Reality has vanquished a fundamental myth about US gasoline prices—and the myths behind it.
The myth: Gasoline prices rise before every summertime holiday.
The myth behind the myth: Industry scoundrels raise the price of gasoline before long holiday weekends during which driving typically surges.
The myth behind the myth behind the myth: Anyone, scoundrel or otherwise, “sets prices” in the sense of forcing onto consumers prices unsupportable by the market.
Labor Day, the traditional end of the US summer driving season, was Sept. 6. Mythology says gasoline prices should have risen just before that date.
They didn’t. According to Energy Information Administration data on all grades of all formulations of gasoline, retail prices on the week that ended on Labor Day averaged 273.5¢/gal.
Here are the data for the four prior weeks, backward in time from the week that ended Aug. 30: 273.6¢/gal, 275.9¢/gal, 279.8¢/gal, and 283.5¢/gal.
In the weeks leading up to Labor Day, US gasoline prices were declining.
The pattern was more ambiguous before the middle summer holiday: Independence Day on July 4. In the holiday week, gasoline prices, at 277.9¢/gal, were 0.1¢/gal below their level of five weeks earlier. In intervening weeks, they fell slightly, then rose slightly, then fell again.
No price run-up there.
The driving season began with Memorial Day, May 31, during the week of which gasoline prices averaged 278.4¢/gal. Five weeks earlier they had been 295.0¢/gal and fell every week in between except one.
Contrary to the fundamental myth, gasoline prices do not always rise before holidays.
And contrary to the underlying myths, no one “sets” the price because no one can. Individual sellers make price decisions, of course. But there are too many of them, in too many places, to allow for the sinister collaboration of widespread belief. And they all have to accommodate market pressures, local, regional, and global.
The myths about gasoline prices are all wrong. Tell your friends.
(Online Sept. 10, 2010; author’s e-mail: email@example.com)