Fuel Prices

[ultraflo]

The 100 octane unleaded turbo blue I run in my Mach1 has managed to stay at the same $3.89 that it was at the beginning of last year...

Originally Posted by ultraflo

The 100 octane unleaded turbo blue I run in my Mach1 has managed to stay at the same $3.89 that it was at the beginning of last year...

really? that is surprising actually.

[MEDIK418]

Second, the people with the large, expensive SUV's, don't give two shits about how much they pay for fuel. If you can afford these large, gas guzzling vehicles, you can certainly afford to drop a $100 into the tank. Mentality like that also keeps the demand high.

Ok, now we're getting somewhere. Maybe I forgot to finish part of my last quote. EVERYONE is going to have to stop driving so much. Did you know that we are driving MORE now than we were two years ago. On average Americans are driving more than when gas prices shot up two years ago. Not just the big rich SUV drivers (which by the way, I take tremendous offense with your reference that only rich people can afford to drive but I'll address that in a minute) but every one of the little buzzmobiles I see every time I visit San Diego. The traffic never seems to stop 24 hours a day out there. Something else too, how many do you see in the express lanes? Not many. Phoenix, California, Washington DC, you name the place we as America are too self involved to share a ride with the people we work with every day. Oh, there are a few but there again, it seems the country wasted a lot of taxpayer money building carpool lanes that sit empty until after rush hour is over.
Theory? It's not a theory that we are running on one tenth the number of refineries we were in 1970. There wasn't a shortage then and there's none now. The plant I work in is running at maximum but our tanks are as full now as they were a month ago. The summer rush had more to do with inventories than Katrina did. Yes, there were spot shortages while the big pipelies were down but that should have corrected itself by now. And it has according to gas prices. Remember. . . .oil companies jack prices up in an attempt to make us drive less and use less gas bacause they forsee an opportunity for shortages later on down the road. It should be a harbinger of things to come, not a reason to gripe and blame politicians.
Let's address government stockpiles of crude oil. Do you actually know how much they have for us? Not even a day's worth of crude, that's how much. If you turned off the wells, the tankers coming from Russia, and the middle east, they government stockpile wouldn't last a day. It's a joke. The only reason they keep them around is that it makes politicians warm and fuzzy thinking that they have us convinced that we're safe relying on the spare oil they stocked up on. It's a joke. I'm not making this up, look in the business section of your local newspaper. It tells right there in black and white how much crude oil we go through each and every day of our lives and it makes the federal government look awful stupid when you consider how much oil is in this so-called government reserve. The only affect that releasing the oil they said they were going to was the same affect that 9/11 had on the price of gas. People THOUGHT there was going to be a shortage so they went into a panic-buying frenzy and caused spot shortages across the country. This time, with Katrina, the government said they were going to release some oil and people relaxed a little. The jobbers realized the panic was about over and prices started going down. It happens every time there's a hiccup in the oil industry nowadays.
Here's a little lesson to mull over. The plant I work at suffered through a series of really bad luck events beginning in January. Failed airfins, an explosion, a couple of fires. . .all contributed to our not being able to produce ANYTHING for 123 days. That was 144,000 barrels of crude that didn't get processed every day we were down. Did you see a jump in gas prices? Nope! not a one. Why? Because the press didn't get wind of it that's why. The good ole news media didn't have the opportunity to put America in a panic like they so love to do. We're so far back in the sticks, they didn't find out about us.
Now, let's talk about the people with the large SUVs who don't give a crap about how much we pay for gas. Your theory is full of bugjuice. Like I said, I drive one and I've had to shut down a lot of driving lately. My son who has a 120mile commute (one way) has opted to live in the town he works in for the 7 days he has to be there (7 on and 7 off) Why? Because we pay the same price for gas as everyone else and it hurts us just as much as the next guy. I've gone from driving about 3 tankfulls out every month to one. That's with two of us driving it to work. I've ressurected an old Suzuki 750 to get to work in a week or so. We look for ways to consolidate errands to make the most of the gas we have. I'm not sure how much you think a person has to make for a living to buy one of these things but it's not much more than most small cars on the market these days. (Besides that, California has more little cars running around the state than anyone and they use more gas than most other states.) I drive it because I like the room and yes, I choose to pay the penalty for doing so at the pump but don't tell me I don't hurt every time I fill up. You don't have a monopoly on cash limits here. I've got a Mustang in the driveway that's a clutch and a X-pipe away from being finished enough to drive but guess what? I spent most of the extra money on gas last month. I still stand by what I said. You want to slow the price of gas down a bit? Stop driving so much. EVERYONE. If theres' no market for the stuff, it won't be worth as much. Another thing, next time there's a calamity like the one that happened to the Gufl coast, dont' cause the prices to shoot shy high by lining up at the pump in block long lines to get the last drop of gas before the next truckload shows up. This kind of crap feeds the media like a school of sharks. One front page headline with a picture of the morons sitting in line for gas is usually all it takes for the gasoline distributors to start seeing dollar signs. Why do I say this? Because I know several of them and they love this stuff. It would take weeks for an event like that to start affecting the gasoline and oil reserves in this country. OK, forget I mentioned reserves, insert the word inventories for that. Anyway, I don't mean for this to be mean spirited but I'm sick of the lies that the national media is telling about anything that affects this country and on this subject, I can shed a little light. I've been in this business for over 25 years now and I laugh every time I see a story on the gas crisis. Not because of the effects but becasue of the lies I see in the news over it. Think of how many personal owned vehicles we have in this country. Millions upon millions. Think how much gas we would save for another day if each of those vehicles drove just 2 percent less each week. I don't have the answer buy can bet it would make a big dent in the price of gas in this country. Till then, I can promise that there are a lot of folks out there who are doing all they can to make as much gas as they possibly can with the equipment they have to work with and they'll continue to do so as long as we can.

[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.

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.

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.

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.

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.

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.

[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 MEDIK418

Ok, now we're getting somewhere. Maybe I forgot to finish part of my last quote. EVERYONE is going to have to stop driving so much. Did you know that we are driving MORE now than we were two years ago. On average Americans are driving more than when gas prices shot up two years ago. Not just the big rich SUV drivers (which by the way, I take tremendous offense with your reference that only rich people can afford to drive but I'll address that in a minute) but every one of the little buzzmobiles I see every time I visit San Diego.

The traffic never seems to stop 24 hours a day out there. Something else too, how many do you see in the express lanes? Not many. Phoenix, California, Washington DC, you name the place we as America are too self involved to share a ride with the people we work with every day. Oh, there are a few but there again, it seems the country wasted a lot of taxpayer money building carpool lanes that sit empty until after rush hour is over.

Theory? It's not a theory that we are running on one tenth the number of refineries we were in 1970. There wasn't a shortage then and there's none now. The plant I work in is running at maximum but our tanks are as full now as they were a month ago. The summer rush had more to do with inventories than Katrina did. Yes, there were spot shortages while the big pipelies were down but that should have corrected itself by now. And it has according to gas prices. Remember. . . .oil companies jack prices up in an attempt to make us drive less and use less gas bacause they forsee an opportunity for shortages later on down the road. It should be a harbinger of things to come, not a reason to gripe and blame politicians.

Let's address government stockpiles of crude oil. Do you actually know how much they have for us? Not even a day's worth of crude, that's how much. If you turned off the wells, the tankers coming from Russia, and the middle east, they government stockpile wouldn't last a day. It's a joke. The only reason they keep them around is that it makes politicians warm and fuzzy thinking that they have us convinced that we're safe relying on the spare oil they stocked up on. It's a joke. I'm not making this up, look in the business section of your local newspaper. It tells right there in black and white how much crude oil we go through each and every day of our lives and it makes the federal government look awful stupid when you consider how much oil is in this so-called government reserve. The only affect that releasing the oil they said they were going to was the same affect that 9/11 had on the price of gas. People THOUGHT there was going to be a shortage so they went into a panic-buying frenzy and caused spot shortages across the country. This time, with Katrina, the government said they were going to release some oil and people relaxed a little. The jobbers realized the panic was about over and prices started going down. It happens every time there's a hiccup in the oil industry nowadays.

Here's a little lesson to mull over. The plant I work at suffered through a series of really bad luck events beginning in January. Failed airfins, an explosion, a couple of fires. . .all contributed to our not being able to produce ANYTHING for 123 days. That was 144,000 barrels of crude that didn't get processed every day we were down. Did you see a jump in gas prices? Nope! not a one. Why? Because the press didn't get wind of it that's why. The good ole news media didn't have the opportunity to put America in a panic like they so love to do. We're so far back in the sticks, they didn't find out about us.

Now, let's talk about the people with the large SUVs who don't give a crap about how much we pay for gas. Your theory is full of bugjuice. Like I said, I drive one and I've had to shut down a lot of driving lately. My son who has a 120mile commute (one way) has opted to live in the town he works in for the 7 days he has to be there (7 on and 7 off) Why? Because we pay the same price for gas as everyone else and it hurts us just as much as the next guy. I've gone from driving about 3 tankfulls out every month to one. That's with two of us driving it to work. I've ressurected an old Suzuki 750 to get to work in a week or so. We look for ways to consolidate errands to make the most of the gas we have. I'm not sure how much you think a person has to make for a living to buy one of these things but it's not much more than most small cars on the market these days. (Besides that, California has more little cars running around the state than anyone and they use more gas than most other states.) I drive it because I like the room and yes, I choose to pay the penalty for doing so at the pump but don't tell me I don't hurt every time I fill up. You don't have a monopoly on cash limits here. I've got a Mustang in the driveway that's a clutch and a X-pipe away from being finished enough to drive but guess what? I spent most of the extra money on gas last month. I still stand by what I said.

You want to slow the price of gas down a bit? Stop driving so much. EVERYONE. If theres' no market for the stuff, it won't be worth as much. Another thing, next time there's a calamity like the one that happened to the Gufl coast, dont' cause the prices to shoot shy high by lining up at the pump in block long lines to get the last drop of gas before the next truckload shows up. This kind of crap feeds the media like a school of sharks. One front page headline with a picture of the morons sitting in line for gas is usually all it takes for the gasoline distributors to start seeing dollar signs. Why do I say this? Because I know several of them and they love this stuff. It would take weeks for an event like that to start affecting the gasoline and oil reserves in this country. OK, forget I mentioned reserves, insert the word inventories for that.

Anyway, I don't mean for this to be mean spirited but I'm sick of the lies that the national media is telling about anything that affects this country and on this subject, I can shed a little light. I've been in this business for over 25 years now and I laugh every time I see a story on the gas crisis. Not because of the effects but because of the lies I see in the news over it. Think of how many personal owned vehicles we have in this country. Millions upon millions. Think how much gas we would save for another day if each of those vehicles drove just 2 percent less each week. I don't have the answer buy can bet it would make a big dent in the price of gas in this country. Till then, I can promise that there are a lot of folks out there who are doing all they can to make as much gas as they possibly can with the equipment they have to work with and they'll continue to do so as long as we can.

Thanks again for another informational post.

I believe we have some 200 million vehicles on the road today and our driving population has also gone way up in the past 25 years. Something no one seems to take into account when talking about the availability and price of gas. Glad you brought it up.

The fact that the morons who instantly top off their gas tanks at the slightest indication of some possible slowing of the gas flow to the pumps has always been a problem, as far back as the 1973 gas 'crisis'. Nothing has changed and the media is as guilty as ever of promoting the 'panic' over gas 'shortages', then making alarmist noises (interviewing grumpy people complaining about the price of gas) when the price inevitably goes up. That so few folks seem to see the correlation between panic buying , some actual gas shortages - and the rise in price is a given.

I doubt this will change, but thanks for the attempt to shed some light on the subject from the point of view of one working inside the oil industry, the medias favorite whipping boy, right after President Bush.

BTW: formatting is your friend. It just reads so much easier.

[ultraflo]

Originally Posted by digital3.3

really? that is surprising actually.

Just goes to show how much of a 'game' it is to jack with fuel prices. Before it was raised to $3.89, it was $3.69 for the longest time, even before/during/after the price hikes associated with 9/11.