Regular Sac Rag readers know that we love to debate the principles of supply and demand as they pertain to the Sacramento housing market. With that in mind, I’d like to offer up a preemptive discussion about gas prices and the proposed annual Gas Boycott that is surely making it’s way to your electronic mail inbox.
A boycott of a couple of brands of gasoline won’t result in lower overall prices. Prices at all the non-boycotted outlets would rise due to the temporarily limited supply and increased demand, making the original prices look cheap by comparison. The shunned outlets could then make a killing by offering gasoline at its “normal” (i.e., pre-boycott) price or by selling off their output to the non-boycotted companies, who will need the extra supply to meet demand. The only person who really gets hurt in this proposed scheme is the service station operator, who has almost no control over the price of gasoline.
While we’re on the topic, don’t forget to visit this site to find the lowest prices in our fair city.
The Sac Rag 
Yeah, a boycott sounds like a dumb idea. What I wonder is whether gas prices are going up because of a market instability due to Iran (i.e., a temporary psychological effect) or due to lack of refining capacity a la Katrina (i.e., a longer, more fundamental effect). Or are we experiencing a confluence between the two? It really didn’t seem like the market worked through all the damage Katrina wrought to our refining infrastructure. The Brits did lend us a lot of gas post-Katrina, and that couldn’t go on forever. On the other hand, the oil companies do seem to err side of screwing the consumer when possible instability in the Middle East looms.
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Also, let us never forget that $0.46 of what you pay per gallon is taxes. That’s 19%.
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