Im Tired Of Fuel Prices

[414Flyer]

No, they can not sell it for 99 cents right now and make a profit. The total taxes you pay at the pump amount to about 30-40 cents per gallon. (Federal, state, local). So of that 99 cents, he would be getting about 60-70 to cover his gas cost, employees, running the gas station, etc. You think that is profitable?

They wall have to be colluding, ever single one for your conspiracy to work. And then legal system has to be a part of it too, since they are sitting by letting the collusion happen.

Some states even have their own specific forumations of gas, which make their costs even higher.

Gas stations really do not make a lot of money on gas per gallon. They try to make up for it with volume, which is why you see a lot bigger stations now, and a lot of the mom and pops have gone under.

 

[CLCAP]

Hmm let's see....a barrel of crude oil goes for a little bit over $40.00 on the world market. Since a barrel equals 35 gallons - that's a little bit over $1.14 per gallon of crude. Then it has to be transported, processed in a refinery, transported again, and sold at a gas station (paying for their lease, salaries, bills and a profit of course). So whoever told you that they can sell gas for $0.99 was just yanking your chain - and I guess you fell for it.

I stand corrected - it's 35 imperial gallons which is 42 US gallons.

 

[jarhead]

Starchkr,

Let’s do this very simple. A barrel of oil is 40 gallons. Yes, 40 gallons, not 55 gallons as is a common mistaken belief held by many.

Crude oil right now on the world market is right at $40.00 a barrel, give or take a few pennies. That makes the cost of crude oil a dollar a gallon as it comes out of the ground. So, your idea that anyone can make a profit by selling gasoline to the consumer at 99 cent a gallon is pure fantasy. You can’t sell crude oil at .99 cents at a profit.

Also, it does not matter if you live in an area where U.S. crude comes out of the ground. Oil has a world price. Why would a drilling company sell its crude for less than they can get on the world market? Answer: they don’t.

Now, add the cost for transporting that crude oil to the refinery where it is processed into gas. Now add the cost and mark up for refining it to gas. Then add the cost of transporting again that refined product (gas) to the gas station. Then add the federal tax to every gallon which is now 9.5 cents a gallon, and then add the state tax on gas, which is different for every state. My state, Minnesota, adds 26 cents to each gallon at the pump. Now, look at all the additional costs we’ve added to that $1.00 gallon of crude oil. And we haven’t yet even put a margin of profit on the gallon for the retailer.
I’m really sorry that you think you don’t need math to figure these things out. That’s all you need. You need to question your merchant friend’s statements by examining the facts. If anyone is selling gas at 99 cents, they are not making anything. It’s a stunt, as was done here last week when a local radio station promoted gas for 2 hours at .79 cents. Nobody made any money. The radio station paid for the gas loss as a promotion stunt. As to why one station has 1.65 and down the block it’s 1.85. Dunno…..maybe it’s a gas war to drive the other out of business. Kind of like when airlines come into a market and offer real cheap fares. It’s to gain market share, and that costs money. Other times, like at Mills Fleet Farm, or other large discounters, they sell gas for less to get you into the store to buy other stuff. The gas is then a “loss leader”. Take some economic courses and you may learn about such things, rather than believe some total B.S. from a guy you know, that knows another guy, that………..

 

[jarhead]

One minor correction

A barrel of crude oil is 42 U.S. gallons, and not 40 as I stated above. The gist of the message remains the same.

 

[atpcliff]

Hi!

Here's an interesting fact about the cost of gas that most people don't know.

If U live at a location where there's a refinery, U pay MORE!

Here's why:

Let's say U live in Houston, for example, with refineries there. The next nearest location for refineries, is, say, New Orleans. Both of the refineries spend about the same to make the gas, but the NO refinery would have to add the cost of shipping the gas all the way to HOU. So, the HOU refineries can charge a few cents less per gallon that the NO would have to charge for their cost of making the gas and transporting it to HOU.

If U lived 1/2 way between HOU and NO, U will have cheaper gas than either HOU or NO. Since U R equidistant, both HOU and NO will have about the same cost to make the gas, and about the same cost to transport the gas, so those two refinineries compete on price for the people living 1/2 way.

Interesting, if U live next to a refinery, your gasoline costs more than if U live further away.

I'm really glad we have to pay such low prices at the pump. When gas gets to about $4/gal. U will see A LOT of people screaming and they will start the change their usage patterns.

Cliff
LRD

 

[weekendwarrior]

$1.65 or $1.85 is still high relative to older gas prices. There are many reasons why the price might be different. One could be that the guy selling for $1.65 has an existing supply he bought at a lower price, and has not yet raised his price, whereas the $1.85 guy might have just stocked up on gas at the higher price. It's possibly a combination of this, and a gas war, but the price won't go much lower than that, because he can't, without losing money.

I would agree that some business may raise the price because of the current market, which is understanding. Some choose not to, until they have to purchase at the higher price. The airport I used to fly out of did this exactly. Their price on gas was $1.90 a gallon. They had a very large tank, with gas purchased at a lower rate. I asked why the price was so much lower, when other airports close by were in the $2.50 range. They said it was due to their existing supply, purchased at the orginal price. Once they refuled, the price went up.

So, there may be an element of greed, but it is a capatilistic market. If the others are selling at a higher price because they have to, due to the amount they paid for the gas, the guy accross the street can raise his close to that price to take advantage of the situation.

 

[Ralgha]

If the prices keep going up, at some point all the idiots will stop driving their SUV road hogs. That will be a day of rejoicing.

 

[A Squared]

Math...who needs it...the merchant states he can sell it for .99 and profit. If this is so, then hey, there is your math right there.

You provide a perfect example of exactly why you do need math. Without math skills, you will be a gullible sap for any con-man with a bull$hit line like: "I can sell gas at 99 cents a gallon and make a profit"

One factor that Jarhead left out. You don't get a gallon of gasoline from a gallon of crude oil. I don't know what the yield is, but you can bet that it's less than 100%. This doesn't take anything away from Jarhead's point, in fact it reinforces it.

 

[jarhead]

Quote:

“OH, and yes they are all GREEDY. As is every other business owner in this land. If they were not greedy they would give their services away for cost only and not worry about profits and such.”

No No No. Nobody takes risk with their own capitol just to have a chance to “break even”. Where is the incentive to take risk, if you intend on being a non profit organization. You know, when I was having to hire baby sitters many years ago, this “Greed” you speak of was just as pervasive among 15 year old girls we would hire to sit for a few hours on a Saturday night, so Mrs. Jarhead and I could go out to dinner, or cards at friends house. I can’t recall the exact amount being charged in the mid 70’s, but assume it was $2.50 an hour. Now this was not a union scale, as there was not then, and there still is not, a baby sitter’s union. The market set the price. Every baby sitter charged the same. $2.50 an hour. How many girls do you think said, heck, I’ll do it for half that price. None. There was a tight supply, so all these gals could get the market price. When there were not enough neighborhood girls to meet the market demand for baby sitters, they could, and did, start asking for $4.00 an hour. There did become a limit, and that was on the demand side, vs. the supply side. When some baby sitters decided they’d like $5.00 an hour, people like me decided it was too much for our budget, and we stayed home, or took the little tyke with us. Eventually, baby sitters whose only income was from sitting and watching TV dried up, they started to solicit jobs for 2.50 an hour. That’s how it’s supposed to work, and does work.

Greed has got nothing to do with it. It’s all competition, and the laws of supply and demand.

 

[jarhead]

Ralgha

So if prices get high enough ALL the “idiots” will stop driving their SUV’s. What about those drivers of SUV’s who are not idiots? Will they stop driving them too? You know, like the government officials, the wealthy, the folks like Arnold Schwarzenegger, who owns 5 humvee’s. To many, the cost of gas does not matter, as it is insignificant to their income or resources.

I’d be careful of making universal social judgments on who should burn gas in what type of conveyance. I see from your profile, that you are involved in flight instruction, with a lot of light aircraft being flown by yourself. If I were to use your social line drawing, I could just as easily assert that if the price of gas goes high enough, maybe all these “idiots” will stop taking flying lessons and boring holes in the sky on sunny afternoons. Same shoe, different foot?