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?

 

[SteveR]

If you want to change gas prices, you have to actually lower your consumption. Not buying gas for a day does not lower your consumption. The oil companies will honestly never even know. The buried tanks that gas stations have in effect are a huge buffer, and since consumption would increase immediately before and immediately after that day, most gas stations would likely order the same amount of gas. This is a stupid idea, and was likely only put out as an e-mail forwarding gimmick for stupid people, much like the "Bill Gates will give you $250,000 if you forward this e-mail. Stupid.

If you want to change gas prices, you better boycott for greater period....like six months. Oh yeah, get at least 40% of the rest of the driving world to do the same thing. Another effect would likely be that the world economy would collapse due to the lack of productivity, but that is another story.

Also, given China's drastic increase in use of raw materials, oil included, fuel prices aren't going to go down, not in our lifetimes. They are likely to get much, much higher, it is simple supply and demand. Unless a massive source of energy is developed to replace fossil fuels, we won't be driving as much as we do now in 30 or 40 years. There just isn't enough oil to keep up with the current rate of increase in demand.

You'll get much more accomplished in the future if you start with a reasonable, well thought out plan.

 

[jarhead]

In a perverted sort of a way, it would be good for everyone once gasoline reaches a price of $5.00 a gallon in the U.S. (as it is in many places in the world now). The reason I say that, is that at $5.00 a gallon, the U.S. could shift its dependence on oil based gasoline, to gas made from coal, as Sasol does in South Africa, and now in China as well. Gasoline made from coal gasification is too expensive to attract investment in that viable energy source. No one would buy the stuff at $5.00 a gallon, when Arabian oil allows for $2.xx a gallon. People will buy $4.00 a gallon gasoline before they buy $5.00 a gallon Sasol. This is not a “Greed” issue. It simply is more expensive to produce gasoline from coal than from crude oil.

The U.S. has an estimated 1000 year’s supply of coal reserves. This initiative will take time to build the infrastructure to produce all we need, but it could totally eliminate the need for imported oil. Our own crude could supply what other products that we use from crude oil. But, this investment, like all others, is driven by the markets and what the costs are to make the investment, and the attendant risk for return on investment is perceived as being worth it..

I have no idea of what the environmental impact is, but it does not seem to have adversely affected the environment in Johannesburg

 

[jergar999]

A few other things to think about:

1. Oil companies make money when they sell bulk oil and gasoline to distributors/repackagers and not when you pump it in at the gas station.

2. Just because you don't buy gas one day will not change anything. If you do the same amount of driving, you will buy the same amount of gas regardless of which day or date you purchase it. The only way to make a difference is to buy a fuel efficient vehicle or drive less.

Now, if you copy this post and send it to 50 people, the fractional, airline, or corporate job of your choice will call within 15 minutes.

 

[photopilot]

My family owns an independant gas station. We opened it in 1983. The most we have ever made was five cents on the gallon, and that was the good ole days. Mostly the markup is 1-2 cents, and right now we are selling it at cost to keep up with the name brand conveniance stores. My dad has said several times that he wishes he could just stop selling it, it is more trouble than it is worth. Only thing is, if you don't sell gas then people will not come in for the other things. One thing in addition to the cost of gas from our suppliers that affects cost is regulatory compliance. A few years ago we had to dig up our tanks and replace them due to upgraded environmental rules. That cost a crapload. So before anyone starts bashing on the retailers, just keep in mind that a lot of us independants are struggling to keep our head above water right now.

 

[jarhead]

The U.S. is the Saudi Arabia of coal. Here are the top five nation's proven reserves of coal:

Reliable Enough for Baseload Operations

Many large countries contain significant proven reserves of coal. While data quality varies widely, the countries with the greatest estimated recoverable reserves of coal are --


United States 273 billion tons
Russia 173 billion tons
China 126 billion tons
India 93 billion tons
Australia 90 billion tons

 

[Gulfstream 200]

Im not going to drive a Fruckin Toyota Prius....

That Soccer biatch in her Excursion with the three kids yappin to her other SUV mom friends on the cell???... wouldn't even know she killed you in that tiny POS Prius..

Its just self defense man...mass wins....aint worth the 50 mpg to me.

Who gives a $hit what gas costs? anybody driving less? I seriously doubt it...

everyone says how great those hybrid $hitboxes are but everyone is still buying full size cars and trucks..and that will never change.

And thats too bad.


PS - I did get a kick out of John Kerry talking about reducing our dependency on oil...then hopping in his fleet of Suburbans to drive to the airport and get aboard his wifes GV. (she let him use it..)

 

[sstearns2]

Actually SUVs are significantly less safe than passenger cars. SUVs are concidered trucks and not designed to anywhere near the safety standards that are required of cars. An SUV may be safer in a headon with a Prius, but an SUV is less safe in the majority of accident types. You'd have to do something pretty violent to get the Prius to roll over.

Scott

 

[starchkr]

OK, here we go...I DID SOME MATH.


Costs of production per gallon are as follows...

$0.65 non-processing cost
$0.04 people costs (labor)
$0.08 distribution*
$0.10 processing costs (running the refineries)
---------------
TOTAL OF

$0.87 per gallon final costs to merchants.


lets add taxes...which are $0.40 (on the high side...including both federal and state) bringing 1 gallon to a whopping total of $1.27.

So maybe my friend was off a little with his .99 making profits. Tell you what though...just realize, when you pay $2 per gallon you will be paying the merchant a healthy $0.73 profit per gallon...more than 50% of what it costs the merchant to buy it themselves. OK, so maybe you say add in the costs of the merchants payroll and bills per gallon...so lets add$0.10 per gallon. Now the cost is $1.37, still $0.63 per gallon profit. Or maybe even add in $0.20 for payroll and stuff...still $0.53 pg..you get the point.

*distribution costs are total for the continental US

 

[starchkr]

A squared...

you are right, you do not get 1 gallon of gas for 1 gallon of crude.

You get many types of fuels from that same gallon of crude...some being:

GAS/LPG (aka-Burner fuel, Heating/cooking oil, petrochemicals), Gasoline, Jet fuel/Kerosene, Diesel and lubricants all from the distillation towers...now for the vacuum towers: Diesel, Heating oil, Asphalt, power generation and marine fuels.

Now any combination of the above can be made from the same gallon of crude in any amount forseen as needed by the refinery. It could be 50% gasoline 25%jet fuel and 25% LPG and so on... There are also some crudes that will produce some of these by-products better, such as light or heavy crude...which both have different values per gallon. So as you can see, the value of 1 gallon of crude varies, and will not be the same from barrel to barrel. You can get more expensive materials from that same gallon of crude.

 

[Ralgha]

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?

Where did I say all owners/drivers of SUVs were idiots? I didn't, you assumed that. I speak quite literally, I meant exactly what I said, nothing more.

My own definition of "idiot" in this case would be someone who has an SUV soley for the supposed "status symbol" and can not really afford it. Up to their eyebrows in debt so they can ride around in a giant car that makes them look good.

Someone who can really afford it is not an idiot. I made no comment about those people.

 

[414Flyer]

Did you include the cost of the gas the merchants pay? Its a heck of a lot more than 65 cents a gallon right now.

 

[dmspilot00]

Gas prices right now are the result of greedy merchants, nothing else.

That would mean that almost every single merchant in the United States would be collaborating with each other to fix their prices, which would be illegal. Most gas stations are independently owned. In fact, I know of two Shell stations right across the street from each other on an extremely busy highway next to an I-95 interchange, and their prices are always a cent or five different.

You've got to be kidding me to say that every single merchant is gouging its prices. It is not possible. The RETAIL gasoline market is NOT an oligopoly, but quite the contrary--it is almost perfectly competitive. To say they are all fixing prices would break the laws of Economics. Wholesale petroleum IS an oligopoly, so that has to be where the high prices come from.

 

[j41driver]

PS - I did get a kick out of John Kerry talking about reducing our dependency on oil...then hopping in his fleet of Suburbans to drive to the airport and get aboard his wifes GV. (she let him use it..)

She must have moved up! She used to have a G-II, N57HJ.

 

[starchkr]

414...you are right, it costs the merchants around $0.87 right now, not $0.65, that is the cost to the refineries before production. Then add in taxes....blah blah blah...same result as before.

 

[414Flyer]

No, you are still wrong.
From DOE.gov

2004 Jan Feb Mar Apr May Jun

Crude Oil
WTI - Cushing 34.31 34.68 36.74 36.75
Brent 31.28 30.86 33.63 33.59
Motor Gasoline
Conventional Regular
New York Harbor 99.84 104.73 109.13 111.95
U.S. Gulf Coast 98.39 102.70 108.98 114.89
Los Angeles 101.92 128.39 126.33 136.46
Rotterdam (ARA) 89.83 91.78 99.57 108.93
Singapore 105.55 94.95 105.11 104.89
Reformulated Regular
New York Harbor 100.02 104.31 108.37 114.80
U.S. Gulf Coast 100.06 103.59 110.61 114.73
Los Angeles 107.92 134.39 132.33 142.58

 

[A Squared]

A squared...

You can get more expensive materials from that same gallon of crude.

Right, like what? yeah there are some products which are more valuable, but the demand is very small so they are not produced in large quantities. example: lubricating oil, buck a quart for retail motor oil, but your car doesn't (or shouldn't) use as much motor oil as gasoline. That's why the refineries use more expensive techniques such as catalytic cracking to increase the yield of shorter molecule hydrocarbons such as gasoline. In general, the lighter the fraction, the higher the value. Gasoline is going to be one of the more valuable products from petroleum. Yeah, jet fuel is more expensive at the pump than gasoline, but that is due to taxes and handling requirements. It's really just Kerosene which is cheap compared to gasoline, it only gets expensive when you call it jet fuel. Propane is right around the same price as gasoline per gallon, which when you consider the more expensive handling and distribution, means that at the refinery it has less value than gasoline. Soooo, the point of all this is that if crude oil is a buck a gallon on the world market, and gasoline is the most valuable product produced in quantity, the price of the raw materials for gasoline are more than a buck a gallon.



Back to your original post, So a local merchant is selling gas at $1.40 a gallon? really, is he still doing it? now? today? How long has he been in business? If there was really all this magic profit to be made selling gas for 60 cents under what everyone else is selling it for, then why hasn't someone else done it? Ya think that the retailers who have been in the business a little more than a few weeks have figured out that over the long haul, you can't do that and make a profit. If there really is .60 cents a gallon of pure greed above and beyond a reasonable profit, then why doesn't some smart retailer start selling it for $1.70 a gallon? that's a reasonable profit *plus* 30 cents a gallon of pure greed, and people will be *flocking* to his pumps to buy gas at 30 cents a gallon below market price.

Or maybe, just maybe there's a little more to it than meets your eye.

 

[flyincheap]

Hmmm gas is still climbing!!

 

[jarhead]

OK, I did my part. I filled up my two cars, got my gas can for the lawn mowers filled, and I even topped off the 30 gallon tank in the boat. All on the 18th of May. Now I won't need to buy any gas on the 19th of May. Hope I helped out in reducing the pump price of gasoline.

 

[furloughfodder]

Speaking of high gas prices:

What is our genius President Dubbya doing to get this under check? He is practically in bed with the Crown Prince of Saudi and we are paying over $2.20 at the pumps?

Not to mention how this is killing all of us in the airline industry…

 

[EagleRJ]

Speaking of high gas prices:

What is our genius President Dubbya doing to get this under check? He is practically in bed with the Crown Prince of Saudi and we are paying over $2.20 at the pumps?

Not to mention how this is killing all of us in the airline industry…

You're right- It's all President Bush's fault. If Clinton was still in office, we'd still be paying $0.85/gal.