Gas Prices & Memorial Day

Dropping Prices: Two Theories

I put it in the same category as a 50 degree day in January (at least in Minnesota), or the movie theatre with the popular new movie -- and no lines: a welcome development, to be sure, but one that's still slightly unnerving.

What am I referring to?

The rather steep drop in gas prices the last few days in the Twin Cities.

That, just ahead of Memorial Day weekend -- typically a time of peak demand and correspondingly high prices.

Less Pain at the Pump

What's going on?

The rational explanation is that the economy just got bumpier, hurting demand and causing prices to fall.

The political explanation (and what isn't lately)?

The oil producers, led by BP, are in lots of hot water these days, and don't want to raise the temperature further by inflicting more pain at the pump.

Oil Company Chutzpah

Exxon Valdez South?

"Chutzpah" - standard definition: killing your parents, then throwing yourself upon the mercy of the court because you're an orphan.

"Chutzpah" - oil company version: negligently spilling millions of barrels of crude into the Gulf of Mexico, then raising prices at the pump because of the resulting shortage.

Other random thoughts about the BP oil spill:

--Defending lawsuits -- especially ones likely to span decades -- are expensive. How nice to be able to raise your prices to help defray that (future) cost.

--Instantaneously raising prices at the pump all over the Twin Cities (they're up about 25 cents overnight) would make economic sense if the oil actually came from the Gulf of Mexico.

But it doesn't.

Practically all the gas sold in Minnesota comes from . . . Canada.