Sunday, June 1, 2008 | 2:05 a.m.
A lot of people say the price of gasoline is tied to the supply-and-demand theory on the pricing of a product.
I submit that the final price also includes the cost of exploration, manufacturing, delivery, storage, advertising, taxes and salaries. So the cost of a gallon of gasoline is not related only to the demand.
The real bottom line is greed for the dollar! A simple example is, if everybody stopped buying gasoline except two people, what would a gallon cost each of them?
The cost of a gallon of gasoline would be astronomical; it would depend on how much the shareholders wanted in return for their investment and, for example, the salary of the chief executive of Exxon Mobil.
His salary was $22 million in 2007, and is sure to go higher with the profits of 2008. And Exxon still has to cover one of the most generous retirement packages in history, nearly $400 million given to its previous chief executive in 2006.
That kind of explains why the utility and water rates increase the more we conserve. Don’t be buffaloed by the supply-and-demand theory when greed is the real culprit!
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