Greg Mankiw has a Post "Salinger on Price Gouging" which should be read before recourse to my maligning (or is that malignant) statements. The Oil industry has an amazing history, most noted for supplying any volume of fuel demanded, at any Price existent at any time, while finding no losses or Price Gouging at any time; a simply amazing feat considering the Price of Gasoline has varied in my lifetime from $.179 per gallon to $3.269 per gallon. Volume has been known to vary as well, though generally upward, but Volume supplied nevertheless, whether the price was less than a Dollar, or more than $3 per gallon.
Here is the Rub:
If the Oil industry is able to produce a given volume of Gasoline at $3/gallon, and can provide an equivalent volume of Gasoline at $1/gallon; how does the Oil industry expense increase so rapidly as to eliminate Price Gouging as the Price of Gas advances to $3/gallon? Are the Gas Companies truly hiding their losses when the Price of Gasoline is Low, to keep Consumers and Stockholders from fright? Maybe Oil Companies are all Share Cooperatives, whose Employees wait until Product Price is high enough to draw Wages. Maybe it is simply that Company Executives await high Prices to draw their Pay Packages?
It could be, of course, that the Oil industry may utilize Creative Accounting, whose entire Job is to hide Profits whereever and however possible. This is said in Good Spirit, not attempt at dafamation of character, or suggestion of Tax Fraud. It must be reinterated that these Good Citizens, a group who trained and honed our current illustrous President, could not be engaged in ethical malfesiance--so help me, Cheney. lgl