Yup, "market prices" that magic, uncontrollable, all powerful force, that
determines the price. Much of it is determined by a handful of oil companies
that run the world's oil supply. No one tells them to lower oil prices much
less tells them to raise the prices. They charge what they can get away
with. After all would we want their management to have to forgo their multi
million dollar bonuses for increasing the bottom line for this quarter!
Who, specifically is "gouging"? Something approaching 25% of the US
supply of refined petroleum products was lost for an indefinite period
and you expect the markets to not reflect that in an already tight world
The consumer (us) have a fari amount of influence on commodity prices.
My wife & I were going to drive ~700 miles ove the labor weekend but
decided not to go because of $3/gallon gas.
If more people did this gas (& oil prices) would fall.
Carpool only onje or two days a week, take the bus
Combine trips, forgo trips, etc
Small changes by all of us can make a big difference.
And guess what ?
If those handful of oil companies get together and say "hey arabs, we are
only going to pay you fifty cents a barrel from now on"
Guess what? The arabs would still keep the taps on, as they can't get rid of
the black goop fast enough.
Prices would drop to 1950's levels overnight.
Aw wait, it's couldn't be THAT SIMPLE could it ?
Don't confuse the price of a barrel of oil with the price at the pump.
The former is set on world markets. The latter is manipulated by
the supply chain. The price of a barrel goes up 10% and the price at
the pump goes up 25%. Look at the fraction of the pump price that
actually reflects the cost of oil and then realize the the other costs
are largely fixed in the short term and it's pretty obvious that the
pump price is theft. And as another poster pointed out - the oil in the
supply chain is already paid for - at lower prices.
Actually gasoline is also traded on the exchanges...
It tracks oil (obviously) in pretty close lock-step. At the pump prices
are affected by local and federal taxes, transportation, and regional
and local requirements for specific additives/mixtures for environmental
(mostly) purposes, and competition.
And those prices are either fixed in the short term or are a percentage
of the retail price (taxes). That proves nothing. It still remains
that the full retail price at the pump is manipulated independent of
the wholesale price of oil or gasoline.
Not totally independent if you'll simply look at the mercantile exchange
closing prices for the two commodities you'll find they're quite highly
And I said local prices are "affected by" not totally controlled by...
Ant that is still a positive correlation...it would be difficult to
conceive of them being totally independent as one is the raw material
for the other.
And, of course, I started this subthread branch by pointing out that
there are open markets for both products...
You're the one who seems to have changed the subject...I simply pointed
out (quite a bit earlier) that gasoline is a commodity traded on the
open mercantile markets which is where wholesale prices a pegged as
opposed to being unilateraly set by some specific entity. Retail prices
hence follow with various other factors and forces, some of which I have
I have no idea what you're onto now.
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.
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