Great to See Free Markets Working

Talking about gas prices – next to the weather and politics – is a popular pastime. Last summer we got to vent about seemingly out of control, egregious price increases that seemed to have little to due with market influences.

Then crude oil prices began their dramatic slide from $147 to less than $50 a barrel in a matter of a few months. Gasoline prices followed but not a the rapid pace at which they had increased.

In some markets in this country, gas was at or near the $1.30 a gallon mark. Here in our area, $1.68 is the lowest I ever saw – and just for a day.

Then they started creeping back up. A few weeks ago, there was a modest increase in oil prices and gasoline shot up $.10 overnight in our area. This put almost all of the stations back in the $2.00 a gallon strata.

Well, the past couple of days, I am pleased to see that gas has backed off from its $2.05-2.09 level to the $1.90s at many stations.

If free markets really work, consumers can tolerate a temporary rise in prices because they know that competition, efficiency, and adjustments to supply will cause lower prices again. It's when price go up – and stay up – for inexplicable reasons that we have issues.

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