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View Full Version : Memorial day must be coming....



Jeff Monson
05-16-2013, 2:36 PM
Unleaded went from $3.79 this morning to $4.09 in a matter of minutes. 30 cents is quite a hike, cant tell me the gas stations aren't smiling for a couple days.

Harley Reasons
05-16-2013, 2:50 PM
Dang, and I thought the jump from $3.15 to $3.24 was bad.:eek:

David Weaver
05-16-2013, 3:23 PM
Must be coming from the west like the weather, as it hasn't gotten here yet. You guys get a lot of tourists in ND, like campers and such?

When I lived in gettysburg, it seemed like the prices fluctuated to nail the tourists. 10 miles away, gas was always 10 or 15 cents cheaper despite real estate costs being the same.

One of my favorite sayings for the thinly veiled ripoff games is "the customer is always ripe".

Harley Reasons
05-16-2013, 4:13 PM
That's why I LOVE the Gas Buddy app on my phone, you can shop for the cheapest fuel for miles down the road or in your home town.

Brian Elfert
05-16-2013, 6:51 PM
Apparently two refineries in the Chicago region are shut down for upgrades and causing gas prices to skyrocket. They are both upgrading to be able to handle the heavy crude out of Canada. You don't think maybe the refineries colluded to both do this at the same time to drive up prices do you?

This sucks. I'm going to have to figure out how to cut my driving to stay within my fuel budget. I've averaged between 900 and 1000 miles a month over the past year. My budget will allow for about 800 miles a month at current prices and I drive 500 to 550 miles a month for work. Fuel was $3.75 just a few weeks ago and I could drive over a 100 miles a month more on the same fuel budget.

Dick Latshaw
05-16-2013, 11:03 PM
They are both upgrading to be able to handle the heavy crude out of Canada. You don't think maybe the refineries colluded to both do this at the same time to drive up prices do you?

C'mon Brian. The oil companies are our friends. They are creating all kinds of jobs. Haven't you seen the TV commercials? :mad:

Tom Fischer
05-17-2013, 1:00 AM
More likely the EPA ordered the scheduling.
We have two electric utilities near here (eastern PA) shutting down next year.
They couldn't afford the new EPA emission mandates.
Electric will be going up as well as gasoline.

Rick Potter
05-17-2013, 3:00 AM
For years we have a local refinery or two shut down around this time of year for repairs or maintenance. I am sure it is coincidental. Price took a big jump here a couple days ago.

It's my understanding that no new refineries have been built around here in over forty years, either. We used to have a gas station on every busy corner, most have been replaced by banks.

Rick Potter

John Pratt
05-17-2013, 10:15 AM
I filled up on the 10th of May at $3.37, yesterday the station I get gas at jumped to $3.85. Memorial Day travelers, graduation season travelers, schools-out vacation time, etc. What I find amusing is that it is illegal for gas stations to collude to set prices, and yet all the stations change their prices at the same time of the week and even at the same time of the day most times.

David Weaver
05-17-2013, 10:48 AM
Weather still didn't blow in here. $3.55 monday, and still $3.55 today. I ride the bus, though. But I do pick up the bus next to a gas station.

Harley Reasons
05-17-2013, 10:56 AM
I filled up on the 10th of May at $3.37, yesterday the station I get gas at jumped to $3.85. Memorial Day travelers, graduation season travelers, schools-out vacation time, etc. What I find amusing is that it is illegal for gas stations to collude to set prices, and yet all the stations change their prices at the same time of the week and even at the same time of the day most times.
Now all stations are connected via Gas Buddy app on a smartphone. One goes up, all go up, one goes down, well, we'll get around to dropping prices after our next tanker load. Gouge, Gouge, Gouge, don't worry the suckers will pay whether they want to or not.

Jeff Monson
05-17-2013, 11:05 AM
Apparently two refineries in the Chicago region are shut down for upgrades and causing gas prices to skyrocket. They are both upgrading to be able to handle the heavy crude out of Canada. You don't think maybe the refineries colluded to both do this at the same time to drive up prices do you?



That is what I have heard also. It really makes me mad that they cannot schedule "maintenance" independently of each other, secondly why cant they do this on the part of the season where the demand is the least? Makes absolutely no sense to me. The fuel stations working as a "team" also gets under my skin, how can they all raise the price at the same time? Can you tell me they all fill their holding tanks a the same time? I know that their cost is going to go up as these refineries are shut down, but why do they have to gouge people on the fuel that they already have on hand? I'd bet with the hike they took yesterday that some are profiting over .50 cents a gallon.

David Weaver
05-17-2013, 11:19 AM
Unless they were regulated to do maintenance at a specific time, I'm sure they are well aware that the industry as a whole can harvest more if they schedule maintenance strategically.

Jeff Monson
05-17-2013, 12:20 PM
Unless they were regulated to do maintenance at a specific time, I'm sure they are well aware that the industry as a whole can harvest more if they schedule maintenance strategically.

You are most likely right David, the industry defiantly needs to harvest more, we know times are tough in the oil business :mad:

David Weaver
05-17-2013, 12:49 PM
Well, they do have a duty to their shareholders, just like every other public company. I'm sure most of us have oil stocks in our portfolios. They have generally been good to us, stock-wise, when a lot of other stocks weren't. All of the money goes somewhere. Once you're forced to hand them over, you just have to figure out where and then try to get it back.

I do think that we are in an era where the oil companies do have to work pretty hard to actually get the oil, and a lot of what we're getting out of the ground is energy and labor intensive and we're going to end up paying for that. Being from the marcellus region, I'd love to toot the horn for natural gas, but progress in figuring out how to get that in passenger cars seems to be pretty slow.

Brian Elfert
05-17-2013, 12:51 PM
That is what I have heard also. It really makes me mad that they cannot schedule "maintenance" independently of each other, secondly why cant they do this on the part of the season where the demand is the least? Makes absolutely no sense to me. The fuel stations working as a "team" also gets under my skin, how can they all raise the price at the same time? Can you tell me they all fill their holding tanks a the same time? I know that their cost is going to go up as these refineries are shut down, but why do they have to gouge people on the fuel that they already have on hand? I'd bet with the hike they took yesterday that some are profiting over .50 cents a gallon.

Think about it, if you ran a business would you not raise your price if the guy down the street selling the exact same item raised his price? Demand for gas is fairly inelastic over short time spans and you're still going to sell roughly the same amount regardless of the price in the short term.

Yes, gas stations make money when they raise prices before their next load arrives, but they also lose money when prices fall and they are still selling that last load of high priced gas. The margins for selling gas are very slim. Gas stations typically make money by having service bays, or food/drink, or both. I've seen gas stations recently with signs saying you get 5 cents off per gallon if you pay inside cash or credit. They want you inside to be tempted by all the profitable goodies.

Brian Elfert
05-17-2013, 1:04 PM
One of the issues with drilling for oil is the cost of actually get the oil out of the ground and to the end user is skyrocketing. It now takes 1 barrel equivalent of energy to extract 3 barrels of oil. Way back when oil extraction first started they could extract 100 barrels of oil for one barrel of energy. Experts predict we could soon be at a 1 to 1 ratio. If oil prices were to plunge again a lot of drilling would cease as it costs more than what they could sell the oil for.

Oil extraction does seem to be a manpower and energy intensive activity. There is a TV series on Discovery right now where guys are using relatively inexpensive rigs to drill for oil in just one to three days with only a few guys. No huge productions like where they have 100 guys drilling a well and stuff spreading out over an acre or two.

Jeff Monson
05-17-2013, 1:49 PM
Think about it, if you ran a business would you not raise your price if the guy down the street selling the exact same item raised his price? Demand for gas is fairly inelastic over short time spans and you're still going to sell roughly the same amount regardless of the price in the short term.



No I cant say that I would, but I don't own a gas station. My business relies on return customers and not what the guy down the street charges. A gas station might not run on this principal, or have to for that matter.

Brian Elfert
05-17-2013, 3:41 PM
No I cant say that I would, but I don't own a gas station. My business relies on return customers and not what the guy down the street charges. A gas station might not run on this principal, or have to for that matter.

Gas stations sell an item that consumers buy essentially the same quantity of week in and week out regardless of price. Drivers tend to do a lot of driving that they can't cut back on. Over a time span of months and years gasoline demand is going down, but from week to week demand does not tend to change much.

Mark Bolton
05-17-2013, 4:08 PM
The only bonus is its summer, and the fact that they are not fouling the ethanol blend around here my mileage has gone from 18.9 up to 21. I drive like an old lady (not ashamed to admit) which really helps mileage but that winter zap sucks.

Rick Moyer
05-18-2013, 8:00 AM
Brian has it right. The retail gas sellers aren't making much on gasoline sales. Look how many went out of business when the underground storage tank regulations went into effect 15-20 years ago. There wasn't enough profit margin for the updates required to ever get the return. That's why you mainly see gas sold at grocery chains and large convenient store chains. They make there profit on inside sales, not on gasoline. Also, the reason for everyone changing price about the same time is that they CAN'T sell gasoline at .05 or .10 more than the retailer down the street, nobody would stop. And if you were losing all your customers to a nearby competitor you'd adjust your price quickly too. It works the same way for increases. Typically the retailers absorbs the daily fluctuations in their gasoline costs until the market dictates an increase. It's not collusion so much as market demand.

John Bullock
05-18-2013, 1:38 PM
It is interesting to note that on the whole, America has some of the lowest gas prices in the world. This is particularly significant when you consider that the oil companies via the consumer is paying a tax rate of almost 70% on every gallon of gas purchased. Maybe the real villain here is a government structure that is way out of control. Where else but our government do you find employees retiring at age 55 with lifetime healthcare insurance and generous cost of living adjustments. This is in addition to the fact that government usual provides salaries that are competitive with or higher than the salaries paid in private industry!

Brian Elfert
05-19-2013, 1:29 PM
Gas prices need to be compared country to country on a pretax basis. I read a while back that our wholesale prices on gasoline are actually more expensive than Europe on the wholesale level. Europe has tiny cars for the most part and they have had high gas prices for so long they have adjusted to it. Europe also has higher population densities and much better public transit for the most part. The city of London doesn't even let cars into the downtown area during the week without a steep fee. Many of the European taxes on fuel are government attempts to curtail fuel use to reduce pollution. The political environment in the USA would never go for high gasoline taxes just to curtail use of gas.

Where I live mass transit is just not convenient. I can spend 45 minutes to an hour on a bus, or drive in 20 to 30 minutes. There is a park and ride I can go to, but if I have to drive nearly half way why would I switch to a bus instead of just driving the last half? It isn't good on a car to not get fully warmed up, particularly in winter. The thing that would get me to switch if the cost of parking. Right now I pay $45 a month pretax for parking. My employer is in downtown Minneapolis with our own surface parking. My employer will be moving in about 18 months and we will most likely move closer to the core of downtown where parking is very expensive. At minimum the cost will double and probably triple. My employer may rent a block of parking space and deduct the cost pretax, but the cost will go up no matter what.

Ken Fitzgerald
05-19-2013, 2:53 PM
A friendly reminder. Political discussions violate the Terms Of Service at SawMillCreek.

David Weaver
05-20-2013, 12:14 PM
Slow moving weather system (talking about the gas prices). Walked to the bus this morning, and gas was down two cents vs. where it's been the last couple of weeks. I guess there's not enough memorial day tourism activity around here.

Curt Harms
05-21-2013, 8:00 AM
At one time gas prices varied by zip code. Areas with higher per capita incomes had higher gas prices than areas with lower per capita incomes. I see that here, a town with lots of lawyers and other professionals has gas prices 5 to 10 cents higher than an area a few miles away. Gas prices have risen here from a low around $3.35 to $3.48 or so now. The spot market has risen that much or more so I don't see gouging here. The economy seeming to be in the doldrums in this area may have something to do with it.

Brian Elfert
05-21-2013, 8:25 AM
Minnesota now has the highest average gas prices in the entire continental US. It seems pretty silly that two refinery closures 500 miles away would cause our prices to go through the roof while states closer to the closed refineries are not experiencing the same price hikes. We have two refineries right here in the Minneapolis area. Gas prices in Chicago are just one cent lower than Minneapolis, but Milwaukee prices are over 30 cents lower than Minneapolis. Chicago is usually highest in the Midwest by a long shot.

David Weaver
05-21-2013, 8:29 AM
Curt, I don't know if our formulation here in W PA is the same as yours out there, but gas prices vary around here by as much as 20 cents, too. Not necessarily by the wealth of the area, but I think more with the convenience of the stations, their location and their competition, and for some reason, the direction from the city.

The station that I stand next to when I catch the bus is an expensive station, but most in my area are, because they are on main roads or connections between main roads and they never have trouble getting people to patronize them.

Whatever is going on, we're 16 cents below the national average here this morning, and that is almost unheard of (we're usually around it or a few cents higher), so there must be a fair bit of territory to the west that's seeing the price jump.

Jeff Monson
05-21-2013, 8:47 AM
It appears the price is stabilizing here, we are at $4.29. It has not changed for a few days now, so hopefully it will start to decline.

Lee Schierer
05-21-2013, 5:04 PM
We just completed a 1500 mile trip through Ohio, Indiana, Illinois, Missouri, Oklahoma, Texas, Louisiana, Mississippi, Tennessee, Kentucky and Pennsylvania. We found gas prices from $3.19 up to $3.85 all within a week. Louisiana and Mississippi had the lowest price gas, Indiana and Ohio had the highest prices. Surprisingly, PA was in the lower range at $3.35. Gas buddy helped us find the better prices, which could vary 20 cents per gallon within 20 miles.

Ken Fitzgerald
05-21-2013, 5:15 PM
Lee,

We were returning from driving trip from Idaho, to Illinos to Denver and back to north Idaho. We stopped for gas IIRC in Rawlings, WY. The price was outrageous compared to what we had been paying. We got back on I-80 and 3 miles down the road....the other exit in Rawlings...same town...different exit....the price on the sign was 16 cents cheaper.....Talk about gritting your teeth! LOL!

David Weaver
05-21-2013, 5:21 PM
Ken, you can always make the joke that I make with my wife after we overpay for something...

..."well, I guess we won't worry about it. If we go broke, we'll just sell some of my tools".

Makes my wife twice as mad.

Rick Potter
05-21-2013, 6:09 PM
I always try to get mine at Costco. It's usually as cheap as anywhere, and I get an additional 3% off for using the Costco AMEX. At $4 per gallon, that's 12 cents off what was already a good price. That being said, I still miss the old neighborhood gas stations, they are all long gone around here, just mega stations with a dozen or more pay at the pumps. Been that way for years.

Rick Potter

Rick Moyer
05-21-2013, 9:39 PM
I contemplated typing this but here goes anyway: It always amazes me how much the American public is concerned with gasoline prices compared to other things we all spend money on. If you drive 12000 mile per year and get 20 mpg on your vehicle you buy about 600 gals. per year. If the price varies 10 cents/gal. you save or gain $60 for the year either way. That's pretty insignificant, especially if you A. Smoke a pack a day ($2000/yr.), B. Drink moderately ($6/drink X 5/wk X 50 = $1500), or, God forbid, buy woodworking tools!

Ken Fitzgerald
05-21-2013, 10:16 PM
Rick,

4 years ago, my wife and I were gifted with a 10 day trip to New Zealand. 13 years ago I met a co-worker, a native Kiwi, in a corporate class. He and I became instant best friends. When we arrived at the Christchurch airport 4 years ago, a limo driver met us with a sign and our name on it. My friend met us too. Later that evening my friend took us on a personal tour of Christchurch. As we passed a gas station, my wife commented "That is about the same price we pay in Idaho." to which my buddy asked "Are they selling by the liter in the US now too?" My wife said "Oh!!!!".

The US has had and still has some of the lowest prices of gasoline available.

BTW...My father died on the floor of an oil rig in 1972. He was a driller. When I was age 14, he pulled me out of bed the first time to rough neck for him when a hand showed up drunk. At age 15 I was working full time for him morning tour (11pm-7am) and going to high school days. My younger brother was treated to the same experience. On Christmas Eve 1966 after working in the freezing rain all night on the floor of an oil rig near Newton, IL, I told myself there had to be a better way to make a living. I found one. The recent TV show on the Discovery Channel? It's NOT reality TV. My brother worked and eventually became a driller. He left in his 30s and got an engineering degree. His role in the oil field has changed today but he is still involved. I am proudly former oil field trash. It's changed since the 60's . These days they actually get days off. In the 60's the only way to get a day off and keep your job was to get someone to work in your place.

Brian Elfert
05-21-2013, 11:23 PM
I contemplated typing this but here goes anyway: It always amazes me how much the American public is concerned with gasoline prices compared to other things we all spend money on. If you drive 12000 mile per year and get 20 mpg on your vehicle you buy about 600 gals. per year. If the price varies 10 cents/gal. you save or gain $60 for the year either way. That's pretty insignificant, especially if you A. Smoke a pack a day ($2000/yr.), B. Drink moderately ($6/drink X 5/wk X 50 = $1500), or, God forbid, buy woodworking tools!

It isn't 10 cents per gallon people are complaining about here. Prices in Minnesota jumped between 40 and 50 cents in two to three days. Gasoline prices are one of the only things everyone buys that the price is advertised everywhere so people easily see when the price changes. Grocery prices have gone up a lot too, but the prices of groceries aren't advertised on big signs on the outside of the grocery store. I'm one of those folks who gets 20 MPG and drives about 1000 miles a month. That extra $30 I will spend on gas in a month means $30 I won't spend on dinner out or some other discretionary expense.

Gas prices have gone through the roof in the last five years. Prices did drop a lot in 2008 for a while after prices hit records. I bought a car with a 12 gallon tank in late November 2008. My first fill-up was right about $18. That was the last time I could fill the tank of my car for under $20. My fill-up this weekend with almost 1/2 tank remaining cost me $49!

Brian Elfert
05-21-2013, 11:26 PM
We were returning from driving trip from Idaho, to Illinos to Denver and back to north Idaho. We stopped for gas IIRC in Rawlings, WY. The price was outrageous compared to what we had been paying. We got back on I-80 and 3 miles down the road....the other exit in Rawlings...same town...different exit....the price on the sign was 16 cents cheaper.....Talk about gritting your teeth! LOL!

I've seen this in other places along I-80 too. The gas stations at the first exit have high prices because they know travelers are looking for the first gas station because they need gas. I remember in 2002 stopping for gas along I-80 and it was at the then outrageous price of $1.70 a gallon. The next exit gas was around $1.40.