Do you feel that we are being gouged with higher prices that reflect more than the increase in fuel prices.?

Question

Are merchants using this as an excuse to raise prices more than what the increase in shipping etc. is costing them?

Answer 1

Well, they have to pay for their merchandise to be shipped, and their usual means of shipping take gas. Gas is more expensive for the shipper, so they have to charge more to do it, and that's reflected in the merchant's prices.

HOWEVER, the fact that the price for barrels of gas has gone down $4 and YET, the price of gas is still going up leads me to believe that yes, in some way we ARE getting gouged.

Answer 2

Taken from an article about oil prices in this week's Economist:

"Stuck for answers, politicians have been looking for scapegoats. Top of the list are the speculators profiting from other people's hardship. Some $260 billion is invested in commodity funds, 20 times the level of 2003. Surely all that hot money has supercharged the demand for oil? But that is plain wrong. Such speculators do not own real oil. Every barrel they buy in the futures markets they sell back again before the contract ends. That may raise the price of “paper barrels”, but not of the black stuff refiners turn into petrol. It is true that high futures prices could lead someone to hoard oil today in the hope of a higher price tomorrow. But inventories are not especially full just now and there are few signs of hoarding.

If the speculators are not to blame, what about the oil companies, which have failed to increase output in spite of record profits? Profiteering, say some. However, that accusation doesn't stand up to much scrutiny either. The oil price is set in a market. For Shell, Exxon et al to hoard oil underground would be to leave billions of dollars of investment languishing unused."