CHEAP GAS AND OTHER ILLUSIONS

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Here I go – retreating to my “Back in the day” description of how things were in the Thirties and Forties. Please bear with me.

So how was it back in the olden days? I’ll compare a few things between ancient and now.

NOW – TODAY

I just gassed up at a station that always has the cheapest gas in San Francisco. The present price is almost Four DOLLARS per gallon. That’s right, the cheap gas is four dollars.

Once in a while a person somewhat younger than I will ask “What’s up with this rapid rise in the price of gasoline when their costs couldn’t possibly have risen so quickly?

My simple answer to them is, ’They raise the price because THEY WANT TO.” And I am confident that my answer is more often true. And that reasoning, dear reader, defines me as a geezer, because (And here, I drift off) I remember when things were different and because they were understood!

I am old enough to have taken an economics course (Econ 101, I think it was.) and remember how Capitalism in the United States was SUPPOSED to work – the secret was COMPETITION! It is supposed to work because if some product was essential to every day need and/or desired, industrious people would found companies to sell that product. They would advertise and attempt to gain a slight market advantage by offering better service and cheaper prices than the other guys. You see…they would compete to sell more, and earn more money IN THE LONG RUN. They were not out to become millionaires overnight.

I take you back to Tulsa in the 1950s. Across the river was the giant INDEPENDENT refinery, and it sold gasoline and diesel fuel at their price to any wholesale company with a tanker truck. There were small oil companies (My brother in law formed a company and leased two independent stations, becoming “Apex oil Company.”) all over the area, while the major oil companies had their own refineries, stations and distribution systems.

As a result of COMPETITION, gasoline prices were always reasonable…always cheap in fact. I remember prices of nineteen and twenty cents per gallon.

But CHEAPEST was not enough when the market was so competitive! The small oil companies had to come up with ways to get you to stop by. (Remember, these were the days when, rain or shine, an ATTENDANT filled your tank, washed your windshield, topped of your radiator and added oil if necessary…..while you sat in your car!)

Some of the ways to entice you to their pumps for their cheap gas included the issuance of “Green Stamps” with your purchase. In case you do not know, Green Stamps were distributed with sales to give you an extra bonus, something you could place in booklets

and later “redeem” for items you liked. Another way was to give you one piece of tableware for each fill-up…. matching plates, cups, saucers, etc.. If you stayed with a station long enough, you’d have a complete set!

It was, and is, a no-brainer: Competition helps to keep prices competitive and that will benefit the consumer.

All of this was understood by the biggest of businesses in the mass consumption market, so what could the big guys do to get more of that lucrative market away from the smaller outfits?

Get rid of competition, “If only we big guys are left, we will be able to work out this competition thing and earn bigger profits.”

Does the big business thinking work? Look around you. When I moved to San Francisco there were independent service stations everywhere….down the hill on Divisadero and out on Geary toward the ocean…and elsewhere. A couple of

independent stations remain on 19th Avenue, and a very few are spotted here and there

For some reason, independent stations began to disappear, and I mean disappear, as they were physically removed and the lots where they stood lay idle for a long while. ( I think that was an environmental issue involving the removal of the underground tanks and the return of the soil to a better state.)

There were rumors about the major oil companies’ involvement, but I don’t know anything about that. It is true that the land occupied by these former independent stations was getting more and more valuable. I know there are multiple housing units at some of these locations.

Do you know how many Oil companies are selling their products in San Francisco today? Only one of the smaller of them will sell their product below the generally established price, and that company sells for cash or for debit card plus a sur-charge.

The lack of competition sometimes results in a next step – price fixing !

Some “Big Pharma” companies selling generic drugs- is being investigated by the State of Connecticut, according to last Sunday’s edition of “60 Minutes.” The State’s prosecutors displayed letters and e-mails communications among the companies to show they secretly coordinated obscene, rapid increases in their prices….simply to increase their profits! Many of these drugs are must-have, life or death medicines for many of us, and many of uscannot afford to pay the new prices.

So what will happen? From past experience, we suspect that: the State of Connecticut will prevail, the courts will inflict a huge fine upon the Companies, and they will pay them… and the CEO’s will be give bonuses. The companies will still be in charge of the generic prescription drugs and will set the prices.

But, maybe not this time! If our Congress gets involved and if Connecticut wins its case and puts a few people in jail… or if Congress simply puts some teeth in their monopoly laws. Right now, some states and even some local government have taken action.

But, even I, geezer that I am, do not expect to get back to nineteen cent gasoline, and I certainly do not think I will ever again pull up to a station and get a fill-up, oil check, cleaned windshield and a “Have a good day.” (Maybe in Oregon?)

But what if some enterprising man or woman bought an Independent service tation, made an arrangement with a nearby refinery and advertised FULL SERVICE again, with attractive young men and women in neat blue outfits, with names embroidered? Could not this person make a mint by charging an extra quarter per gallon? I have this vision of lines around the block, followed by copycat stations. I’d certainly pay for that.

Meanwhile, we have to pay the big bucks, don’t we – that is if we want to hang around and buy all of our gasoline here. But if you travel one inch out of California, you will find a great difference, as the markets out there are less concerned about “clean gas”. For example, on one of our trips east (See below) I will most likely find that I will be saving as much as TWO DOLLARS per gallon.

Later this year, we will get to enjoy the illusion that we are saving a ton of money as we gas up again and again!

Later this month, we will be driving to Denver for a visit with our son. In august, we plan a trip to Jackson, Wyoming, for a classical music week. In November, we’ll be driving to Nancy, Kentucky, where Lee will be in a Mountain Dulcimer workshop, and I will be nearby (in Berea) to learn all I can about the art of Clawhammer Banjo.

I’ll be reporting on those travels as each is completed and we return.

In Town

When ice cream was a nickel, I searched and found a dime. My sister was at play at home and all she owned was time. On the way, I licked her cone and thought of what she’d say, I paused instead, held out my hand and gave my own away.

In The Woods

I made a game for her and me played o’er a split-log fence – called it Fancy Paddle Ball-

I’ve thought of that ever since. She never had the knack or skill, but with her laughter repaid for every hour in the deep, dark wood where otherwise could have lain.

– Charles Brad

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