Fuel Prices

[Mr 5 0]

Originally Posted by Unit 5302

I've never met or talked to a person working for an oil company that wasn't brutally patriotic about their company or their industry. They always have a dozen really lame-o reasons why they're not to blame. How it's the government's fault. How it's the consumer's fault. How it's OPEC's fault. It's never the oil company's fault, though.

Big companies make big profits. Microsoft makes many billions every year and, except for some money-grabbing federal lawsuits from the Clinton administration, no one cries 'foul'!

MEDIK418 has brought out some very good, factual points surrounding the price of gas...as well as the cost of gas that cannot be waved away as simply loyality to the business he's employed in. Not if you are going to be honest and not give in to knee-jerk, anti-capitalist reflexes or buy into the media demonization of 'big oil' as inherently 'evil'. I trust this will not be the case here.

Comparing the costs today vs 20 years ago looks good on paper until you start seeing things like Exxon Mobil recording a $10 billion profit last quarter.... That's more than any company in the history of the world.

So what? Why should there be a cap on what a company earns? If the price of the product being sold can be justified, which it can, as Exxon Mobil stations were charging retail gas customers prices in the mid-two-dollar range during that last fiscal quarter you mentioned, I see no reason to take their profits , whatever they are, as some smoking gun indicator that they are 'gouging'.

The fact that, adjusted for inflation, we now pay only a bit more for gas than dad did years ago is a significent factor in understanding the reality of the cost - and the price - of gas. That it undercuts your contentions is probably why you are eager to dismiss it but it remains a fact.

The oil companies ARE price gouging. There is no competition in the industry since the monopolistic merger of Exxon and Mobil. The companies in that industry are recording record profits for their industry, and in the case of the aforementioned Exxon-Mobil, in any industry in the history of the planet. The comment that oil companies jack up the price to control our driving habits is ludicrious, and simply insulting. They jack up the price because they know our driving habits, and how to take advantage of them.

You state that as if these oil companies operated without any federal or state regulations whatsoever! That's absurd. The government has plenty of oversight of oil companies and they also tax gas to death, something you neglected to mention. The oil companies do raise pump prices ('jack up') to make a profit, as MEDIK418 stated, and an ancillary benefit is that higher gas costs can lower overall use to some extent. That is axiomatic and will happen whether the oil companies intend it or not.

Refineries routinely go down in this country. Having one or two down isn't uncommon. Especially around or just before a typical driving holiday. That creates a theoretical shortage and voila, a reason to jack up prices. I've seen it used on several holiday's especially Memorial Day and Labor Day.

Profit-taking is a staple of business and raising the price is not a crime. Think about that the next time you buy a $9.00 movie ticket - or a $32,000 Mustang. Watch your insurance rates climb next year when the insurance companies start paying out millions to Gulf Coast residents who lost homes, property and cars...by the hundreds. It's simply the way most companies make a profit in the face of increased costs and by doing so, keep our economy churning quite nicely.

The argument that you can find a good job just around the corner is positively uninformed. Many states in this country have urban sprawl models in place that limit the expansion of business into the suburbs or away from the existing major metropolitan areas. With housing costs rising in the 10-20% range for the majority of the US metro areas, it creates great pressure to move further away from the major employers and commute further to work.

You take a job 30 miles away from your home with the full understanding that you will have to use a larger portion of your budget for gasoline to drive to and from work, as well as spend time on the road. It's a choice we all make. I've done this and so do millions of others. Buy an economical vehicle and you'll get around 30 MPG which will cost you - at today's $3.00-per-gallon prices, about $30. per week for gas to commute. If you can't even afford that, then the job must be part-time and pay minimum wage. Even then, at $6. per hour, you would be making over a hundred dollars a week on a 20-hour schedule. Paying $30. a week for gas would be a noticable bite from your paycheck, but you would still have over $60. per week, net, after gas and taxes. If that isn't enough, then either buy a motorcycle or find a job where you can get public treansportation. Many people do, Kell. I know some.

It's not the federal government keeping the oil industry down by not allowing more drilling in North America. It's the federal government pumping billions of dollars of tax breaks and grants into the industry as a political kick back in turn for the soft money under the table that our politicians get from big oil. The lame attempt at passing the buck along is just the average joe in this country speaking. Most people can't take responsibility for anything, and they simply pass the blame along. As if oil companies aren't a major part of the problem.

Whatever.

The big oil companies you seem to resent so much are owned by shareholders, many of them average Americans, and they want those companies to make a nice profit. The oil companies do make big money - but they are very regulated by government. A government that could cripple them if it really wanted to but won't, for obvious reasons: we need the gas and oil to survive as a nation. The oil companies, like every other big business in America, shovels big checks to both political parties to ensure they are not further regulated - and risk losing more money because of it. Granted, the deals the new federal energy bill gave to the oil companies seemed excessive, so I won't let them off the hook entirely. Money talks. However, I would check my congressman and senator's voting record to see if he or she approved this bill. If so, let them know you are displeased. Ask them to defend their vote. It's the American Way.

However, if government were less involved with the oil business, taxed the product a bit less (fat chance) and didn't place insane restrictions on building refinaries and drilling in frozen wastelands, it would benefit everyone. Unfortunately, that is not the case. So, the oil companies use their largess to influence politicians, as any government-regulated business has been doing for a hundred years. Take the politicians out of the game and the oil companies won't be sending millions to Washington, D.C. every year - because they wouldn't have to. Until then, the oil companies play the hand they are dealt. That we still have an abundent supply of affordable gasoline under the conditions MEDIK418 described is a testimony to the oil companies inventiveness and a temporary spike in gas prices is hardly a reason to demonize them once again, as the media and the anti-business crowd has done. However, this is an old game, promoted by the (mostly) anti-business media and so, will be going on a very long time.

I'm still pleased have gasoline readily available at an affordable price, even if some folks think they should be getting their gas at 1995 prices. Of course, these same folks don't see anything wrong in selling the home they bought in 1995 for three times the price they paid for it. Noooo. That's just 'taking advantage of the market'...when they do it. But let gas prices rise by 30 or 40%, even temporarily, it's 'gouging' and a 'rip-off'.

Whatever.

[MEDIK418]

Thank you Mr. 5.0 for the assist. I was taught long ago that if you want to write, then start writing. Don't think just write. Before you get too far, if you're truly passionate about the subject it will begin to make sense. I have to do this at midnight and only have about 15 minutes to do it. Thus, wysiwyg.
I will address some of the comments unit 5302 made. tomorrow evening. I will try to keep myself reigned in but he made some comments I would like to dispute. One thing I will say tonight though. I will never make an excuse for the prices oil companies are charging for gas right now. I think it's insane and in some cases downright criminal. I will however try to explain how some of the prices, and I'm referring to our everyday high prices got to where they are. Some won't believe it but I promise to be as truthful as I can be.

[ralph s]

praise God we live in the USA. supply and demand. i would rather be at the mercey of an industry then have hillary setting the price of my fuel. fact is i dont believe in price setting or our subsidation of foriegn oil, or any other commodity for that matter. capitolism is what made this nation great, not fed control, state control, or any other socialist notions.
Fact: fuel is expensive
fact: oil companies are in it for the money
fact: if it dont make dollars it dont make sense
change your habits or dont. the idea of blaming a corp that is in buisness to make money for making money is a bit .... at a loss for words. besides with a pressure cooker and copper tube we could make our own fuel. if you can replace floor pans, retrofit drivetrains, etc. you can make ethyl.
end of rant.

[Unit 5302]

So what? So what if big companies make big profits? That's not the point here. Capping profit is inherently against the concept of capitalism. So is the lack of competition, which in a capitalist environment can easily lead to corporate greed and price fixing.

The point is the profit has literally increased between 300%-600% since the merger of Exxon-Mobil. Their gas stations are not responsible for the dramatic increase in profitability.

Microsoft is a very poor example of a fine and upstanding company since they've been attacked in court and defeated for anti-trust violations. Even though I feel Microsoft has made it to its position largely by producing products very few people in the industry actually want or can compete with, growing their products and technology since the inception of the company.

On the other hand, Exxon-Mobil was created out of a merger between two giant corporations, allowed by the federal government despite significant risk to market competition.

I don't know why you keep attempting to go back to the inflation argument. It has almost nothing to do with my complaint. I'm not complaining about the price of oil or gas in itself. I'm complaining about the price of gas that is directly related to the profit the oil companies are making, which also throws out your argument about gas taxes. While profits would need to increase with inflation in order to continue the same adjusted profit, that's hardly reason for a 300-600% increase over the past few years or an 80% increase in the last reported quarter.

I maintain that oil companies do not raise prices to control consumption, and that any person making that argument is naive. I would also wager that the oil companies have not raised their profit component enough at any one period to discourage consumption as that may begin to impact their profitability curve.

Onto government regulation..... Our government, led by a president with huge ties to oil companies decided to give billions of dollars of new tax breaks to the industry. Our government allowed a merger to create the world's second largest oil company despite the great concern of many analysts and consumers. Our goverment hints at an investigation of gas prices, and suddenly prices plummet for a few days quieting the unrest as prices slowly edge back up. You raising this issue is a bit like a prosecutor objecting to an admission of guilt.

Don't get condescending with me. I'm not arguing that people that choose to live further from work shouldn't do so without considering the consequences. I live 3.5mi from my job and own two motorcycles which I use to commute frequently for a reason. Okay, I admit, I own the motorcycles for recreational purposes, but I have begun commuting much more frequently with them because it's so much cheaper.

I realize $100/mo may mean little to the majority, but it does mean something to quite a few people that aren't just making minimum wage or working part time. I'm sure a lot of people that are significantly impacted by the price of fuel are thinking "If I buy another car, that'll fix my budget issue." What do you suppose the average household making $40-60k/yr has for expendible income at the end of the month? Most people I work with have household incomes of around $80k/yr or so. From their net paychecks probably 35% is used to pay for the mortgage, 15% is used to pay for childcare, 15% goes for the car payment, 15% pays for food, leaving 20% of their maybe $52k take home for all other payments. By the time all the bills are paid, that $100 change may be a 10% impact on expendible income. Now, that being said, my model is probably a little conservative with more money being left over, but not every family makes $80k/yr.

Love the shareholder argument. Tell me what percentage of people can invest in a natural resources portfolio within their 401k plan? Seriously. How many average middle class or lower income people have investments in traditionally risky companies? Exxon-Mobil is buying back $5 billion of stock per quarter, and that where the stock is. The company, its employees and especially its high level executives. Of course, there are also a lot of very wealthy shareholders that also like the stock to go up. Few shareholders are middle class non-employee's.

I'm not sure why you were coming after me. My problem is not necessarily with the points MEDIK418 made, but rather with the points he didn't make. He addressed that in his last post, and I'm satisfied.

As for your points, I don't see as they are necessarily relevent to my complaint or even correct under close examination.

[Mr 5 0]

Originally Posted by Unit 5302

So what? So what if big companies make big profits? That's not the point here. Capping profit is inherently against the concept of capitalism. So is the lack of competition, which in a capitalist environment can easily lead to corporate greed and price fixing.

Which is investigated and prosecuted by the Justice Department. You seem to believe that the oil companies simply do as they please and that they are practically unregulated, which is about 180 degrees from the truth. This is 2005, not 1905.

The point is the profit has literally increased between 300%-600% since the merger of Exxon-Mobil. Their gas stations are not responsible for the dramatic increase in profitability.

Because they sell a lot more gas now and costs have gone down over time due to the merger. Cost control and higher profits were the reason for the merger.

Microsoft is a very poor example of a fine and upstanding company since they've been attacked in court and defeated for anti-trust violations.

Which I mentioned. Their profits are also very large, which seems to be what upsets you the most.

Even though I feel Microsoft has made it to its position largely by producing products very few people in the industry actually want or can compete with, growing their products and technology since the inception of the company.

At least you recognize Microsoft's reason for success. Giving people what they want and doing it better than anyone else is the age-old route to business growth and high profits. Henry Ford did it 100 years ago and so have many others, since. When that happens, profit will soar. That some find this natural economic occurrence some symptom of evil intents is rather pathetic.

On the other hand, Exxon-Mobil was created out of a merger between two giant corporations, allowed by the federal government despite significant risk to market competition.

That 'significent risk' is one view and is not shared by all observers.

I don't know why you keep attempting to go back to the inflation argument. It has almost nothing to do with my complaint. I'm not complaining about the price of oil or gas in itself.

I am not at all surprised that you want to dismiss the very real fact that - adjusted for inflation - gas now costs only a bit more than it did 20 or 30 years ago, even though we use a lot more of it, now. That is a significent fact, whether you wish to deal with it, or not.

I'm complaining about the price of gas that is directly related to the profit the oil companies are making, which also throws out your argument about gas taxes.

Not at all. Gas taxes add to the cost of every gallon of gas we put into our vehicles and that is another signigicent factor when discusssing gas prices.

While profits would need to increase with inflation in order to continue the same adjusted profit, that's hardly reason for a 300-600% increase over the past few years or an 80% increase in the last reported quarter.

There are many reasons for the profit increase, as you already know. That rate of profit will not be sustained as expenses will go up and other factors will also impact on the oil companies profits. You must know that, too.

I maintain that oil companies do not raise prices to control consumption, and that any person making that argument is naive. I would also wager that the oil companies have not raised their profit component enough at any one period to discourage consumption as that may begin to impact their profitability curve.

They raise prices when supply is insufficient to demand. So does every other business. C'mon! I have already stated that the fact that high gas prices normally drive down consumption is an ancillary effect of those higher prices and would occur whether the oil companies wanted it to, or not.

Onto government regulation..... Our government, led by a president with huge ties to oil companies decided to give billions of dollars of new tax breaks to the industry. Our government allowed a merger to create the world's second largest oil company despite the great concern of many analysts and consumers. Our goverment hints at an investigation of gas prices, and suddenly prices plummet for a few days quieting the unrest as prices slowly edge back up. You raising this issue is a bit like a prosecutor objecting to an admission of guilt.

The Bush Energy Bill was far too pliant toward the oil companies interests, as I have already stated. Do you even read anything I post or do you just skim and look for points to oppose?

Every time gas prices go up sharply members of congress and the public demand an investigation. They usually get it and no 'gouging' is ever found, no matter who does the investigating.

Don't get condescending with me. I'm not arguing that people that choose to live further from work shouldn't do so without considering the consequences. I live 3.5mi from my job and own two motorcycles which I use to commute frequently for a reason. Okay, I admit, I own the motorcycles for recreational purposes, but I have begun commuting much more frequently with them because it's so much cheaper.

Stating realities is not 'condescending', Kell. We all make our choices and those who choose to commute a long distance 5 days a week and then cry when gas prices go up sharply are somewhat naive.

I realize $100/mo may mean little to the majority, but it does mean something to quite a few people that aren't just making minimum wage or working part time. I'm sure a lot of people that are significantly impacted by the price of fuel are thinking "If I buy another car, that'll fix my budget issue." What do you suppose the average household making $40-60k/yr has for expendible income at the end of the month? Most people I work with have household incomes of around $80k/yr or so. From their net paychecks probably 35% is used to pay for the mortgage, 15% is used to pay for childcare, 15% goes for the car payment, 15% pays for food, leaving 20% of their maybe $52k take home for all other payments. By the time all the bills are paid, that $100 change may be a 10% impact on expendible income. Now, that being said, my model is probably a little conservative with more money being left over, but not every family makes $80k/yr.

Gas prices certainly do have some impact on the economy as a whole, beginning with each citizens household budget. I never said that they didn't. In our generally affluent country, we still pay less for gas than many, less-affluent country's drivers do, which is great, in my opinion. How much the current rise in U.S. pump gas prices will actually impact our overall economy remains to be seen.

Love the shareholder argument. Tell me what percentage of people can invest in a natural resources portfolio within their 401k plan? Seriously. How many average middle class or lower income people have investments in traditionally risky companies? Exxon-Mobil is buying back $5 billion of stock per quarter, and that where the stock is. The company, its employees and especially its high level executives. Of course, there are also a lot of very wealthy shareholders that also like the stock to go up. Few shareholders are middle class non-employee's.

Perhaps, but whomever owns that Exxon-Mobil stock has a reasonable expectation that it will perform well, as any stockholder does, regardless of their income level or sophistication. To imply that if a stockholder is not solidly middle-class they don't count is ridiculous. I thought you respected and understood capitalism?

I'm not sure why you were coming after me. My problem is not necessarily with the points MEDIK418 made, but rather with the points he didn't make. He addressed that in his last post, and I'm satisfied.

I simply disagreed with some of the things you posted and wanted to give another point of view. That your screen name is on the posts is irrelevant. I would have made the same replies to anyone who held the same opinions on the same issues.

As for your points, I don't see as they are necessarily relevent to my complaint or even correct under close examination.

I think they are clearly relevant and your opinion of their accuracy is open to debate, which is what the forum is for, isn't it? However, I am getting tired of going over the same basic ground and am quite willing to give you the last word here in order to conclude our exchange, as the price of gas has dropped and the issue is becoming stale at this point...at least, for me.

[82 GT]

Mr.5 0 , I'm going to venture a guess that you were on the high school debate team

[Unit 5302]

Originally Posted by Mr 5 0

Which is investigated and prosecuted by the Justice Department. You seem to believe that the oil companies simply do as they please and that they are practically unregulated, which is about 180 degrees from the truth. This is 2005, not 1905.



Because they sell a lot more gas now and costs have gone down over time due to the merger. Cost control and higher profits were the reason for the merger.



Which I mentioned. Their profits are also very large, which seems to be what upsets you the most.



At least you recognize Microsoft's reason for success. Giving people what they want and doing it better than anyone else is the age-old route to business growth and high profits. Henry Ford did it 100 years ago and so have many others, since. When that happens, profit will soar. That some find this natural economic occurrence some symptom of evil intents is rather pathetic.



That 'significent risk' is one view and is not shared by all observers.



I am not at all surprised that you want to dismiss the very real fact that - adjusted for inflation - gas now costs only a bit more than it did 20 or 30 years ago, even though we use a lot more of it, now. That is a significent fact, whether you wish to deal with it, or not.



Not at all. Gas taxes add to the cost of every gallon of gas we put into our vehicles and that is another signigicent factor when discusssing gas prices.



There are many reasons for the profit increase, as you already know. That rate of profit will not be sustained as expenses will go up and other factors will also impact on the oil companies profits. You must know that, too.



They raise prices when supply is insufficient to demand. So does every other business. C'mon! I have already stated that the fact that high gas prices normally drive down consumption is an ancillary effect of those higher prices and would occur whether the oil companies wanted it to, or not.



The Bush Energy Bill was far too pliant toward the oil companies interests, as I have already stated. Do you even read anything I post or do you just skim and look for points to oppose?

Every time gas prices go up sharply members of congress and the public demand an investigation. They usually get it and no 'gouging' is ever found, no matter who does the investigating.



Stating realities is not 'condescending', Kell. We all make our choices and those who choose to commute a long distance 5 days a week and then cry when gas prices go up sharply are somewhat naive.



Gas prices certainly do have some impact on the economy as a whole, beginning with each citizens household budget. I never said that they didn't. In our generally affluent country, we still pay less for gas than many, less-affluent country's drivers do, which is great, in my opinion. How much the current rise in U.S. pump gas prices will actually impact our overall economy remains to be seen.



Perhaps, but whomever owns that Exxon-Mobil stock has a reasonable expectation that it will perform well, as any stockholder does, regardless of their income level or sophistication. To imply that if a stockholder is not solidly middle-class they don't count is ridiculous. I thought you respected and understood capitalism?



I simply disagreed with some of the things you posted and wanted to give another point of view. That your screen name is on the posts is irrelevant. I would have made the same replies to anyone who held the same opinions on the same issues.



I think they are clearly relevant and your opinion of their accuracy is open to debate, which is what the forum is for, isn't it? However, I am getting tired of going over the same basic ground and am quite willing to give you the last word here in order to conclude our exchange, as the price of gas has dropped and the issue is becoming stale at this point...at least, for me.

Stale. Simply because you have no way to actually debate me, this is becoming stale is it? After making it more than abundantly clear what my main issue was with the cost of gasoline, you simply ignored it and continued babbling on about irrelevent material. Perhaps you were hoping that innundating myself and other members with naive opinions and unrelated debate topics would present a more powerful position than what you actually had. For most people, you probably did. Changing the subject is what many politicans do when they're beat. You're not a very gracious loser, are you? Well then, since you have nothing relevent to my points that you'd like to address, I'm going to leave this political game.

[82 GT]

Well, I may not know as much about politics as you and Mr. 50 do but I did understand the point you were trying to make.
Having said that, anything that I tried to point out early in the thread was considered mute.
I quit because Mr. 5 0 has a servere superiorority complex and ego.

[Mr 5 0]

Originally Posted by Unit 5302

Stale. Simply because you have no way to actually debate me, this is becoming stale is it? After making it more than abundantly clear what my main issue was with the cost of gasoline, you simply ignored it and continued babbling on about irrelevent material. Perhaps you were hoping that innundating myself and other members with naive opinions and unrelated debate topics would present a more powerful position than what you actually had. For most people, you probably did. Changing the subject is what many politicans do when they're beat. You're not a very gracious loser, are you? Well then, since you have nothing relevent to my points that you'd like to address, I'm going to leave this political game.

Awww, Kell. You disappoint me. I had hoped you would have adequately matured by now to be, at least, gracious enough to take the 'last word' I offered and not use it to launch pathetically lame attempts to belittle me when you cannot dominate the thread or legitimately dismiss my cogent responses to you. I guess I should have known better. You always go into a pout when you cannot dominate. Nothing has changed. How sad.

The price of gas is dropping daily and that does render the original discussion points - that oil companies are 'gouging' and make obscene profits...in your opinion...moot, whether you can admit or not. Give it up.

[82 GT]

It's amazing how someone can claim a "victory" in a totally objective discussion. How does that work Mr. 5 0?
A debate is like an argument with your girlfriend or wife....neither side ever capitulates. Both sides continue believing that their views are the correct ones.
Remeber that superiority complex I was telling you that you had?
It has shown it's ugly head multiple times during this thread.
I have also observed you "belittling" unit and others throughout this thread.

Also, how is it that you dislike people judging you who "don't know you from Adam", but it seems perfectly ok for YOU to judge others that "you don't know from Adam"?
Most of us have never met you but you're painting an ugly picture of yourself.