Oil Prices Render Some Pumps Obsolete, But Who Cares?

Posted at 1:08 pm on Sunday, May 18, 2008, in Uncategorized, and tagged energy.

This is a silly little news story I saved this past week (using Instapaper) but had never found the time to blog it. Ah, lazy Sundays…

The list of unintended victims from the recent spike of gas prices, better described as the most recent successful strategy from oil companies to make massive amounts of profit, includes older gas pumps, which cannot register prices greater than $4 per gallon, without the installation of a relatively-expensive kit.

What confuses me, however, is that these pump owners, while complaining about the unreasonable cost to retrofit their out-dated machines, did the same thing a few years ago when prices rose above the $3 per gallon threshold… “The last time that happened was in late 2005, when gas went over $3 a gallon, and owners of the older pumps installed kits that went to $3.999.”

Why didn’t these station owners have the foresight to install kits that went greater than $4 at that time? Did they really believe that inflation was going to stop, or that either the demand for gas was going to decrease or the supply of oil was going to suddenly surge? This seems like a poor business decision (in hindsight, of course).

My second thought on this, moreover, is that this reminds me of one of the defenses for maintaining the current status of U.S. currency, i.e., keeping the penny in circulation, keeping the dime and nickel the same size and weight (read: same costly material), keeping a paper dollar bill, etc., because that is what works with the current crop of vending machines. That the U.S. should not modernize or optimize its currency production because of all the Coke and candy-bar vending machines in office complexes is absurd, yet it continues to convince U.S. legislators to resist change on the subject. Just how powerful is the U.S. vending machine lobby anyway?

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