Posted on 05/08/2007 8:24:39 AM PDT by Sleeping Beauty
DETROIT — Gas prices have spiked to a record nationwide average of $3.07 per gallon, according to the Lundberg Survey of 7,000 stations nationwide.
The nationwide average for midgrade gas was $3.18, and premium was $3.28. Analysts blame the rise on higher consumption coupled with reduced output by American refineries; they also note that there are signs that rising pump prices may be peaking.
There is some discrepancy among the groups that track gas prices. Lundberg, an independent and well-respected market research company, said prices have reached a record. But the AAA Daily Fuel Gauge Report pegged the average U.S. price of gasoline at $3.03 per gallon on Monday morning, 3 cents short of the all-time high reached in September 2005, after Hurricane Katrina.
Meanwhile, crude oil futures are declining. They ended last week at $61.93 per barrel on the New York Mercantile Exchange, about $4.50 lower than their eight-month peak a week earlier. Retail prices generally lag the futures market, so consumers often end up paying more for gas as futures prices drop.
What this means to you: The end is probably not in sight for sticker shock at the pump.
That place will soon be here:
Here’s one in a crash (I can’t open it where I am now):
http://www.youtube.com/watch?v=ju6t-yyoU8s
Do your research as they get mixed reviews.
When the futures go up, I know I have just a few hours before I see the corresponding price increase at the pump
That depends on the state in which you live. Here in Wisconsin, we have a minimum mark-up law that mandates a near-instantaneous pass-along to the pump the moment prices increase at the pipeline stage (to the tune of 3% at the terminal and 9.18% over the current average terminal price at the pump) and, if the fuel is actually purchased by a station at a spiked price, the inability to pass along a decrease (the higher of that 9.18% over the current average terminal price or 6% over what the station paid) until that fuel is all used up.
There are a pair of caveats to that. First, by executive order of Governor Jim "Craps" Doyle (WEAC/ADM/Potawatomi-For Sale), gas mixed with ethanol is no longer subject to this. Second, under threat of state action first made by Craps when he was attorney general 7 years ago, stations near but not in the portion of southeast Wisconsin that has to use our very own special blend of Algore/Whitman Memorial RFG (shared with only Chicago) must base their prices not on the "good" gas that they can get but on the RFG force-fed to the Milwaukee area.
I read on another board that Nigerian rebels blew up another pipeline.
1) Not the way, but possibly the amount
2) Nope. I have 2 cars that both average over 30 mpg on the highway (a Taurus and a Camry). Both are almost fully depreciated, so I’m better off keeping them than selling and buying a newer car that gets 35-40 mpg, especially if it is horribly overpriced like a Civic or Corolla.
3) Not as short as I would like, but if we moved, one of us would have to drive further, so there would be no savings
4) Absolutely. Gas is considerably higher than it has been with oil at these levels. That money goes somewhere.
5) It’s not that simple. There are two limiting factors: oil production and refining capacity. Oil can be $5 a barrel, but if you can only refine 1 Mbpd and demand is 2 Mbpd, gas will be expensive. Oil is relatively tight in supply, but we’re eating more gas than ever and capacity is not increasing to match. On a tight refining capacity, that’s a recipe for high prices. The current problem can be solved 1 of 2 ways:
1) More capacity. In other words, more oil wells and specfically more refineries and more capacity at existing refineries. This is the solution the GOP tends to prefer.
2) Lower demand. In other words, improve efficiency so people use less. Some of this is through behavior such as combined trips and lower speeds, some is through more efficient vehicles and the like. This is the solution the Dems tend to prefer.
The way I see it, neither solution will work in and of itself. You can require improved efficiency, but it will take years for those vehicles to appear and even more for them to replace the existing fleet and see a difference in average fuel economy. Figure 5 years for the product cycle + 7 years (half of the average lifespan of vehicles) before you see significant impact. A solution that will provide benefits in 12 years really doesn’t help in the short term.
But does increased capacity solve the problem? It certainly would help sooner, but may simply delay consumers’ decisions to reduce demand (increase excess capacity) until later. Then the shock is worse. Can you imagine if, instead of nearly doubling HP with no change in fuel economy in many cars since the mid 90s, the manufacturers had kept HP constant and put the gains towards mpg?
To me, the answer is clearly a hybrid approach - lower demand for the long term and raise capacity. Raising refining capacity is the easy part. Lowering demand either requires mandated minimums or high gas prices.
Pick your poison.
Of course now we have a congress that does neither because they can’t see past their own narrow points of view. So in the end, we will lower demand - by driving prices so high we harm the economy.
I always chuckle when people throw a fit over an extra $100 a year to pay for school busing, because its too much, and then have to go buy a car for their kid because he can no longer ride the bus to school.
It’s true - the only reason to go for higher octane is if your car REQUIRES it (some really do need it, but those are rare) or your car is pinging or knocking badly. Even then the better thing is to cure the ping or knock rather than cover it up. That can be as simple as a tune-up. Even the nasty cases of carbon build-up can often be cured with a $5 can of Seafoam (that and Techron are the only things I recommend, and Seafoam is the best - even safe for your exhaust system). Use that stuff once or twice a year, keep your car well-maintained and regular should be all you’ll ever need.
Yes, I added Sta-bil when it was filled. Done it before and with the sta-bil it stays good for a long time (read that as over a year at least).
In my experience, though, a K&N is a nightmare for the downstream intake sensors. Keeping that IAC valve clean is a pain.
Startron it.
http://www.starbrite.com/whatsnew/STAR%20BRITE%20ethanol%20p3072D2.pdf
http://www.starbrite.com/whatsnew/2004%20BoatUS%20Ad%20(Startron).PDF
Good advice, though battery prices have come down dramatically and neither Toyota nor Ford has had to replace any from my sources. Honda only has had to under warranty for a few Insights. They’re also lasting much longer than anticipated (180k + miles).
But certainly stick with the non-hybrids if you do highway driving mostly. That non-hybrid Civic is a good choice, as would a Toyota Corolla or a Ford Focus. They’re all reliable and affordable, but the price varies wildly. You can get a new Focus for thousands less than a Civic around here ($10k vs 15.5k similarly equipped). So what if it gets 37 mpg instead of 41 mpg if you save $5500? You’d have to drive about 650k miles at today’s prices to make up that difference.
I moved. Now 4 miles from work as opposed to 40. In doing so, I gained at least 15 hours a week of time. That’s 780 hours a year, which works out more than a month of time every year that I no longer have to deal with traffic. Don’t mean to rub it in or anything, but it sure is nice. :-)
I didn’t think the global economy was that healthy. Europe is stagnant. So is Russia.
So we have Japan and Red China. China is the main problem but is their consumption increased enough to add 50% to the cost of gasoline over the course of just a few months??
I bought gasoline in Missouri back in January for $1.73 a gallon and it was well under the $2.00 a gallon mark for over a month.
If the gas was sold at that price, then over the next 3 months something has sprung a leak for the price to go to a record. Even after Katrina, there was not that much fluctuation. A lot of refinerys were down and some oil platforms were damaged.
There may be a slightly higher demand. But not enough to swing prices 50% in 6 weeks. I think the excuses are nothing more than covering for greed.
It sure has affected the way I drive. I ask myself now is this particular trip necessary. $3.19/gallon is too high.
Thanks, I fix mowers and 85% of my spring jobs are caused by bad fuel from improper winter storage.
Wal Mart is supposed to carry it; I’ll give them a look.
(((I think the excuses are nothing more than covering for greed.)))
If it’s a covering for greed then where is the money going.
Refineries are paying 64 dollars a barrel. From that they only get between 22 and 26 gallons of refined gasoline. they give it about a 25% mark up and sell it to jobbers who then give it 25% and sell it to retailers, who sell it to you, after city state and fed tax’s. If you want to blame somebody you have to start with OPEC.
She sure has a happy smile on her face.
This stuff appears to be better than Sta-Bil due to the fact it can actually “repair” the gas once it separates. It can be used “after the fact” also. I’ve only used it for a short time but the the guys on my boating forum highly recommend it. They should know what works. So I went with it myself.
Regards
The impressive -- but I'm even more impressed that you did the math!
-- SB
You know, dragnet, I think about that more than anything else. I also think about self-employed people who have to drive to do their jobs -- like handymen.
I have a girl friend who lives in Texas. She's a horse dentist and charges $35 to come to your ranch and clean your horses teeth. The thing is, people live 50 or more miles apart and sometimes it costs her more to drive there than she makes.
So, you know, it's hard to start raising prices on people, but that's what going to happen to all of us. The fuel costs are going to show up in all aspects of our lives.
Thanks for those links. I’ve bookmarked them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.