gas should be 95c a gallon right now
OhioGuy
calculations. Based on the current prices refiners are paying, and
comparing it to what we were paying for gasoline a couple of months back
($1.39 around here), we should now be paying about 95 cents a gallon for
gas.
Instead, as the price for crude oil has fallen, and as a surplus of
crude oil builds, the price has actually GONE UP by about 50 cents.
Now correct me if I'm wrong, but I always thought that as the supply
increased, and the demand decreased, that the price also decreased.
That was what they taught us in macro and micro economics, anyway.
So why is the price slowly going up right now?
Chris Hill
Could have something to do with refinery maintenance. The cost of gas
is not just the cost of oil. Demand for gas is down, but equipment
still must be maintained and there are fixed costs that must be
covered.
clams_casino
It all depends where to take your starting points.
In 2007, oil averaged about $68/barrel where gas averaged about $2.80/gal
When oil shot up to $140/ barrel in 2008, gas shot up to about $4/gallon
- it should have been closer to $5.75/gallon to be consistent.
Point is, it's not a straight line comparison. A lot has to do with
demand, refinery costs / capacity and taxes.
rick++
In my city tax and distribution add around $0.70.
The pump price is a little below that now.
Dave Garland
> I was looking at the price of crude oil recently...
> Based on the current prices refiners are paying,
> and comparing it to what we were paying for gasoline
> a couple of months back ($1.39 around here), we
> should now be paying about 95 cents a gallon for gas.
The way taxes on gas work (they're mostly "per gallon" rather than a
percentage of the price), prices will not drop completely
proportionately. But that's not really the (whole) explanation.
Except when profit margins are thin and competition intense, there's
not really much relation between what the product costs to make, and
what they charge you. They charge as much as they can get away with.
Dave
George
Economic rules only apply if there is an honest market that isn't
influenced by speculators and others who have rigged the game for their
own gain.
Brian Elfert
>Wholesale unleaded gas is $1.25.
The question is why is the wholesale price of gasoline so high when the
input (crude oil) is so low?
Gas prices locally dropped to around $1.49 maybe eight weeks ago. Today's
price is $1.89, but the price of crude is about the same as 8 weeks ago.
Somebody is making more money at the expense of consumers.
clams_casino
Or the oil companies took a hit when the price dropped so far vs. the
price of oil.
While Exxon made a staggering amount of (total) pretax profit in 2007,
their net profit margin was only about 6% - rather poor for most industries.
In 2008, they improved that to about 9.5%, but even that is typically
below average.
McDonalds, for example, enjoys about 18% net profit margin.
m...@privacy.net
>Economic rules only apply if there is an honest market that isn't
>influenced by speculators and others who have rigged the game for their
>own gain.
DING DING DING!!
We have a winner!
Well said
Lou
"OhioGuy" <no...@none.net> wrote in message
news:gmpdlt$u01$1...@news.ett.com.ua...
Supply and demand rule, but you're talking about the price of crude oil. If
you're burning crude oil instead of refined gasoline, you're one up on the
rest of us.
According to the morning news, crude was about $40/bbl today. Since there
are 42 gallons in a barrel, that works out to a shade over 95 cents a gallon
for crude. I don't know how you think that translates into 95 cents a
gallon for gasoline. Your local supermarket probably marks up the stuff it
sells by somewhere around 100% (that is, if they buy it for one dollar, they
sell it for two bucks). Any reasonable allowance for the costs involved in
turning crude oil into gasoline would put the price at somewhere around
$1.90/gallon, before gas taxes. It was less than that before tax price
tonight when I filled up the tank, and my price included taxes.
Lou
"Dave Garland" <dave.g...@wizinfo.com> wrote in message
news:6dSdnXArr8VE0A3U...@posted.visi...
Absolutely. Pretty much the same thing I do, and everyone I know does, when
looking for a job, or for that matter, a raise.
Brian Elfert
>In 2008, they improved that to about 9.5%, but even that is typically
>below average.
>McDonalds, for example, enjoys about 18% net profit margin.
Unlike a lot of folks, I understand that oil companies actually make
relatively low profit margins. The profits in real dollars look high
because the revenue is also high.
My employer just three or four years made over a 25% profit margin and had
been even higher in years before that.
Nove...@aol.com
DECREASING trhe amount of gas they are putting out on the market.
They are ALL decreasing the amount they are putting on the market
because it is a CARTEL.
It's not a "free market" thing. The gas companies can CONTROL the
supply because they are a CARTEL.
I must admit I am surprised that prices came down so far, but they
are a cartel.
clams_casino
SJF
<josej...@ssnet.net> wrote in message
news:jtj1p4t50bhkh2mc2...@4ax.com...
> distrubuted to a gas station half a
> world away from where the oil came from? Regardless of where it is
> refined.
Good point!
Refineries are set up to produce several products from the crude --
gasoline, diesel, lubricants, asphalt, etc. The ratios of each can be
somewhat varied within a limited range The refined products go into
storage. Supply and demand for each of the refined products in storage,
rather than the supply and demand for crude, then dictates the price of the
product. There is a time lag in this process. Common case -- When the
demand for heating oil increases, more crude is refined resulting in excess
production of gasoline putting a downward pressure on its price. The
reverse situation, high relative demand for gasoline can similarly depress
the price of gasoline. These and other effects all have time lags.
SJF
SJF
"SJF" <no...@nowhere.com> wrote in message
news:Ttoll.244956$jv1....@en-nntp-09.dc1.easynews.com...
price of *heating oil.*