do I.

But thanks for the discussion anyway despite many of my previous points going unaddressed.

It’s not anecdotal. I gave you the numbers.

I give up.

That’s nice anecdotal information, John. But all gas stations in these areas that vary in economic status do not fall into your simple example. This would be a more common example: There are sleazy gas stations in Newport Beach and then there are pristine gas stations in Santa Ana. Yet the sleazy one in NB would charge you more than the pristine one in SA. Why? Location. You would get charged more for the same gas by an inferior station in a rich area than by a pristine one in a poor area. How would you explain that? That’s certainly not ‘free enterprise’ at work. Is it?

I think you know what I mean. On average, gas prices are significantly higher in rich areas than poor areas. The wealthier areas seem to subsidize the poorer areas. I thought we reached that conclusion earlier in our discussion. But this seems to be an extension of government practices in form of taxation and redistribution of wealth. Something that this website has routinely rails against. So now I’m confused.

Actually, this is how it works. I often go to the Arco on the corner of Adams and Beach in Huntington Beach. It’s the cheapest around. It’s always crowded. I worry about someone ramming me, or dinging my car. Sometimes I have to wait five minutes to get a pump. I feed my $20s into the machine to avoid a Debit Card charge. Sometimes I pay inside, where place isn’t all that clean. The macadam needs repair. They get high volume, so often there’s a gas truck I have to maneuver around. Everybody else is rushed, like me. This is the Arco – AmPm, 19971 Beach Blvd @Adams Ave, Huntington Beach, CA 92648

Price today on GasPriceWatch.com today for 87 octane: $3.36.

A couple of years ago I was at one of the high-priced stations by Fashion Island. Not for gas, but to get a bottled water. Nobody was there. When people are there, the car aisles are wide. The pavement is smooth and recently redone. Inside the gas station, everything was shiny and clean. Of course the main payment is with credit cards. This was Chevron (#93042), 1550 Jamboree Rd @San Joaquin Hills,
Newport Beach, CA 92660.

Price today on GasPriceWatch.com for 87 octane: $3.64.

So, for 28 cents more you get the nice treatment. You get what you pay for.

If I was worth a couple million bucks, would I choose the higher-priced Chevron over the Arco to fill up my new Merc S600? You bet.

“Because it is a free-enterprise system.”

I guess we disagree on what a ‘free enterprise system’ is.

Governments generally charge those who wealthier more (in taxes) to subsidize those who are not so well off. And when government talks about another increase in taxes many at this website go through the roof.

Yet, when a corporation conveniently charges people who live in better neighborhoods more for the same product to subsidize those who happen to live in poorer neighborhoods – all the sudden it’s called ‘free enterprise’. Oh sure, those who live in better neighborhoods are ‘free’ to drive to poorer neighborhoods to fill up. But then that’s not really being ‘free’, is it? It’s imposing an inconvenience on those who live in a well-to-do neighborhood (even though they might be poor too!) to get the same product at a lesser cost due to their choice of residence. That’s not ‘free at all. enterprise’.

“Short distance geographically, long distance demographically.”

I thought you were an advocate of flat-taxes? You know. Where everyone pays the same tax rates. Yet you are in favor of paying a higher rate for your gas than someone in a more challenged demographic class? Should Apple charge less for it’s iPad’s in East LA than in West LA? It stands to reason that you would be in favor of that too since you seem to have no problem with the discriminatory pricing of gasoline. How about big screens, refrigerators, stoves, washing machines, beds, living room furniture, etc…. Should be have discriminatory pricing based on choice of residence for all those items too in our ‘free enterprise system’

“The prices at the pump are determined by local market conditions, which include in many cases local owners of the stations.”

I suggest you talk to a gas station owner near Fashion Island and ask him why he and his neighboring gas stations charge much more per gallon than the owner of a gas station in Santa Ana. Ask him whether he is free to set that price or whether he is charged more for the gas that he buys from the distribution network and must charge a normal mark-up to stay in business (just as the Santa Ana gas station owner must do). Ask him whether his mark-up is greater than the mark-up applied by the Santa Ana station owner.

“The Taurus drive thinks, “I’ll make sure I fill up at the cheap station the next time I’m driving up Harbor.”

Point missed. That places an inconvenient hardship on the low-income Taurus owner who happens to rent in a higher income neighborhood. He should be able to fill up around the corner at the same price he could on Harbor in a ‘free enterprise system’. He shouldn’t get punished economically for where he chose to make his home. That is not ‘free enterprise’. That’s a form of socialism.

Let me go back to the example of the color-coded shopping card that would identify consumers by their income brackets. Would you be in favor of that? Let’s say 5 different colors. And when you went to the register the clerk either rang up a surcharge or a discount OFF THE MARKED PRICE based on which color-coded bracket you fell into? How would that really be much different that discriminatory pricing by class of neighborhood?

“I don’t know about that situation. I was in the U.S. Army in West Germany from 1979-82, but the U.S. taxpayers paid for the gas and diesel in our jeeps and trucks.”

Not referring to the US Army. I was referring to the european economy. The gas prices there were indistinguishable among the rich or poor neighborhoods.

“But wouldn’t price differentiation by location — of which there isn’t that much, really, just in the richest areas — be part of a free society, not a socialist one?”

No. You mentioned Orange County. South Orange County gas prices are significantly higher on average than Central Orange County gas prices. All of South OC is not ‘rich’. Yet they are made to subsidize the people living in Central OC by corporations. I would expect that behavior by a government. Not a corporation. That is not a ‘free society’.

I respect your responses. Many website hosts wouldn’t engage in such a discussion. Thanks.

Put your card analogy again if you want me to comment on it; I can’t see it. On your other points:

“Why should a person get charged more or less for gasoline based on whether he lives in a rich, middle class or poor zip code in a free enterprise system?”

Because it is a free-enterprise system. I live in Huntington Beach, where the local pump prices are among the lowest around. But I sometimes go to Newport Beach, where the stations on PCH and around Fashion Island charge a premium. The real estate there costs more, as one commentator noted. And the stations are in much better condition. The rich locals, as I indicated, also don’t mind paying more. It’s a prestige thing; or maybe they might meet a new billionaire business partner at the pump. They could drive 5 miles to fill up in HB with the hoi polloi, but they don’t want to. It’s like how an upscale restaurant will charge more for the same beer than a local dive.

Of course, most rich folks in NB probably fill up at the cheap places in HB or Costa Mesa. But enough buy the high-priced gas near the coast to make those stations prosper.

“It’s common for the price of gasoline to be priced significantly higher in a rich zip code (West LA) than in a poor zip code (East LA) even though only a short distance of travel may separate the two areas.”

Short distance geographically, long distance demographically.

“I understand progressive tax systems. And I agree with progressive taxation to a point.”

I don’t.

“I just don’t understand discriminatory pricing systems that, in part, set gas prices based on the socio-economic status of a certain zip code…. Why should the oil companies price gas that way?”

See the above. The prices at the pump are determined by local market conditions, which include in many cases local owners of the stations.

“Apple doesn’t price their iPods that way.”

That’s because Apple has almost total control over their distribution network. And at this point, rich folks don’t even have iPods, but iPhone 5S’s. By contrast, my $99 Android from Target — I’m not sure even who manufactured it — is cheaper than the $700 Samsung Android a rich person buys at Fashion Island. And I can’t afford an iPod.

“To respond to your previous comment, should a low-income ’95 Taurus driver who is cost conscious but happens to rent in a rich zip code get surcharged on gas by virtue of his choice of residence? And should the Rolls driver who chooses to live in East LA get a price break on his gas when he couldn’t care less about spending $0.50 more per gallon?”

The Taurus driver would make sure he filled up at a cheap gas station. For example, if you drive away from pricey PCH in Newport Beach, about 2 miles up Newport Blvd., then Harbor Blvd. in Costa Mesa, you find cheap gas stations. The Rolls driver thinks, “I’m not going to go out of my way, and don’t want to mix with the hoi polloi at the Tesoro station.”

The Taurus drive thinks, “I’ll make sure I fill up at the cheap station the next time I’m driving up Harbor.”

“Even in socialist western europe the price of gas is virtually the same whether you buy it in a poor district or a rich district of a city.”

I don’t know about that situation. I was in the U.S. Army in West Germany from 1979-82, but the U.S. taxpayers paid for the gas and diesel in our jeeps and trucks.

“I’m only emphasizing that America is becoming more and more one of those ‘from each according to his ability – to each according to his need’ nations by the day. That’s not what made America a recognized superpower.”

But wouldn’t price differentiation by location — of which there isn’t that much, really, just in the richest areas — be part of a free society, not a socialist one?