****Gasoline pricing explosion****

Hmm a lot this war for oil has done, except kill people and waste money.

Anywy not to get ia big debate, my sister was telling me that she did some research and she oudn out that the government threatened to cut off all funding for interstates to every state unless they complied and made the drinking age 21, because the feds can't tell the states what to make the drinking age. Just a lil fact about the interstates.

 

Oil and Gold have been flying up in price this year, Jabba; more than an 11% increase from 01/01. Still, I guess the honeymoon period of US-Saudi subsidised oil and cheap petroleum is over?

E_S

 

I'm sorry but when an oil company makes a PROFIT of 30 million I have some serious issues there. I believe this happened with Exxon. It could have been more I dont recall. but nevertheless it was a PROFIT. Meanwhile my heating bill...for a two bedroom apartment on the second floor was ...180 bucks!!! That is insanity. ANd its been a mild winter. And..AND...my damn heating company slapped on a tax of 1.59 because it was too warm!!! How the hell is that fair? Tell me?

 

I guess the honeymoon period of US-Saudi subsidised oil and cheap petroleum is over? In this case, it may be straight from the honeymoon to the bitter divorce.

 

Unfortunately, it's time to up this again.

 

Ahhhh....back from my self-imposed exile! (Actually, I've been horribly busy)

Well, demand for oil has gone up 44% since 2003 due to the expansion of China's economy, among other things. And given the tensions with Iran right now I don't think it's all due to price gouging. Some certainly is, but not all.

After all, in 1982 a comic book was 65 cents and a gallon of gas was about 75 cents. Now a comic book is 3 to 5 bucks...as much or more than a gallon of gas. Is Marvel gouging the comicbook market?

Then figure that in France gas is over $8 a gallon. (After the conversions to American) We ain't doin' too badly.

 

Yeah, but France has better public transportation than we do, overall, and less suburban sprawl.

 

Gas is $8/gallon in France by public policy, in order to encourage use of public transportation, purchase of more fuel-efficient vehicles, discouragement of driving in automotive-impaired cities like Paris. Consequently, and also given the fact that the country is largely nuclear powered, they're going to be in a better position than most countries to absorb the economic impact of high oil prices.

 

J-Rod

After all, in 1982 a comic book was 65 cents and a gallon of gas was about 75 cents. Now a comic book is 3 to 5 bucks...as much or more than a gallon of gas. Is Marvel gouging the comicbook market?

So if I hear you correctly...we can use comic books as gasoline now?

It seems like a Manhattan Project for a non-gasoline engine is long overdue.

 

The facts are that supplies aren't low and this inflation is due to speculation by traders coupled with record oil company profits....

...that tells you something.

If the Democrats take over the House in the Fall and drag these CEO's before Congress and make them testify under oath, then you'll see change.

When the GOP did it (and not under oath due to one Alaska Senator's opposition), gas prices fell quite remarkably during that time. But, the President isn't overly concerned about the price gouging going on at the pump.

The price of oil is well overinflated as the traders could trade a barrel at approximately 24 bucks and still make a nice profit. The fact that it is trading at 72+ bucks without corresponding shortages and simply based upon speculation tells you that the traders and companies are pushing it as far as they can.

 

Overinflated? Whatever. As long as we are willing to pay it, its the correct price. If we don't like the price, we need to stop buying gas; or buy less gas. Lets work on that.

 

Indeed. The oil companies are earning record profits by charging what the market will bear. It would be disastrous for oil companies to try to "help us out" by charging less. The one thing the United States doesn't need right now is an increase in demand brought about by artificially low prices.

Or haven't you been listening to the news: Dependence on foreign oil dictates our foreign policy. If the U.S. could cut its oil consumption in half we could bring our soldiers home from Iraq tomorrow.

 

I was driving in the car, flipping between the Air America station and Rush Limbaugh (I can usually only stomach about 15-30 minutes of each at a time, but it is interesting to hear the two different sides), and Rush was making an argument about the current gas prices, trying to make it seem like it was better than it should be.

He said that two years ago, gas cost about $1.85/gallon, but the price of oil was $37/barrel. Today, oil costs about $74/barrel, but the price of gas is only about $2.90. Since the cost of oil doubled, gas should cost closer to $3.70, and therefore the oil companies could make much greater profits.

However, Rush's reasoning is flawed. The price of oil is only one cost in producing a gallon of gas. There are fixed costs per gallon (such as for the energy to refine it, the overhead of the refinery, and so forth), not to mention the taxes (about $0.46/gallon on average in the US). So, let's do the math a bit.

Before taxes, a gallon two years ago would cost $1.39, and one today would cost about $2.44. That is an increase of about $1.05 per gallon. If we assume that the entire increase is a result of the higher oil prices, and that the effect of the oil price is linear, then we get that the overhead is approximately $0.34/gallon, and that the price of a gallon of gas should be approximately as follows:

p = price, t = tax, c = overhead costs, b = cost per barrel of oil.

t = $0.46
c = $0.34

p = c + t + ((2.1/74) * b) = $0.80 + 0.0284 * b

By that formula, when oil hits $80/barrel, the cost of gas should be about $3.07/gallon.

Of course, these numbers are just approximations based on a simplistic model.

Kimball Kinnison

 

That's a good start, Kimball, although I would argue that the overhead cost of refining likely increases with the price of crude as many of those inputs are influenced by oil costs as well.

Also, demand for gas is notoriously downward sticky. With a normal product, higher prices mean less demand. But with gas, it's hard for people to reduce consumption in the short term. The seller's market might tend to magnify the pump price increase per dollar increase in crude oil/barrel.

The situation is as interesting now as it has ever been. Oil imports have dropped over the past 8-9 weeks or so, and it was announced yesterday that petroleum inventories are at 5-year lows. The runup in oil prices has coincided with the drop in oil imports. What does that suggest?

supply/demand scenario 1) U.S. refineries are buying less crude in the face of higher prices caused by regional instability, and are allowing petroleum inventories to draw down on the other end.

supply/demand scenario 2) U.S. refineries are having trouble sourcing light sweet crude, and that has caused the bid-up in oil prices, the drop in imports, and the drop in petroleum inventories

supply/demand scenario 3) U.S. refineries are producing flat out but still can't keep up with demand because of capacity bottlenecks, causing the drawdown in petroleum inventories (then why the drop in crude imports?)

 

I am doing my part to reduce my gas consumption. I took my Honda Elite 80 (scooter) to a mechanic and had him spend some time getting it running again. (I had neglected it horribly) I filled it up with a gallon of gas and I will be good for the next 60 miles (about a week)

The only way things will change is if we make those changes. We need to lobby our cities for better public transportation and then use it. We need to utilize less fuels in our vehicles by car pooling or making fewer trips (i.e. shopping for groceries a week or two at a time rather than every couple of days) We can walk, bicycle more or drive more fuel efficient vehicles. I am amazed by the number of people in my area that buy 4 wheel drive vehicles "for the snow" although we maybe have only a few days a year that would receive enough snow to matter. (front wheel cars with good tires and a reduction in speed do great on slick roads)

We as the consumer need to make the changes not whine that the oil companies that they are making too much profit. As I believe Lemminglord said it is supply and demand and we are willing to keep paying the prices so they keep charging them. Why do we want the government to do something? They make money off of gasoline in the form of taxes do you really think they are going to want us to reduce our usage that much? We need to do it ourselves. Look at most of Europe, they drive small economic cars, ride buses, bicycle, and walk I believe many of them are healthier because they get more exercise walking around. Over here I get up in the morning and DRIVE to the gym to work out and then DRIVE to work. I could do a lot more to lessen the amount of gas I use on a daily basis.

 

One thing's for sure. Industrial civilization doesn't need personal motorized transportation to survive. In ten years, owning a car will be a luxury. In twenty years, owning a car will be a crime.

 

Why?

Nope. Exxon's made hundreds of millions of dollars. They'd probably laugh at 30.

If there isn't a profit, a company will not keep doing business, then you wouldn't have gas at all (but as long as they don't get a doggone PROFIT).

Then don't use as much. It's not like the energy company is forcing you to use their product.

Heating companies don't "slap taxes" onto your bill, the government does. And, as with most government actions, I agree with you that it wasn't fair.

It does, however, seem that you lack basic knowledge of why gas is so expensive. So...

(Thanks to Rush Limbaugh)

In 2004 average cost of a barrel of crude oil: $37. 2004 average cost of a gallon of gasoline at the pump: $1.85. Cost of crude oil as a percentage of the total: 47%. This means that the crude oil cost came to 87 cents per gallon of gasoline.

So if $1.85 a gallon and 87 cents is the crude oil cost, then what else is there? Well, you're going to have all kinds of things in there -- taxes, state and local, federal, whatever, are the biggest chunk of them. You get marketing costs and you're also going to have distribution costs, but that all goes in there. So those are the numbers from '04: $37 dollar barrel of oil, $1.85 price at the pump, 47% of the pump price is the cost of crude oil.

Let's go to 2005: "average cost of a barrel of crude oil (last 6 months of the year): $65. 2005 average cost of a gallon gasoline at the pump: $2.50 - $3.00. Cost of crude oil as a percentage of the total: about 55% (which means oil companies get less money).

The cost of crude increased by $28. $28 is an increase of 76% over 2004. This means that the cost of crude alone added .66 to the cost of a gallon of gasoline. Therefore: This one factor alone would have raised the cost per gallon of gasoline to $2.55 without factoring in any resulting increase in taxes. So just the increased cost of crude from $37 to $65 raised the price at the pump from $1.85 to $2.55, and we're at $2.78 now, average price around the country -- and that's before you throw in the taxes and before you throw in all the other distribution costs.

This $2.55, which is the 2005 price just based on the increase in the price per barrel of crude from 2004 to 2005, without factoring in any resulting increase in taxes -- which, by the way, are at an average of 23% of the cost per gallon. So taxes are 23%. That would have risen from 42 cents to 58 cents. That's an increase of 16 cents. So that puts $2.55 and 16 that puts us to $2.71 a gallon in 2005. Refining costs, there was a hurricane, remember, transportation costs, the delivery trucks had to buy diesel at higher prices, too. So by the time you finish these calculations with all these factors weighed in the average price of a gallon of gasoline in 2005 ought to have been somewhere between 2.75 and three bucks, which is exactly where it was.

Nowhere in these calculations do I find the category under "gouging" or "price-fixing." Now, you can say there might be games being played with the price of crude, but on that one you've got to call OPEC. You've got to call old Mahmoud Ahmadinejad. You've got to call the Saudis. You don't call Lee Raymond at Exxon.

 

Ya think?

I haven't seen anything that would lead me to that conclusion...

Tell me more. What currend trends support the possibility that car ownership will be illegal in 20 years?

I would love to see everyone trade in their vehicles for the smallest most efficient one they need; but I don't see any legal precedent for forcing someone to this decision or to enforce a "no cars" law.

 

I was being facetious. There won't be any need to make car ownership illegal if it is priced out of the range of 80-90% of consumers.

 

New Gasoline Study Shows Profits, Not Crude Oil Prices Or Ethanol, Are Driving Pump Price Spike

 

First and foremost, WE VOTE with our Wallets!!!
I know some of you are tired of seeing these...but I think we all need to write our senators, our representatives, and the president.

[image=http://i3.tinypic.com/w0lz89.jpg]
Use a Bike-Car and you won't need any fossil fuel

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Ditto for a push mower

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Use BioFuels, like Hemp, and we can almost completely end our need for foriegn fuels

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Use Electric Commuter Cars, and Solar Panel (Home) Roof tiles and we will decrease our energy use in general

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Ahhh, the Moped! the First HYBRID!!! It gets around 100 miles to the gallon.

 

I don't think we need to write to our reprsentatives on this matter; seems simple enough to me... We buy these kinds of vehicles. We set up a plan to reduce our own energy expenditures. We put that money into better things that are better for our indepedence as individuals and the nations's dependence.

 

Well, if supply and demand are factors in gas pricing (and they are) perhaps they aren't charging enough on the east coast.

 

I don't drive all that much because I live so close to campus but I went to Walmart and saw gas here was at 2.49 and it made me angry, but not as angry as when it snowed 7 inches this past Monday. Why I choose to go to school in the coldest campus in the world is beyond me.