It's all about "comfort level" and what the oil tycoons "want" the price to be over time.
The oil companies will slowly jack prices up until people complain.. Past the "target" price they want. Then they will make a huge spike so that it's in the newspapers, etc..
After that they drop the price down to a lower level, but still higher than what it was. Then they slowly creep it up to their target and make it hover around that price.
Public opinion goes like so..
0) Sweet, $1.73...
1) Wow, gas it getting expensive.. $2.00/gal
2) Ok, this is getting even more expensive.. This sucks.. $2.75/gal
3) Holy ****, on the news gas hit $3.00/gal!! the gov't has to do something..
4) WTFBBQ!! $3.10/gal!!!!
5) Wow, cool gas is "only" $2.75/gal this is sweet..
6) Yeah, gas may be $2.95/gal, but at least it isn't $3.10 anymore!!
So, now the "base price" is around $2.95 for our area.. That's where they start at for the next hike..
Sad really.. $2.95 is the old $1.73..
Thanks!!
Riley