Gas prices

[Kirk (KC) Constable]

I noticed on my way to work last night that gasoline prices had gone up 14 cents per gallon since the morning. Every single station I passed. I seem to remember hearing on the radio that the new all-time high was $62 bbl for oil. I also remember back when the big news was it was going over $50. The way I figure it, $62 is something around 20% higher than $50...so if the price of crude were to go down TOMORROW to $50, it stands to reason that we'd see a 40 cent per gallon decrease OVERNIGHT. Right? Riiiiggght. :mad:

It also occurs to me the increase seems steadily tied to the price of crude oil...but the cost of oil should only be a piece of the price. Labor, machinery. refining, etc. etc. shouldn't be going up. Does this help to explain the record profits?

Am I all wet?

[John Hart]

Another thing I've noticed KC, is that the price of oil spikes up and down. When it spikes up...so do the gas prices. When it spikes down, the gas prices linger up high a while then fall ever so slowly. But we're not supposed to notice that! shhhhhhh.

[Jason Roehl]

KC...you and I think very much alike, but the price of crude isn't the only variable in gasoline costs. Demand for gasoline itself also affects the price, which is why there isn't a linear relationship in price between a barrel of crude and a gallon of gas. It was just a couple years ago that $30/barrel crude was considered very expensive, and when we hit that, gas prices soared to $1.70/gal or so. Now we're at $60/barrel and $2.25/gal. The biggest problem in the U.S. is lack of new refinery capacity. We're at the max now pretty much, and no new ones have been built in 30 years.

[Jerry Clark]

Yesterday a TV station showed a ARCO gas station in the San Francisco area that had gas listed-- regular-- $3.43 and mid gas at $6.15 and premium at $6.15. They also reported he had a dispute with ARCO. :mad:

Maybe they are preparing us for the higher prices that will soon be here! China wants to increase their oil imports several 100% in the next few years and have recently offer to buy a big oil company here in the US. Gas prices will surely be a premium in the next years and $3 may be a bargin!:rolleyes:

[Mike Ramsey]

Sunday I paid 1.83 at the local Wal-mart, Monday it was 2.04, Tuesday it was 1.93, Wed it was 2.09, Thur it was 1.96...2 weeks ago while i was in Tn the gas prices changed 3 times in 1 day at the local Wal-mart there. In Rockport TX about 60 miles from me the gas prices are usually 20 to 40 cents a gal cheaper! No rhyme or reason for this!!! My MIL in Calif says she is paying 3.69 a gal :eek: .

[Mark Riegsecker]

The govt always wants to stick its nose in everything but this, I guess getting gouged by big oil with their profits at record levels is OK. I'm a free trader but where's the competition? A new gas station opened a few weeks ago selling gas under $2 some followed but that didn't last long, now it's selling around town for about $2.30

I can live with it I don't travel much. But it affects everything around us. We'll be seeing the affects of this in a myriad of ways. Inflation, lose of jobs and people on fixed income will want financial help from the govt because they won't be able to keep up.

I'm not really into politics but this is going to lead to lowering our standard of living. Until then we're all in the futures market whether we want to be or not.

[Frank Hagan]

I guess they get about 46 gallons of gas from a barrel of "sweet light crude", so the raw material cost of the gasoline at $62 a barrel is about $1.35.

Refineries are making the most money right now, mainly because there's a shortage of them. They are pretty dirty, so no community really wants a new refinery in town. The more demand there is for them to process that "sweet light crude" the higher their "costs" will go up. Its amazing how cheap things get when there is a lot of competition.

The good news is that at $62 a barrel, its closer to break-even for extracting the oil from oil shale and oil sands in Colorado, Montana and up in Canada. The reserves from those sources are estimated at higher than the oil in the Arabian pennisula, but it is more expensive to extract. I'm thinking we could build a nuke plant up there to provide the heat to extract the oil ... :o :o

[Norman Hitt]

I'm thinking we could build a nuke plant up there to provide the heat to extract the oil ... :o :o

Yeah, but then they would want to send their Nuclear Waste to "Store" it in W. Tx, like every other state wants to, and if any of it ever leaks, it will contaminate our ground water from the Storeage locations in W. Tx, all the way to the Gulf Coast due to the areas geological features. It seems every State wants Big Business there to generate all kinds of Revenue for them, but then they want to send the Garbage to Tx. I personally would like to see laws passed that basically say, "If you want to create Nuclear Waste or other Undesirable Garbage in your state, then you better have some place locally to dispose of it. I guess I'm just tired of all the Big Bucks going to some other state and WE Get the Garbage.

I'm definitely Not a "GreenPeacer", and for many years, I truly thought Nuke Power was the real Future, but from the knowledge and experience I've gained over the years related to Nuclear Devices, their construction, and operating considerations, I'm at a point now that I personally hope they Never build another Reactor "Anywhere" in the world, much less the good ole U.S. of A.

OK, I'm off my soapbox. :D

[Rob Russell]

It's not just gas prices. The prebuy price for home heating oil at our dealer is $2.35. That's if I pay now. The fixed price is $2.55.

There are a lot of senior citizens on fixed incomes that are going to be badly hurt by these heating prices.

[Lee DeRaud]

My MIL in Calif says she is paying 3.69 a gal :eek: .I'll take your word for that, but the going rate around where I am is $2.50 or so for regular. My car takes premium: $2.72 this morning, maybe a nickel more than last week's tank.

[Mike Ramsey]

Mil lives in Hemet if that make a difference.
you are lucky you don't live in the SF area i guess..

(quote) Yesterday a TV station showed a ARCO gas station in the San Francisco area that had gas listed-- regular-- $3.43 and mid gas at $6.15 and premium at $6.15. They also reported he had a dispute with ARCO. :mad:




I'll take your word for that, but the going rate around where I am is $2.50 or so for regular. My car takes premium: $2.72 this morning, maybe a nickel more than last week's tank.

[Chris Padilla]

The US got fat and happy with low gas prices. I hope to see more fuel-efficient vehicles coming our way now along with alternative energy sources seeing some research money. The oil isn't going to last forever, folks, and efficiency is needed. If you don't want an efficient vehicle, expect to pay through the nose at every fill-up! I just picked up a new BMW with a V-8 in it...fun, fun car but I'm not crazy about the gas mileage hit compared to my I-6 BMW so I'm thinking to dump it...at least I leased this one just in case....

[Don Baer]

I hope to see more fuel-efficient vehicles coming our way ....

Thats why when I bought my new Silverado I didn't get the realy big V-8

:p

[Lee DeRaud]

Mil lives in Hemet if that make a difference.I'd expect the prices in remote areas to be somewhat higher, but not that much. And "remote" is stretching it a bit for Hemet: it's only 8-10 miles from I15. Sounds like a case of the only station in a small town getting greedy.

[John Shuk]

I work in Greenwich Connecticut most of the time these days. It is one of the wealthiest places there is. I'm amazed when I see people go to the gas pumps where the price is about $2.75/gal and realize their mistake and pull into the FULL serve pumps instead for about 40 or 50 cents more pg. It is unreal. I hope I'm never that out of touch.

[Dennis Peacock]

I hate our gas prices. Makes it hard to drive anywhere as well as a much higher grocery bill. Who would have ever thought that milk would be at $5 per gallon????!!!!!!

I agree with Chris that the U.S. needs more fuel effecient vehicles, but what about those of us that can NOT afford the price of a new effecient vehicle? Some of us can't afford to pay for a $30K vehicle much less keep our families properly fed and find less expensive ways to heat / cool our homes.

When will this ever stop?

[Frank Hagan]

My kids tell me I'm old when I tell these stories, but I remember gas at 24.9 cents per gallon, and three guys would run out of the station when you pulled up, pump your gas, wash your windows and check your oil and air pressure. It rose to 29.9, and "self serve" became a new thing, and of course I jumped on the bandwagon for "self serve" to save .05 per gallon.

And sometimes they would have a "war", discount the gas, and give you a free glass with every fill up! Plus S&H Green Stamps.

Now, I'm paying $2.50 or more per gallon, and I don't even think there's a guy around the station that would know how to check the oil. He will sell me a candy bar, though.

[Michael Gibbons]

Ever since high school I never understood the law of "supply and demand". If people are buying your product and you are making the profit you want ,why increase the price when the demand is up? Give you an example . A while back I ordered a set of LN chisels at $50 each. I waited 11 weeks for them to arrive. Even though the demand went up after everyone decided that they wanted a set, the price remained at $50. As for the gas, the oil gets shipped via the same means 7 days a week, gets proccesed via the same equipment and gets delivered by the same trucks and rail cars. No company I ever heard of gives their employees raises that would induce those price changes at the pump. So as I see it, the prices and profit for the oil companies are going nowhere but up. And did you ever notice that the same people complaining are the same ones walking out of the gas station with 3 packs of cigarettes at $5 each. :confused: Another scenario would be to have everyone cease all extra traveling trips. As for the war in Iraq, I would say it's not over oil because it has done nothing to lower the price of oil and I don't think it ever will.

[Cecil Arnold]

Remember the movie Wall Street. Greed is good! At least that what we seem to be seeing on the part of business. Productivity goes up, the workers don't get raises but management at the top gets millions.

[Curt Harms]

[QUOTE=Mark Riegsecker]The govt always wants to stick its nose in everything but this, I guess getting gouged by big oil with their profits at record levels is OK. I'm a free trader but where's the competition?

I've wondered about the competition thing. In the merger-crazy late 90's-early 00's I think 15 refiners became 8, and Exxon & Mobil merged etc. etc. I wondered at the time what the effect on energy markets would be(prices going down due to the efficiencies of scale? Sure 'nuff :mad: ) I'm sure that's not the whole story(demand from China etc.) but I doubt the oligopolies are helping.

[Frank Hagan]

If you're really interested in why there's not much local competition for gasoline prices, do a Google search on "zone pricing". There is a kind of price fixing that goes on at the regional level so that local gas retailers really can't vary the price by more than a few cents.

There was some evidence that refineries have been jacking the price up for the same service here in California, but the oil suppliers aren't ... they are passing through the higher priced oil at comparable prices. Sometimes the "stats" you hear about oil company profits are exaggerated. If someone says "they have 5 billion more in profits" that really doesn't mean they earned MORE on a percentage basis. They could have the same net profit per dollar, or even less net profit per dollar, but have higher overall profits because the stuff they are selling is costing more. 10% net profit of $1,000 is $100, but 10% of $1,500 is $150, an "obscene" "50% increase in profits!"

[John Hart]

What I don't understand is why prices are relatively the same from state to state when additives and taxes vary so much from state to state. California gas prices should be substantially higher because of extra refining steps due to environmental additives plus extra taxes. But what I'm hearing is that California prices are about the same as Texas which doesn't have the same restrictions or taxes. Just seems odd.

[Lee DeRaud]

What I don't understand is why prices are relatively the same from state to state when additives and taxes vary so much from state to state. California gas prices should be substantially higher because of extra refining steps due to environmental additives plus extra taxes. But what I'm hearing is that California prices are about the same as Texas which doesn't have the same restrictions or taxes. Just seems odd.Not sure where you're hearing that, but we're (still) paying about 30-40 cents higher than Texas on average. I'm sure you can find exceptions, but that difference in price has held steady for years.

[John Hart]

Sorry Lee...You're right. I just checked Gasbuddy.com and you are 30 cents higher than San Antonio. I was just listening to my parents....Sheesh..When will I learn?

Your prices are the same as mine though....But that is just Ohio being Ohio...If you have high prices, they want them too. (Price envy)

[Chris Padilla]

The Bay Area has some of the most expensive gas in the US. The demand here is so high and no one wants a refinery "in their backyard" so no new ones get built...so gas remains pretty expensive for this locality.

I just filled up for $2.73 per gallon (91 octane, BMWs like the pricier stuff....)

[Gil Mitchell]

how about diesel, it's a byproduct from making gas but it cost more. it use to cost less than gas until about amonth after I bought a diesel truck

[John Miliunas]

how about diesel, it's a byproduct from making gas but it cost more. it use to cost less than gas until about amonth after I bought a diesel truck

Gil, part of what you just said is one of the reasons I don't buy into this "supply & demand" horse pucky! Manufacturers of the big rig diesels have done a great job in improving their efficiency and aerodynamics. Hence, more economical to run. Ahhh, but no. Now the oil bosses aren't profiting as much off the diesel as they used to, because there's less being used per mile. So, they jack up the price and their fat pockets remain fat. Kind of like when the big 9/11 tragedy happened. People really cut back on going anywhere or doing much of anything. Stands to reason then, the demand lessened, so the fuel prices should go down right? Wrong answer. The oil dogs then started saying they're "losing money, because they're not selling as much", so they had to raise the prices!:mad:

Maybe I'm being overly cynical, but IMHO, as long as the oil companies continue in their greedy ways, there will be no relieve in sight. And don't even get me started on what I think regarding much of the government literally being "run" by these same companies!:mad: :cool:

[Norman Hitt]

Gil, part of what you just said is one of the reasons I don't buy into this "supply & demand" horse pucky! Manufacturers of the big rig diesels have done a great job in improving their efficiency and aerodynamics. Hence, more economical to run. Ahhh, but no. Now the oil bosses aren't profiting as much off the diesel as they used to, because there's less being used per mile. So, they jack up the price and their fat pockets remain fat. Kind of like when the big 9/11 tragedy happened. People really cut back on going anywhere or doing much of anything. Stands to reason then, the demand lessened, so the fuel prices should go down right? Wrong answer. The oil dogs then started saying they're "losing money, because they're not selling as much", so they had to raise the prices!:mad:

Maybe I'm being overly cynical, but IMHO, as long as the oil companies continue in their greedy ways, there will be no relieve in sight. And don't even get me started on what I think regarding much of the government literally being "run" by these same companies!:mad: :cool:

Aaaah, but John, you forgot one thing, you forgot to include the Pharmaceutical Companies in there. :D

[Rich Konopka]

I had posted this site called GasBuddy.com (http://www.gasbuddy.com/) a few months back. It helped me locate 2 stations in my town which has some of the most inexpensive gas for our region. Check it out.

Another item to note is that I had watched a Discovery show about refineries and the gas distribution network in the country. This show said that the states in Northeast and Midwest are at the end of the distribution pipeline and the refined gas that flows from down south all ends up as the same regardless of the Brand ( Shell, Exxon, Mobil....). There are different octanes of course. They do add additives which make some difference but it is the same gas for the most part. That is not always the case in Ca and the south.

With the recent prices of new trucks I have been tempted to pick up a truck but I just can't bring myself around to doing it. I love the Avalanche w/o body armour and just can't see myself pumping and pumping it up. I may look at the 4 cyl / 5 speed Tacoma or Ranger.

[Mike Wilkins]

Lobbyist for the oil and petroleum industry are only outnumbered by lobbyist for the drug industry.
You can figure out the rest from here.

[Nick Adams]

Coming from a family in the oil business, owned 3 "bulk plants" and 14 gas stations at one time.. I know a little about the middleman in that line of business.

What I don't understand is why in the past 8 years gas has become the "new" comodity. Gas was always moving in price, everytime a semi droped fuel at the stations we buy from the prices of those stations would change, and when the next load came in higer or lower priced the price would reflect that.

However it seems now that prices go up daily , and sometimes more often then that. What they PAID for the fuel in the tanks at the station didnt change, however they may make more on that gas.

I contacted our old supplier and asked for a 3 month back log on gas prices for my area. What it would cost our old companies to buy, not the consumer.

Variations were from 2 cents profit per gallon sold to nearly 90 cents per gallon sold.

I personally don't care alot at the moment. There is nothing I can do in my finacial situation. I drive a car that averages between 25-32mpg and will still perform like a real car not a golf cart. Trading it off to purchase a new car able to obtain 40-45mpg wont save me 300-400 a month over the next 3-5 years so I cant justify it. Nm the increase in insurance ....