Petroprices, journalism and life

[jredpath@iname.com]

Longtime residents have read--no doubt with some bemusement--the recent threads drum-beating against the Great Palouse Petroprice Conspiracy and taking journalists to task for failing to expose it. But it's time to set the record straight and bring a few historic and current truths to bear. 

Fundamental applied economics clearly reveals normal market forces at work with regard to gasoline prices in Moscow-Pullman and environs. There is nothing more insidious at work here than the simple laws of supply and demand. And yes, it does cost more to transport products to this area, removed as it is from major superhighway and rail arteries. The relatively few gas stations and the small, disperse population they service yield no economies of scale common in urban areas.

Accusations against the local press for neglecting to cover the issue are at best borne of ignorance. Fact is, the Daily News investigated it in the early nineties; the late Idahonian shortly prior to then. No evidence of conspiracy to fix prices was ever found. Fact is, petroleum prices are higher in the Northwest than most regions of the US. The suggestion, in this forum, that a few rounds of emailing caused the recent 10-odd-cents drop in pump prices is ludicrous. Fact is, petroprices worldwide dropped concurrently. Gasoline in the midwest has dipped as low as 69.9 cents per gallon. 

Is all this too much ado about very little? In adjusted dollars, the national mean price of gallon of gas today is at a historical low. As a percentage of household income it is even lower. The price differential between major brand gasoline in Moscow and Coeur d'Alene is about four cents. Insurance tables show the typical Moscow resident drives 10,600 miles a year. With even V-8 engines yielding up to 27 mpg, average fleet fuel economy of mixed city/highway has settled in at about 24 mpg or 441 gallons annually. Thus Moscownians who buy all their gas locally during a year pay $17.64 more annually than their neighbors to the north--less than a buck and a half a month.

Perhaps we do pay a premium for living out here on the Palouse, off the beaten path. But isn't that one of the primary "quality of life" reasons we are here in the first place? Those who value cheap gas and megamalls and suburban sprawl above life alongside Paradise Creek should move to CdA or Spokane or Seattle. Or Detroit. And pay higher property taxes to fund, among other things, larger police forces, more jails and myriad anticrime initiatives. 

I prefer to be thankful for all that the Palouse is, the life we enjoy here--including the $1.50/month "extra" gas tab.
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John Redpath MD
Health Potentials Development Center
Post Office Box 301
Troy, ID 83871
http://www.healthpotentials.com/index.htm
© 1999, HEALTH POTENTIALS, INC. All Rights Reserved
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