Going into the summer months as usual the price of gas will rise. A little more around the the holdiday but it goes up every year. Until the true market begins to force the markets back into equalibrum.
Very often the argument from corporate fundamentalists is that the oil companies are just working under the invisible hand of the market. That the oil companies hands are tied when it comes to setting the price of gasoline.
But if your going to use that argument you have to also take into account the other side of the coin.
The relationship of corporate management to the shareholders. Management serves and is rewarded at the pleasure of the shareholders and the pleasure of the shareholders is to maximize profits.
It's build into the system that a corporation is a mechine with the sole purpose of maximizing profits. Management will become obsessed with profits and balance sheets and as we see in many of the recent acounting scandals many of these managers also will be operating on almost primitive levels of greed and narcisism.
So would the heads of the major oil companies use their power as an oligopoly to maipulate price when a period of increased demand comes along? It would be what just comes natural.
