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I just read the June 16 article in the BDN from the Associated Press, telling us that prices won’t come down as quickly as we expect. One paragraph stood out to me, which prompted me to respond. “The tendency of gasoline prices to fall slowly is partly because the raw material takes weeks to work through the system until it’s delivered to consumers,” said Michael Lynch, a distinguished fellow at the nonpartisan Energy Policy Research Foundation.
Hmm. I’ve heard that line of reasoning for many years. I’ve never heard any line of reasoning on why prices at the retail end of the chain instantly go up at the mere whisper of a snag in the supply chain.
Some may remember in the first decade of this century, there was a refinery fire in Louisiana that produced No. 2 fuel oil and diesel. The price of No. 2 oil here in Maine shot up overnight, as I recall. Which was quite odd, considering that we get much of our No. 2 fuel from the Irving refinery in Saint John, New Brunswick, Canada, which has little to do with any oil refinery in Louisiana.
Far be it from me to question a “distinguished fellow” at the nonpartisan Energy Policy Research Foundation. Maybe it would be possible for someone so distinguished and recognized to explain why prices shouldn’t fall as rapidly as they rise?
Thomas Bonner
Holden