Posted on 01/20/2007 7:17:00 AM PST by Graybeard58
NEW YORK -- The headlines say oil prices have fallen 15 percent this year. Gas station receipts tell a different story -- the cost of filling 'er up has slipped from about $35 to $33. Big deal.
The cost will probably drop further, but drivers shouldn't hope for a big windfall at the pump: there's a lot more that goes into gasoline prices than the current cost of crude oil.
Besides taxes and the costs of refining, distributing and marketing, there are factors such as local competition among gas stations. Just as with other forms of retail, consumers see savings when one retailer lowers its price, and the others scramble to match it.
"If gasoline costs me a dollar a gallon, and my competition down the street is selling it for 89 cents, my customer doesn't care what I paid for it," said Richard Oneslager, president of Balmar Petroleum, which operates 14 gas stations in Colorado.
Crude oil prices have fallen from about $61 to $51 a barrel this year on the New York Mercantile Exchange, but the price of gasoline on the side of the road has declined more slowly. The average price for a gallon of regular is down about 13 cents from $2.33 on Jan. 1 to $2.20 on Friday, a day after crude briefly fell below $50.
A typical car holds 12 to 15 gallons, so if it's filled four times in a month, that's savings of less than $8 in a month -- not even enough for that daily cup of coffee.
Pump prices haven't plunged to $2 a gallon yet, which is where they were back in early 2005, when crude oil prices were also around $50 a barrel. The big difference was that, unlike now, crude oil wasn't coming off a record high of $78 a barrel just six months earlier.
Essentially, the recent price drop hasn't completely sunk in on the wholesale level, so gasoline retailers are still paying a lot for their product and won't lower prices until competition forces them to do so.
The Energy Department says the price of crude oil accounts for about half the retail price of gasoline. That means if crude oil is down 15 percent, pump prices should be down almost 8 percent.
But the time it takes for a drop in wholesale prices to fully affect retail prices is around 12 weeks, though most of the drop happens within the first two weeks.
"Retailers aren't making their price decisions on the price of crude oil," said John Eichenberger, vice president of government relations at the National Association of Convenience Stores. Instead, they focus on how much they paid for their current load of gasoline, and how much their supplier is telling them their next load will cost.
"We don't care about anything except what that tank the truck just brought in cost," Oneslager said.
A sharp rise in crude oil is another story. After crude spiked to record highs the past two summers, it didn't take much time for gasoline prices to follow suit. That's mainly because retailers got nervous that their next shipment of gasoline would cost a bundle, and also because they knew that summer demand is high and drivers could at least for a while pay inflated prices, albeit reluctantly.
The average gasoline retailers have to charge 13 cents per gallon more than they paid to break even, Eichenberg said, and mark it up even more to make a profit.
The Oil Price Information Service shows that in 2006, the average gross margin for retailers was 13.76 cents a gallon -- meaning profit was less than a cent per gallon. Because of credit card transaction fees, the credit card industry profited more from gasoline sales last year than gas stations did, Eichberger said.
IOW, saving $8 over a month's time won't buy a month's worth of daily coffee.
1.95 in Jersey? Really.
Yup. The dime cup left the house about 20 years ago.
All of these are qualitative definitions. They make no attempt to define quantitative limits.
But all of them are accurate, and all of them describe very real phenomena.
Answer his question.
Done
"All of these are qualitative definitions. They make no attempt to define quantitative limits."
Either a law is broken or it is not. What does a 'qualitative' definition mean?
Nobody's talking about laws being broken. At least not civil laws ...
What does a 'qualitative' definition mean?
One that is limited to a description of the NATURE of the item. If I say something is "big," it doesn't mean the same as if I say it is "100 feet high by 90 feet square at the base." The latter is quantitative; it assigns numbers to the object.
In your definitions, you didn't describe "stealing" as "appropriation of property belonging to someone else, said property's value in excess of $1."
"Gouging" is the same kind of offense. It means making inordinate profits by manipulating the market, or by exploiting an inflexible demand. If you were dying of thirst and someone had cornered the market on water so they could charge $50 a glass, they would be gouging you. Would they still be guilty if they charged you $49? How about $20? $10?
The offense isn't quantifiable, but it still exists.
By the way, the offense has nothing to do with your ability or willingness to pay the price demanded. If you were dying of thirst, $50 for a glass of water might seem reasonable, even if usurious.
I don't know about you but I call it gouging.
Shhhhhhhhhh. Haven't you heard? There's no such thing. Who are you going to believe, Common Sense or the lovable shills for the petro industry?
Mark
I hope those that voted for this dolt in Missouri are now happy.....Maybe she can give Patty Murry a run for money as the "Queen of Stupid" in D.C.
McCaskill has said so many incredibly stupid things over the years, it's to be expected. I guess that a bit more than half the voters in the state wanted someone who represented them... The incredibly stupid... Well, them AND the dead.
Mark
Due to the taxes in Kansas, gasoline prices tend to be 5 to 9 cents a gallon more than in Missouri. I know that my aunt drives across the state line just for buying gasoline in MO for that very reason. Granted, she doesn't live far from MO, but it hurts tax revenues in KS in border cities.
Mark
Hawaii might be relying on different gasoline refinery sources. That was reportedly the case in Guam, which I understood got its consumer gasoline from Singapore-based suppliers which weren't subject immediately to mainland U.S. demand spikes or refinery issues (Katrina, for example).
The price of gasoline in ANY STATE is far far more than 9 cents.. Government makes more money on taxes from "ENERGY" of ALL forms than the producers do.. FOR DOING LITERALLY NOTHING..
They want it both ways. They tell us the price of gas spikes immediately upon a crude price increase. But takes time to work through the system through a crude price decrease.
Can't have it both ways.
I'm in Carteret...Middlesex County
Low sales tax.
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