No, as far as gasoline is concerned they are pricegouging plain and simple. Why? Because they can. Because we have no other choice but to buy it no matter what price they charge.
Pure bull****.
We're being raped, plain and simple.
It's greed, big business puttin the johnson up our exposed asses, taking advantage of the situation.
Any facts? Can any of the people quoted answer the following questions without using google:
1. What are the proven oil reserves, what is current production (barrels per day)? What is current world demand (barrels per day) and what is that anticipated demand moving into 2025? What percentage of that is demand is U.S. , Chinese, Japanese, Indian and what are the projections for the rest of the decade?
2. Respectively define "NYMEX," "spot market," and rack. What role does each play in setting the street price of gasoline. Which players influence pricing at those bodies and in what ways?
3. What portion of the gasoline price is directly related to the price of crude? How is the price of crude set?
4. What is an oil company? Where are they located? Who owns them? Where do they do business? Who do they get their crude from and how? What is the competitive environment like today? Who does the refining? Who does the marketing? What is the difference between a refiner marketer and an integrated oil company? Who do they sell it to?
5. Define wholesaler, marketer, jobber, open dealer, direct dealer and what type of contractual arrangements do they have with both suppliers and customers?
6. What is the average gross retail margin on a gallon of gasoline? How much does a major credit card company make on that same gallon off of the merchant?
7. How often does the retailer have to fill those 10,000 gal. tanks, and what is the purchasing process to make that happen? What is the typical line of credit for filling those tanks and how is that impacted by increases in wholesale price? What percentage of net site profit typically comes from gasoline compared to other profit centers?
8. What were the average refining returns in the 1990s and how does that compare to the S&P? What role do these returns play in new investment in capacity (it's a mistake to focus on "new" refineries over capacity at existing refineries)?
9. How is a gallon of gasoline "sold" from the refniery gate to your gas tank. Please define each step and any price component added during that step.
10. What would be your detailed, practical solution to the issue? One that would result in a working, efficient petroleum market for the US that offers lower gas prices while operating in a global energy market?
Holiday Inn aside, I would suggest that if you can't answer most of these in detail you don't have any basis, beyond emotion, for your opinions. Not even a basis to start having this discussion.
I had been seeing price swings of as much as 20 cents/gal in 24 hrs, and nearly 50 cents/gal in less than a week. Gas went from a little over $2.00/gal to over $3.00/gal and now back to $2.19/gal, with large swings in both directions during that time.
I have a hard time beleiving that 'demand' has been fluctuating that wildly, and am wondering what the role of speculation has been in the price of this deregulated commodity.
That's a good point. Oil and gas are sold on commodities markets and herd mentality is a fact of life. You get a disruption like Katrina and you not only have real, natural issues but fear and greed. Some of the swing would be natural given the circumstances, but the extent clearly has some speculation involved. The consumer advocates I spoke with were actually hot on this topic. There's an area that might need some regulatory revision and oversight.
Oil makes alot of things. Including plastic as one of its main byproducts. Yet I do not see the price of plastic goods going through the roof.
I don’t know about through the roof, but you are seeing it and you will see it increasingly as we move down the road. The $3 gasoline prices recovered quickly as imports flooded the market and refineries and pipelines got back online. However, we were already well into $2+ gasoline before Katrina, had been for a while, and those prices are here for some time according to most analysts. This, along with transportation costs and consumer impact are fueling the recession fears.
And if crude oil was selling at such a high price, explain how the oil companies are showing "Record profits".
One would think these prices would be cutting into their bottom line just as gasoline prices cut into mine.
Because crude prices are at record (far record) highs compared to the expenses. In 2000 crude was still being kept at the $25 bbl range -- it’s now $60 bbl and the volume is through the roof. The amount of energy used with E&P is a non-issue, and gets added to the cost of goods as oil moves through the system. Refiners are making good money now (and that is energy intensive) but again that gets added into the cost of goods.
If you really want to stick it to big oil, drive more fuel-efficient vehicles. We are by far the largest consumer of oil in the world, and most of that is transportation related fuel. A small fractional shift in consumption could cover the entire production of a single refinery.
Charon
