Monday, September 19, 2005

Freezing gasoline in Russia?

Not the right time of year, nor the right temperature.

The freeze is on the price for gasoline, with several major Russian oil producers pledging to hold prices stable until the end of December.

Of course it's a bad idea. Price controls fail every time they are used, but they increase the power of the central government while the little guy is momentarily grateful. In a few weeks, or even days, the supply of fuel will dwindle because the Law of Supply & Demand cannot be trifled with.

But it might ease worldwide supplies which in turn might ease the perception of the markets which might translate into lower futures bids which directly translate, for some strange reason, into the price at the pump.

One Russian's pain might be one American SUV owner's mini-gain.



Post a Comment

<< Home