Breakout

Here’s How to Ease Gas Price Pain for Good

Jeff Macke
Breakout

For months consumers and the media have more or less been ignoring prices at the pump. But a 6% spike in July now has the media up in arms. Already there are calls for President Obama to consider tapping the Strategic Oil Reserve, and politicians are seeking to stamp out the mysterious "Evil Speculators" who seem to be behind every rise in crude.

Dan Dicker, former oil trader and president of MercBloc, says we should all be used to this by now. "Every year we do this," Dicker notes in the attached video. "We have a spike in gasoline prices; we have screaming from the Congressmen, and then again the prices go down into the fall and everyone forgets."

Theater of the absurd in D.C. is to be expected — and largely ignored. However, gas price volatility is a real problem. Companies can't predict their costs, consumers see their discretionary income whipsawed, and basic financial planning becomes all but impossible for commuters on a tight budget.

What's more concerning is that the howling over the peaks and valleys of prices at the pump drown out the fact that the prices have been moving higher every year since the bottom of the global recession. With more crude available, more refiners online, more efficient cars and decreasing average miles driven, gas prices should be falling instead of moving from $1.60 in early 2009 to the current average of just under $3.70.

Dicker's got a proposal that would smooth out the volatility curve and ease pain at the pump.

He suggests making gasoline prices subject to the same regulations as utilities. Rather than allowing globalized markets to dictate the prices that consumers pay, utilities are forced to pay.

Despite short-term electricity prices being wildly volatile, your utility bill isn't. That's because utility companies set rates in concert with local or regional agencies. The goal is relatively stable prices for consumers, while still allowing the utilities themselves to be financially viable.

Shockingly, this utility model generally works — at least when compared to the almost randomized fluctuations of gas prices.

Before free marketeers lose their collective minds over the concept of sticking the free market between producers and consumers, don't forget the "losers" in the Dicker plan are the same hedge funds, energy traders and speculators that the politicians are constantly railing at to no avail. The "winners" would be anyone who'd like more than a vague idea about what they're going to spend on gas from week to week. In other words, just about everyone.

More from Breakout:

Blame Ethanol for Spike in Gasoline Prices: Lutz

What the DELL? Voting Change Would Seal the Deal for Founder's Bid

Bet on a Zynga Rally: Najarian

Rates

View Comments (206)

Recommended for You

  • Meet the Enemy of Retirement Security: Procrastination

    Young people have the world's most powerful investing tool at their disposal. Image source: Sakeeb Sabakka via Fotopedia. Last year, I signed up for a program called "Connections" through my alma mater . The program is designed to bring

    Motley Fool
  • Want a Career Change in Education? Earn your M.Ed.

    A Master of Education degree can help you launch a new career as a school administrator, curriculum director and more. Why wait? Apply to GCU!

    AdChoicesGrand Canyon UniversitySponsored
  • When the Dealership Steals Back the Car They Just Sold You

    You bought a car and a couple days later the dealership comes by in the middle of the night and steals it back from you. JT went to a car dealer and found a late model used vehicle he liked. The salesman and the others involved in the deal kept coming and going from the desk where he was sitting,…

    Oppositelock from RSS
  • The Kawasaki Ninja H2 - Understanding the Hype

    Here's what we know for certain about the Kawasaki Ninja H2: it will be officially unveiled next month at the INTERMOT bike show in Cologne, Germany… that's about it.  Is the Ninja H2 the most-hyped motorcycle in recent memory? The answer is debatable - the cruiser world certainly heard the…

    RideApart.com
  • The point where you might want to buy Tesla

    This has been a great year for Tesla. For founder Elon Musk, that means his shares have lost over $1 billion in value since the start of this month. Musk’s 28.3 million Tesla shares mean he still has $7 billion worth of shares.

    Talking Numbers
  • Washington DC Could Light Up the Debate on Legalized Cannabis

    Whitefish, MT / September 23, 2014 / Washington DC voters appear overwhelming ready to legalize recreational cannabis, based on a recent poll sponsored by NBC4, Washington Post, and Marist. The poll found that 65% of respondents supported Ballot Initiative

    Accesswire
  • Play

    Cramer: Don't flip out on Alibaba

    CNBC's Jim Cramer shares his thoughts on Alibaba, Yahoo and tax inversions.

    CNBC Videos
  • My Wife Went Back to School for a Special Education Teaching Credential and We've Got Loads of Sallie Mae Debt Now

    Huffington Post Reader Question Dear Steve, My wife has $38k in new student loans for a Special Education Teaching Credential, the loan is through Sallie Mae. We make $160k/year in California with 8 children, total family of 10. We file Married Joi...

    The Huffington Post from RSS
  • Anyone With $40 Could Become A Millionaire

    1 simple Warren Buffett quote explains the key investing strategy that could create unimaginable long term wealth for you and your family.

    AdChoicesThe Motley FoolSponsored
  • 5 Mistakes Renters Make

    Whether you are new to the renting game or a renting lifer, you’ll want to avoid common and costly renter’s errors. A lease is the contract between renter and landlord that specifies the rights and responsibilities of each party involved in a property. Every rental property and experience is…

    Good Morning America
  • After big gains, stocks Cramer would avoid

    If you're looking at these stocks due to chatter of a super-cycle, Jim Cramer thinks you'll come to regret it. Because sand is such an important part of fracking , a relatively new drilling process that's made formerly hard to reach deposits of oil (New York Mercantile Exchange: @CL.1) and natural…

    CNBC
  • RadioShack may not have enough power to recharge its business

    Not long ago, RadioShack Corp. launched an effort called “Fix it Here,” an in-house service repairing mobile devices such as your smartphone or tablet. “That was the original mission for what RadioShack was, to do things like repairs,” said Stephen Baker, an analyst with the NPD Group.

    MarketWatch
  • The Debt That’s Robbing Seniors of Their Social Security

    The Senate failed to vote this week on a bill that would have allowed millions of Americans to refinance their student loans at today’s low rates. The amount of student debt held by Americans age 65 and older reached $18.2 billion last year, up from just $2.8 billion in 2005, according to a report…

    The Fiscal Times
  • Comcast to FCC: We already face enough competition, so let us buy TWC

    "Perhaps you should switch to another cable company… oh, that's right, we're the only one in town." Federal Communications Commission Chairman Tom Wheeler has made it clear he thinks there isn’t enough broadband competition in America, but Comcast is trying to convince the FCC that it faces enough…

    Ars Technica from RSS
  • Transocean Fleet Update: 2014 Out-of-Service Time Higher

    Offshore drilling giant, Transocean Ltd. (RIG), has provided a fleet status report for the period commencing Aug 21, 2014 to date. The value of all the new deals and extensions in contracts, during the aforesaid time frame, is estimated at roughly

    Zacks
  • Masters in Accounting or Forensic Accounting

    Study online in your spare time and graduate in less than two years. Accredited program from New England College School of Accounting.

    AdChoicesNew England CollegeSponsored
  • Russian assets firm on China data, newspaper report on sanctions

    MOSCOW, Sept 23 (Reuters) - Russian assets firmed on Tuesday, buoyed by positive economic data from China, a major market for Russia's raw materials, and by a report that the European Union might review sanctions imposed against Moscow over its role in

    Reuters
  • Play

    Yahoo After The Alibaba IPO — All Cashed Up And No Place To Go

    Flush with cash after the Alibaba IPO and boasting one of the largest digital audiences on the Internet, Yahoo is in a spot that most companies would love to find themselves. It is led by one of the most high-profile chief executives — former Google exec Marissa Mayer — and it is making inroads…

    Wochit
  • Chef Who Blamed Picky Customers for Shutter Says He's Tired of Trying to 'Satisfy Patrons'

    The San Francisco restaurant owner who blamed picky diners for the closure of his restaurant is defending his actions. The San Francisco chef that fired back at difficult customers last week with a very sassy sign is at it again. According to ABC7, James Chu — the owner and chef of SO Chinese…

    Eater
  • SHOE COMPANY: Our Ex-CEO Who Disappeared With All Our Money Called Us Over The Weekend, And Said He's Coming Back

    The missing CEO of show company Ultrasonic — who last week disappeared with the company's money   — says he's going to give it back. In a press release on Monday, Ultrasonic CFO Clifford Chan said  Qingyong Wu, the company's former CEO who was dismissed at a board meeting late last week, called him…

    Business Insider
  • Why Smart People Take Social Security Benefits Early

    Most self-described retirement experts will advise you to wait as long as possible before applying for Social Security benefits. The argument in favor of waiting goes something like this: By holding out until full retirement at age 66, if not longer, you increase the chances of maximizing your…

    The Motley Fool from RSS
  • Tesla Motors Inc Shares Continue To Fall

    Tesla Motors Inc (NASDAQ: TSLA) shares have come under heavy selling pressure again on Monday after the stock broke below the September 15 intraday low at $249.13. With the stock trading at $247.68 in the early afternoon on Monday, it looked increasingly like it will work its way down to the lower…

    Benzinga
  • Apply for a Master of Laws Degree Today!

    We offer LL.M. degrees for attorneys and J.S.M. degrees for business professionals. 100% online, 1 year completion, and 5 concentrations. Learn more!

    AdChoicesThomas Jefferson Law Sponsored
  • The Obamacare marketplace one year later: How you’re faring

    With the one-year anniversary of the federal health insurance marketplace nearing, the 8 million Americans who signed up for coverage in its inaugural year have a crucial decision to make: Will they keep their current plan, for better or for worse, or shop around for a new one? Open enrollment will…

    Yahoo Finance