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9 Dollars a Gallon!?

I think it is safe to say that we all fear the day when we see gas prices climb over the five dollar mark. So far the United States has been able to stave off the looming threat of such outrageous prices. That doesn’t mean we all aren’t feeling the pain every time we have to fill up at 4 dollars and 30 cents, but let’s face it, it could be a lot worse. Gas prices in Europe are in the upwards of 8 dollars!

Recently, American drivers on the East Coast got a scare when they drove by numerous Lukoil stations in the tri-state area that touted prices of almost 9 dollars! How could this be? The US national average according to (fuelguagereport.aaa.com) is just over 4 dollars and 50 cents. It must be a sign of the impending apocalypse—there is no other possible explanation.

Before, you run down to Costco and start buying up crates of Twinkies, a lifetime supply of Charmin Ultra, flood lamps, and a CB radio…

As it turns out this was a protest by Lukoil franchise owners that have seen their profit margins plummet in past years. Lukoil North America has been selling gas at a higher than market rate to gas stations-- a cost that owners have had no choice but to pass on to drivers. The result has been a serious decline in sales. In the realm of pure competition, lower prices are the only thing that matters. It is too easy for a driver to take their car across the street and save themselves 10 to 15 cents per gallon. 1,500 gas stations participated in the protest, and because state law prevents changing gas prices more than once a day, it won’t be until tomorrow that prices will return to their normal rates.

Were the protests effective? Who knows? It’s too early to tell. It does seem a little counterproductive to protest rising gas prices and declining sales by setting your prices so high that no one in their right mind would actually purchase gas from you. I get it though-- owners are frustrated, and they needed a way to express themselves. As consumers we can only hope that oil companies will take notice and do their best to reduce costs where they see fit. Until then we will cross our fingers that prices don’t skyrocket overnight…and keep our eyes peeled for zombies.

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