Monday, September 15, 2008

Greetings from soggy Chicago: Where we get soaked in more ways than one

We officially had more rain here in Chicago in a single 24 hour period (Saturday) than at any time in our history. We were going to get a soaking anyway... but the residual moisture left over from Hurricane Ike amplified matters.

And speaking of soaking. Last week, before Ike, gasoline prices in many parts of Chicago had slipped below $4 a gallon. A Citgo station in Niles was down to $3.92.

As I told Youngest Son as I filled up our car on that occasion, the human spirit is remarkably adaptable. We can exult at being gouged for $3.92 for a gallon of gasoline when only a year ago we would have been searching for torches, pitchforks and tar at the very thought.

Then the Weather Channel began broadcasting minute by minute updates of Ike's progress in the Gulf of Mexico.

It is true that a large portion of the gasoline refining capacity of the United States is concentrated in the Gulf region. It is also true that the refineries had to be powered down and secured in anticipation of the storm. Common sense and elementary economics suggests that these actions would, eventually, have an impact on prices.

But overnight?

Within a day of filling up for $3.92 a gallon, that same station posted a new price: $4.09. Nor was it alone.

Nationally, gasoline prices allegedly went up seven cents in a single day (an increase of 17 cents between Friday and today, according to MarketWatch).

In Chicago, though, gasoline prices went up far more. At this one station, it went up 47 cents in the week. That $4.09 went to $4.29 and then to $4.39 on the next day.

Most of this occurred before Ike hit and all of it occurred before any possible damage to the refineries could be assessed. But, of course, everyone concerned denied any price gouging and the populace seemed accepting of these bland reassurances.

And there's good news! Reuters reports this morning on Yahoo! News that crude oil prices have fallen significantly because Ike didn't do nearly as much damage as was feared and because, in the latest fallout from the mortgage crisis, Lehman Brothers has filed for bankruptcy.

And here's the best part -- at least if you're a multimillionaire CEO in the banking or energy industries -- no one seems to be getting indicted.

Somehow, though, I don't feel like celebrating.

INSTANT UPDATE. Maybe not everyone is accepting the bland denials of gas gouging. The Illinois Attorney General is looking into gouging allegations. However, the linked article seems to suggest that the AG is looking at gas station dealers. May I politely suggest looking further up the distribution chain? Please? (Hat tip to The Capitol Fax Blog for this link.)


Empress Bee (of the high sea) said...

i heard about all that rain you had and thought about y'all there. we had some price gouging here in podunk too. the last gas we got was $4.67. we are about to drive to new orleans in a few weeks, guess it would be cheaper to fly!

smiles, bee

Steve Skinner said...

As Ike closed in on Texas last week, the news constantly reported that the price of gas was going to jump. I finally got to the gas station on Saturday and was prepared for the price spike only to find that the price dropped three cents to $3.74. Go figure!

Shelby said...

I posted about this too on Saturday.. our governor had said he'd go after the bad guys too.. we'll see.