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Capacity doesn't increase, but costs do decrease as the cost of raw materials drops. Now, obviously price is only partly determined by cost.
by sliverstorm 11y ago
Capacity doesn't increase, but costs do decrease as the cost of raw materials drops.
Now, obviously price is only partly determined by cost.
- pm90 11y agoThat's kinda the whole point. There is nothing for refineries to gain by reducing the price of gas because...nobody is going to sell gas at a lower price and take over the market because...the EPA does not allow one to build refineries. Free markets y'all.
- OniBait 11y agoSo much this. Price is driven by supply and demand. Not the cost of materials.
- brianwawok 11y agoBut price changes supply, no? Some oil is $1 a barrel to pump. It will always be worth pumping. Some oil is $50 a barrel to pump. It is only worth it when oil price is greater than $50 a barrel.
- guelo 11y agoFree markets don't account for negative externalities so they have to be regulated y'all. In any case, gasoline prices do move so there must be some market forces at work, but it's a mystery at least to me. I'd love to read an explanation.
- mtviewdave 11y ago>the EPA does not allow one to build refineries Two refineries have opened in the US this year: http://www.eia.gov/tools/faqs/faq.cfm?id=29&t=6 http://www.eia.gov/tools/faqs/faq.cfm?id=29&t=6
- mhuffman 11y agoThis is more of a lack of competition issue. A lot of gas suppliers have regional contractors that basically have a lock on entire regions and their prices. There is no incentive to reduce price. Also, since we can not export crude, but can export distillates, we can sell gas to other countries, increasing demand to some extent.