Posted on 05/13/2011 6:05:22 PM PDT by publius321
by Thurston Howell
Everywhere you go people are talking about gas prices. One of the most common questions: WHY does the price of gasoline IMMEDIATELY skyrocket at the pump the very day that oil prices –rise- but barely move when oil prices plunge?
That’s a reasonable question to ask as we all know that the price they paid for that gas already under ground didn’t cost them the new, higher closing price of that day.
They justify this by attributing the new higher price to... (continued)
(Excerpt) Read more at ThurstonHowell.NET ...
why don’t those being “raped” invest in oil?
and get “rich”?
Unless government at any level, then they are complicit in this.
The Walmart near me constantly changes its price up or down according to the price of oil. You can go in the store and the price will be 3.75 and come out and it’s 3.64. Or vice versa.
Don’t knock Big Oil. They are good at making money and your pension plan and mutual funds are heavily invested in them, so they are making money for you. Now, don’t you feel better?
Kind of hard to make a profit when you have to refine up to 34 blends of gasoline. Each time they have to purge the system to start the run on the next blend.
They drop all of those blends and go with just 5 or 6 for the entire country and we would have all the gasoline we wanted.
Consumers are being raped by enviro whackos who won’t allow enough drilling/refining to meet more of our domestic demand while insisting on boutique fuels - needlessly complicating the refining process.
We aren’t getting our message out - the avg voter doesn’t understand what a colossal scam the global warming, pristine ANWR, no offshore drilling, nimby refining is.
The refiners have a monopoly because no one is allowed to build new refineries?
Consumers being raped by Oil Refiners
by Thurston Howell
How did the millionaire get off Gilligan’s island.
Hard to make a profit??? They made a combined 34 billion in profits in three months...
For those who don't think about it, that would make 34,000 millionaires in 3 months...
They don't have a profit problem...We have a sucker problem...
Bingo!
You had better get some research under your little belt.
Exxon paid in excess of 8 billion in taxes.
How is it that it isnt ok for Oil companies to make 10 cents a gallon of gasoline yet the government gets 1 dollar a gallon?
“Lovey” died and he used her corpse as a raft.
I agree with every point made here such as those related to enviromental Marxists, taxes, investing in oil companies as a hedge, which I g=have long advocated. The author, whom I know very well agrees too.
The end of the blog covers the fact that the government would have the gas prices far higher if permitted to “help”.
The point is not that we don’t need more drilling, less taxes and less regulations. That is all a major part of it. But the general ignorance about the subject allows the oil companies to expoit the situation when oil prices are higher, hence adding salt to the wound.
If they stepped up the refining to 99% as they could, gas would still be relatively high, but it would be significantly less than now. To me, $3.50 a gallon is still expensive (anything over $2.50 is excessive) - but the current $4.07 I saw today is RAPACITY - and that has somewhat to do with our “American Opec” - which I wrote at http://www.TableOfWisdom.com
There I go into all of this as well as a MAJOR reason for the rise being predatory monetary policy by the federal Reserve coupled with the barnkrupting of the treasury through the profusion of government...
There are many factors having an influence. I certainly do not advocate for one second, the elected scoundrels intervening in any way. I advocate oil executives making prudent LONG TERM decisions for the LONG TERM good of shareholder equity. Running refineries at 79% capacity is NOT good for long term shareholder equity when it is about to drive us into a prolonged depression. These gas prices are far more aggressive than even the Saboteur in Chiefs tax increase fantasies at this point.
This is being handled imprudently because the short-term interest of executives (who are not majority shareholders like in the old days when owners and their families closely held the stock) are making decisions that more likely help them to exersize their stock options. ......... The emphasis is the next quarter, not next year.
Read American OPEC at http://www.tableofwisdom.com
NO!We’re being raped by State and Federal Taxes on Fuel.
First off, since when has there been “gasoline in the ground” ? Its been my experience gasoline was the product of a lot of capital investment and damn hard, exacting work by a lot of folks......
As for “pump prices”; in a rising cost market if you - as a fuel retailer - sell out of product you have to have the cash to buy more. And its going to cost more. Where does the “difference” come from ? Who “makes it up” ? Yours is already a marginal business with little profit to “make up” the difference.
Refiners make product they sell to wholesalers. Wholesalers sell to distributors who sell to retailers. All are marginal businesses that have to pass on increased costs immediately. There are very few “vertically integrated” energy companies controlling their product costs from crude to pump.
In our economy gasoline is a “commodity” pipelined across the nation and formulated to buyers’ specifications at the distribution level. Ask yourself what makes one brand of gasoline different from another ? Or what makes one “octane grade” different from another. Its additives ! Cleaners, anti-knock agents, dyes, and octane boosters. Most are added at the distribution level, but can be added at the pump. IAC, picking on retailers is futile. They’re as much a “prisoner” of the system as you. >PS
The cost-push fallacy all over again.
The price is determined by the CUSTOMER, not by the supplier.
Ahhhhh, YES, we -are- being raped by taxes. Nobody said we are not. In my state of Florida, state and local taxes are almost 60 cents a gallon. (But that wis because we don’t have a state income tax. It allows us to get tourists to help pay our taxes.)
I get worn out aguing with Kool-Aid drinkers who think everything is mutually exclusive. We ALSO being raped by extremely low refining capacity utilization rates. Digest the rates below. I GUARANTEE you a record quarter for Exxon Mobile next quarter despite falling oil prices during this time. It will not be achieved because we haven’t drilled enough. It will not be achieved because we have not built a refinery. It will be achived because of what the 30+ years of empiracal data shows below.
They have every right to be stupid and help us go into the financial meltdown all the sooner. Or they could step up refining and have a chance to still make a good short term profit on $2.50-$3.00 a gallon for years to come.
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1985 74.0 73.8 73.7 76.5 78.4 79.3 80.8 77.7 76.9 78.6 80.3 81.2
1986 81.4 77.9 75.9 81.5 86.0 86.3 84.1 86.8 85.5 82.6 83.7 83.6
1988 82.8 80.9 83.3 84.0 85.7 86.0 86.5 87.4 83.7 83.4 83.9 85.1
1989 86.2 82.8 83.8 83.7 86.5 89.6 88.9 89.3 88.4 86.1 86.1 84.0
1990 87.8 87.9 83.9 85.0 87.1 89.1 92.4 90.7 91.1 83.5 84.2 82.8
1991 82.5 84.4 83.2 84.6 87.5 89.8 88.8 89.1 88.3 83.4 83.7 86.6
1992 83.4 81.3 85.1 85.5 89.4 92.4 91.9 89.1 90.7 89.3 90.1 87.5
1993 86.8 86.6 89.3 91.3 92.8 95.1 95.1 92.7 92.8 91.8 91.9 91.2
1994 89.8 88.7 87.6 92.4 95.4 95.8 95.5 96.4 94.4 89.8 92.7 92.6
1995 89.6 87.9 86.7 90.5 94.0 95.6 94.0 94.0 95.6 90.5 92.1 93.3
1996 90.6 90.2 91.8 95.0 95.8 96.4 94.9 95.0 95.9 94.6 94.2 94.3
1997 89.1 88.0 90.6 92.6 97.5 97.8 97.1 98.9 99.6 97.0 95.8 97.2
1998 93.3 90.7 94.7 97.5 98.4 99.1 99.2 99.9 95.0 89.6 94.8 95.1
1999 90.4 90.0 90.9 94.6 93.9 93.5 94.9 95.5 94.1 91.1 92.0 90.4
2000 85.7 86.4 89.7 92.6 94.7 96.2 96.8 95.8 94.2 92.2 92.6 93.9
2001 90.2 90.5 89.4 94.9 96.4 95.6 93.9 93.3 92.2 92.0 92.2 90.2
2002 87.7 86.6 87.9 93.0 91.5 93.1 93.5 92.9 90.4 87.5 92.6 91.1
2003 87.2 87.4 90.5 94.1 95.8 94.7 94.0 95.0 93.1 92.4 93.6 93.0
2004 89.1 88.8 88.5 92.5 95.6 97.5 96.8 97.1 90.1 90.2 94.4 95.0
2005 91.3 90.6 90.8 92.8 94.2 97.1 94.2 92.7 83.6 81.3 89.3 89.4
2006 87.0 86.5 85.8 88.0 91.2 93.0 92.5 93.2 93.0 87.9 88.0 90.6
2007 88.2 84.7 87.1 88.1 89.7 88.5 91.2 90.8 88.9 87.4 88.9 88.7
2008 85.8 85.0 83.2 86.2 88.8 89.5 88.8 87.1 74.6 85.3 85.8 83.9
2009 82.3 81.5 81.5 82.7 84.0 86.0 84.2 84.1 84.9 81.5 81.1 81.3
2010 80.0 81.2 83.1 88.6 88.0 90.2 90.9 88.9 86.5 82.2 86.0 88.4
2011 84.9 79.8
If you look just above at the refining rate from February 2011, considering recent evidence demonstrating that the oil companies are not by any means HURTING for profit, it seems that it would be difficult to justify a reason why these companies should only be utilizing their refining capacity at a LOW that we have only seen for one month since 1987. That’s only the second time refining has seen the 70 percent range in the past 24 years.
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