Posted on 04/03/2018 1:05:55 PM PDT by Red Badger
Always happens about this time of year. The oil companies sideline production/refineries etc. to go to summer blend. Usually eases up right after Memorial Day. Talk to EPA . . . .
Fuhgeddaboudit........Their ‘state of the art’ refineries are all broken.............Even Russia and China are bailing................
Even Venezuela’s Russian and Chinese sugar daddies are dumping the socialist hellhole:
https://www.freerepublic.com/focus/f-news/3644594/posts
So what does the government have to do with an immediate increase in consumer gas prices every time the oil futures rise, but a significant lag in cost adjustments when oil futures drop?
And some areas are forced to use ethanol gas only, which actually pollutes the groundwater more than just pure gasoline.
I give, what? But there are market forces that cause prices to go up and down as you described. Is your question somehow related to my post?
Yes. It would also be healthier for all of us.
Not especially, except for the fact you mentioned dissatisfaction with the oil companies.
I believe a lot of the public frustration revolves around the seemingly one-sided aspect of the supply-and-demand formula when it comes to gas prices.
A simple explanation would go a long way, IMO. But it’s always double-talk from TPTB.
Gas is cheap. This happens every year. It will go back down soon.
Gas always goes up during school breaks, holidays and summer. Just like chocolate prices go up every Easter.
This happens every year twice when it’s maintenance and fuel-blend switch time. Fairy tales have nothing to do with it.
“We should build more refineries, if THAT is the real problem”.....
They’re shipping it out of the country as fast as possible, give ‘em a break. Thus, we pay more for OUR gas, much like our medicines.
The gas retailer seeks to maximize his selling price. All sellers act somewhat in unison because they have the same benchmark, oil. Together that makes pricing seem coordinated. An economic maximum is that prices are “fast to go up and sticky (slow) to come down”. Gas isn’t the only item to exhibit that behavior. The retailer will quickly raise his prices in anticipation of demand and his replacement cost of gasoline. Do you insure your house for what it cost to originally build? Or what it cost to replace today? The retailer must replace his gas, so prices go up. If his replacement cost is going down then he tries to hold on to his gain.
The retailers can manipulate prices so readily because there are so few of them. The government has made it very expensive to operate a gas station so the barrier to entry is very high and competition is limited. We are lucky that convience stores look at gas as a way to drive store sales. The retail margin on gas is razor thin. Not every transaction but on the average.
Gas ranging 40 cents within a day from say 2.40 to 2.00 is retail arbitrage. That’s free market forces at work and insure we have supply. The fact that it averages 2.20 instead of 1.60 is the government.
This is the still the free USA and there is no collective ownership of gas as you imply when you say “OUR” gas. The owners sold their gas and shipped it out. You are of course free to buy gas and sell it overseas if you wish and become part of that mysterious elite class of Americans known as owners. It’s easy to do via the stock exchanges. You’ll get filthy rich right?
The lesson of shale should re-explain to even so called Freepers (many who seem to prefer government diktat) that profit is a good thing and that it will drive supply up until the excess profit is gone. Selling overseas helps assure profitability for the owners and makes them willing to invest.
It’s not a mystery and the opportunity to get rich is available to all to invest in oil and gas. Of course so is going broke. Or just complain about others who take the risk.
Thank you for the explanation.
However, despite your concise rundown of the market forces, the public still sees a retail price that goes up nearly instantaneously while remaining at a premium level after oil prices come down. That gives the appearance of price gouging.
Plus, voter suspicion of our institutions seems to be at an all time high. How long before the clamoring begins for even more regulation?
Despite their narrow profit margins, the oil and gasoline industry needs do a better job of addressing the situation; otherwise, it could very well be taken out of their hands.
I think the people have enough recent experience on government intervention on oil to know better. But if they don’t they will just relearn the painful lessons of governemt regulation.
There is not much to be done to address ignorance and superstition.
“when you say “OUR” gas”...
Saying “our gas” was not intended or about ownership, it meant produced her in the U.S.
Hope that clears it up for you.
Nope. “Our” is a possive pronoun. No other way to use it except to mean belonging to us. Doesn’t matter if it is produced in the USA the owners have eberight to get what they can. Being produced in the US doesn’t give it special status for protection so that it will be cheap. But if was “our” oil belonging to us then you could make a case for it.
Fake news. Gas prices doubled in the 2 months of Buttcrack Hussein’s regime. I saw regular gas go as high as $4.50/gal and was sure I was going to see $5. So now we’re whining about gas that is just touching $3/gal (unless you live in California, Hawaii, or one of the other loser states). WHATEVER.....
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