Katrina question

[keith]

Tell you what... I'll buy the gas in your car's tank for what you paid for it last week.

[Chuck]

In the southeast US (don't know if it applies elsewhere) The station owner usually don't own the fuel in the tanks.. the distributor does.. The station owner pays for the fuel after its been pumped out The distributor owns the pumps as well.. (this being at the independent stations anyway..)

[Michael Daly]

Nothing - you're the one that doesn't get it.

Here's a simple example from the service station up the road - prices in US dollars:

When the price of a barrel was about $60.00, the pump price was $0.75/liter. When the price of a barrel hit $70.85 last week, the pump price was $1.13/liter.

The wholesale price of a liter was 60.00/159 = $0.377/liter and more recently 70.85/159 = $0.446/liter

The cost excluding crude was 0.75-0.38 = $0.37 earlier and 1.13-0.45 = $0.68 recently.

The increase in crude price was $0.07 while the pump rise was $0.38.

Why should the costs that exclude the cost of crude - not set by any market - rise 84%? The tax portion remains a fixed percentage. The remaining costs of refining etc are largely fixed in the short term.

The extra $0.31 is partly taxes and mostly gouging by the oil industry.

Get over it.

Mike

[Duane Bozarth]

As I've pointed out, the two are RELATED, but not ABSOLUTELY fixed with respect to each other. Did you look at the relationship of the pump price to the market prices of gasoline or only crude?

A significant portion of the move in gasoline prices in the last couple of weeks was obviously the loss of production in the Gulf Coast region of the US.

As I've also noted over and over in these threads, there is sufficient shortage of supply and active demand that the markets are responding to speculation and rumor and fear of what might occur as much or more than as they are to real shortages.

It is also possible that there was a certain amount of "rigging" in the short term at the pumps of which you specifically speak.

The point I've been addressing all along is that the basic prices of commodities are set on the mercantile exchanges. Observing trends in these, one will find high correlation (which doesn't mean exactly matching) with retail prices.

I don't know why you have jumped on that with such vehemenence--I've never said and still don't say that there aren't local or other factors, simply pointed out the basics of where price levels are based for those who keep claiming absolute prices are set by the proverbial "they".

[Dave Jefford]

Is making money a sin? What is reasonable pricing, selling below cost and maybe you wanna it for free?

[William Brown]

mercantile exchange

quite highly

The flaw in your argument is your apparent belief that all gasoline is traded on the open market; that is simply untrue. The open market reflects sales of excess capacity, or by independent refiners (if you can find one). The bulk of US gas has its wholesale price established by the refiner, who controls the distribution and the marketing. A station that sells a name brand gas is contractually bound to buy from that manufacturer at the price set by that manufacturer, and does not enjoy the freedom to pick up some extra product on the spot market.

Price gouging is a meaningless emotional term used by name callers who are upset that they themselves lacked the foresight to buy something that would go up in price. Yes, the station owner makes more than he anticipated on his current inventory, just as he will lose money on the replacement inventory when prices decline. That is capitalism, and it has worked very well for the US.

[Liz]

Well that all depends on what the stock happens to be, doesn't it? Most stock doesn't turn over quite as fast as gasoline does these days so I can't see the comparison. On the other hand, I own a service business and do not deal in stock so perhaps my reasoning is skewed?

Liz

[Liz]

The gas in my car was purchased 3 weeks ago so no way I'm gonna do that!!!

Liz

[Thomas D. Horne, Electrician]

That being true you know that any business that sells it's stock for less than it will cost to replace that stock and cover their overhead will soon be out of business.

-- Tom Horne

"This alternating current stuff is just a fad. It is much too dangerous for general use." Thomas Alva Edison

[Michael Daly]

If we were talking about a couple of pennies, your latest diatribe would be reasonable. However, the price gouging goes _far_ beyond that.

Your posts on the market mechanisms have been grossly out of whack with what folks have been posting in many cases. Yes, the market for wholesale prices is open - the retail prices are not - not even close to reasonable. You have never made any such distinction.

Mike

[Dave Jefford]

Of course it is reasonable to charge as much as the market will bear! No one asking you to buy? If you can't afford it, take buses, walk or better yet eat less.

[Tom Miller]

mercantile exchange

they're quite highly

Now you're really backpedaling.

[Michael Daly]

Their cost goes 5% up and they charge us an extra 30% - you think that's reasonable? If they increased the cost by, say, 7% to cover uncertainty, no one would be complaining. But that's not what's happening.

Mike

[keith]

Ok, maybe now you'll understand the gas retailer's POV.

[keith]

It's *mostly* the same in the NE. Most small operators couldn't afford to replace the in-ground tanks and pumps after the EPA mandate. The distributors replaced the tanks and pumps and now pay the station operator to sell their gas. The station operators make most of their money from twinkies and coffee.

[nicksanspam]

I drive an '84 CRX that still gets about 40 mpg. Small. Light No airbags. An easy loser in an accident with an SUV. My choice. Could I get 100 mpg on short trips with a small motorcycle?

Nick

[Don Klipstein]

In article , Duane Bozarth wrote in part:

Oh, the oil companies sure appear to be enjoying the loss of capacity to refine crude into gasoline. Same as with that big blackout a couple years ago or whenever that was.

And now that their favored party has both houses of Congress and the White House, nothing has been done to address their complaint that "The Greenies" have instituted roadblocks to building new refineries. So the refinery count dwindles, and the oil companies get to blame "The Greenies" despite the party on the side of the oil companies being in power.

- Don Klipstein ( [e-mail])

[Don Klipstein]

Surely I believe the oil companies are gouging Americans!

But why? Americans did not decrease gasoline consumption in response to gasoline prices hitting $2.50 per gallon for regular. Annual national consumption was actually up from a year before then, almost to the extent of a year's population growth! So if the oil companies can have sales grow 1% if gasoline goes from $1.80 to $2.50 per gallon in a year, should they not see a profit motive to try for making gasoline cost more than $3 per gallon?

How much does gasoline have to cost before people decide to commute via Honda Civics or bicycles or mass transit or by foot rather than via SUVs, and drive a Honda Civic or a non-motor vehicle rather than an SUV to the supermarket? Americans beware - whatever most of you are willing to pay for gasoline to avoid such a fate has a fair chance of not being too much more than the lowest gasoline prices we will see in the future!

- Don Klipstein ( [e-mail])

[Edwin Pawlowski]

I'd take you seriously, but the same argument about the "Greenies" has been going on for years no matter what party was in office or controlled the houses of Congress. Please don't insult yourself by thinking that there are politicians of any party not in the pockets of big oil.

[John]

Some good points. My 750 gets about 45mpg highway. Note that bikes can cost significantly more to operate and maintain. Tires is a big part of the expense. Bike tires are relatively expensIVE.

jd

PS : My apologies for emailing you. Unfortunately I switched newsreaders recently and am having a little trouble.

JD