Gasoline and the New Math
I just don’t get it. Over the past week the New York Harbour spot price for gasoline, the bench mark for pricing, has been in free fall. The closing price last night, August 4, 2011 was $2.73 per US gallon. That is down 44 cents from the previous week. That is about 14%. If you corellate that percentage drop to the price at the pump it means that the price at the pump should have also dropped an amount of 50 cents per gallon or about 12.5 cents per litre. Instead we get a drop of 1.3 cents. I just don’t get it.
Sure the age old argument of expensive gas being in the pipeline and that supply needing to be exhausted before the cheaper stuff comes through still exists. However, that goes both ways – or should. WE get the price increases passed on immediately, even though there is cheaper stuff is still in inventory. Why not in reverse?
This new math thing has me confused.
Until then, I remain,
A Sour Kraut