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Global inflation fears as oil price rises towards $100 a barrel (www.theguardian.com)
submitted 2 years ago by to c/world@lemmy.world
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[–] 94 points 2 years ago (4 children)

Haven't we had oil at $100 a barrel before, and not that many years ago? And yet fuel and energy prices were lower.

It's almost as if the price the consumer pays has absolutely nothing to do with cost.

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  • [–] 43 points 2 years ago (1 child)

    Yeah, but how are they supposed to keep record profits when their costs are so high. /s

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  • [–] 6 points 2 years ago (1 child)

    It’s actually pretty well correlated once you remove state taxes, which have increased significantly in some states like California. Mississippi gas, for example, is cheaper now than 2010, with respect to crude prices and discounted for inflation.

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  • [–] 15 points 2 years ago* (4 children)

    Gas was $100 a barrel under Bush. It was like $2 a gallon.

    Dad said "Jesus criminey were not going anywhere for a week!"

    V.V I paid 3.75 a gallon 3 days ago.

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  • [–] 9 points 2 years ago (1 child)

    I remember seeing $5/gal under Bush. His last year had an average of $3.30 and peaked over $4... https://www.yahoo.com/lifestyle/gasoline-prices-fared-under-last-190000869.html

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  • [–] 1 point 2 years ago (1 child)

    yeah gas hasn't been $2 a gallon for quite a long time in the United States

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  • [–] 3 points 2 years ago (1 child)

    It was under $2/gal during the first summer with covid.

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  • [–] 3 points 2 years ago (1 child)

    Which state? $2 in 2001 is worth $3.46 today thanks to inflation.

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  • [–] -1 points 2 years ago (1 child)

    But gas tax isn't tied to inflation and it's a fixed dollar amount per gallon (not a percentage), so $100/barrel should be relatively close to the same as it was in in the mid-2000s, yet it's doubled.

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  • [–] 3 points 2 years ago* (1 child)

    Why do you think gas isn’t affected by inflation? Costs go up with inflation. This increases the price. Remember that the cost of the commodity itself is effectively zero. The cost is all in exploration, extraction, refinement, transport, and sale. All of that goes up with inflation.

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  • [–] -2 points 2 years ago (1 child)

    The price per barrel includes almost all those expenses, so inflation should be reflected there.

    The rest is offset by a gas tax that's deflationary. The federal tax of 18.4 cents per gallon hasn't changed since 1993.

    The price at the pump should be correlated much more strongly with the price of a barrel than with inflation, and the price per barrel was similar or higher during the Bush administration.

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  • [–] 0 points 2 years ago (1 child)

    The price per barrel includes almost all those expenses, so inflation should be reflected there.

    Right, which means that the inflation adjusted price of oil today is significantly lower than it was in 2008.

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  • [–] 1 point 2 years ago

    Yes, but the price at the pump isn't reflective of the current price of oil, which is the whole point of what I'm saying. The price of oil hasn't kept up with inflation while the price at the pump has outpaced inflation.

    There's some fuckery there.

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  • [–] 2 points 2 years ago (1 child)

    I imagine everything else became more expensive too, labor, shipping, processing, etc

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  • [–] 1 point 2 years ago

    labor

    Wages haven't been going up that much though. Not as much as inflation, not as much as prices. Shipping and processing costs, too, haven't actually gone up significantly - there's no particular reason for it to cost more to do the things we've already been doing.

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