Again, the awful truth behind high gas pump prices


Expanded from the 7-2-00 Sparks (Nev.) Tribune

You can lead a horse to water, but you can't make him drink. Buy 'em the book and they chew on the corners. I'm sick and tired of being sick and tired. The answers are out there.

I am so tired of re-writing the story of gasoline price-fixing that I'm running out of clichˇs and catch phrases.

Millions of trees have been mulched, gigawatts of energy expended and terrabytes of cyberspace cluttered by those chronicling complaints about pump prices.

They've succeeded only at categorizing the obvious. There are even signs of surrender.

The back-to-the-farm nutsos who write editorials for the Las Vegas Review-Journal recently caved in.

"Why do people believe it's their birthright to buy cheap gasoline? Where's the phrase in the Declaration of Independence where the founders tell us we have an unalienable right to life, liberty and a gallon of unleaded for less than a buck?"

The retro-Jeffersonians of Gomorrah South went on to blame the price spikes in the midwest as the natural result of government interference in ordering a less-polluting petrol.

If they had bothered to dig a little further, they might have found out that corn-based ethanol, the principal supplier of which is world-class welfare queen Archer Daniels Midland, really doesn't cut pollution much, if at all. It just has a good Washington lobby.

"Despite the grandstanding by federal officials, the recent rise in gas prices has resulted from a confluence of factors, everything from government micromanagement of production practices to pipeline failures. Additional federal action -- which is unlikely to include further deregulation of the oil and gas industries -- will likely cause prices to rise even further," Nevada's largest newspaper lazily opined.

I say lazy because the facts really are out there, but precious few media have even glossed over the subject.

I started barking about this in 1988 after reading a front page Wall Street Journal story revealing ARCO's predatory practices in places like Las Vegas. In the early 1980's, the company established arbitrary local pricing zones designed to do three things:

1. Control the retail prices charged by their subsidiary dealers in order to...

2. Drive independent, unbranded retailers either out of business or into the arms of a major oil company, and...

3. Survive any legal challenge.

So far, it's worked like a charm. BigOil club members don't need to conspire to fix prices, they need only look down the street at ARCO's signs.

The game is simple: jack up prices on any excuse but only lower them slowly. Over time, the independents will either fold or become assimilated into the branded BigOil collective.

Tuesday may be Independence Day, but not in the oil business. The dominance of the west is almost complete. Independent gasoline outlets are close to extinction.

One Reno dealer recently told me that he fears ARCO, now that it has been acquired by one of the legendary Seven Sisters, British Petroleum, will drop the price-zone strategy because the western oligopoly is now pretty much in place. (A monopoly, "mono" meaning "one," exists when one guy controls supply. An oligopoly exists when a few enjoy a stranglehold. Hence, "oilogopoly.")

Ethanol gas mandates combined with a few production disruptions (sound familiar?) were enough to allow BigOil to expand the west coast strategy in the midwest. Several years ago, I warned that members of the cartel were buying up stations in the east and midwest in order to do exactly what's happening right now.

I recently posted my entire Barbwire Oilogopoly Archive at this website.

Read it and weep. You really are being ripped off while government officials throw up their hands and say they just can't tackle this particular styful of fat greased pigs.

I find particularly loathesome the constant consumer price index comparisons of gas prices adjusted for inflation. Only slightly less egregious are the endless charts of prices in foreign countries.

These are meaningless because they are based on quicksand. This game has been rigged for decades and decades. Retail gasoline prices in this country are the end result of a huge and very profitable con game. It does not lend itself to rational economic analysis, only to criminal investigation.

I defy you to do a web search and find anything as extensive as my archive. A few media (the Las Vegas Sun, the San Diego Union) have done good work on this, but they are by far in the minority.

Why? Oil company pressure? Conspiracy?

Nothing so sinister. It's just not a very sexy or simple story.

Easier to concentrate on O.J. or Elian. The U.S. Department of Justice goes after Bill Gates (an honorable pursuit), while BigOil has been ripping us off far worse than Microsoft ever will.

The Nevada Legislature tried to impose a remedy several years ago with the passage of a "divorcement" law limiting the number of retail outlets which a major oil producer could own. It worked for awhile, but then some local retailers started their own predatory pricing practices. Lawmakers eventually loosened up the restrictions before the cure became worse than the disease.

The answer lies in aggressive government regulation and good, old-fashioned Teddy Roosevelt trustbusting against these bullyboys. We haven't had a president like that in decades and are not likely to get one unless God anoints Ralph Nader.

All we can do is spread the word, which is why I keep re-writing this same, tired, worn, unsexy story.

Happy motoring.

Be well. Raise hell.

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© Andrew Barbano

Andrew Barbano is a 31-year Nevadan, a member of Communications Workers of America Local 9413 and editor of U-News, where the past four years of columns may be accessed. Barbwire by Barbano has originated in the Sparks Tribune since 1988.

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