The $1.30 in crude oil is where the problem is. That is the price that keeps going up. Oil companies slow production, or at least say they do, to raise prices. During the summer when people are on the road a lot, the price of gas kept going up. When the travel season ended in October, prices dropped to $2.00 a gallon. Suddenly, they jumped back up right up around Thanksgiving and Christmas. It we weren't being gouged, then the price would stay constant instead of rising when people drive the most.
No soapbox, no Bush bashing because I have enough common sense to know he has nothing to do with it, just economics.
quote:Originally posted by NashBama:
The $1.30 in crude oil is where the problem is. That is the price that keeps going up. Oil companies slow production, or at least say they do, to raise prices. During the summer when people are on the road a lot, the price of gas kept going up. When the travel season ended in October, prices dropped to $2.00 a gallon. Suddenly, they jumped back up right up around Thanksgiving and Christmas. It we weren't being gouged, then the price would stay constant instead of rising when people drive the most.
No soapbox, no Bush bashing because I have enough common sense to know he has nothing to do with it, just economics.
Thank you NB. You seem to be one of the few on this thread without an agenda. So I'll discuss it with you.
You make a valid point. Oil companies do manipulate the price of gas according to driving habits. Historically they have been doing this for years. Even during the beloved Clinton years.
You're correct that could be considered gouging. My point was, overall the mark-up on their product is not out of line compared to other companies.So I'll ask this:
What do you think is a fair mark-up on gasoline?
Due to our depedence on gas, should the mark-up on gas be lower than other products?
After a fair mark-up is determined, should it be controlled by a third party(ie.the government) ?
I personally believe that is why gas prices are manipulated like they are. If prices were mark-up say 40% and left there constantly, they would run the risk of people driving less and thus selling less gas. This way people get used to it and think nothing of it.
While oil companies can cause small flucuations in prices, contrary to what some people believe, the global price of crude oil and the demand for gasoline are the main culprits behind high gas prices.
The more of a product people buy, the cheaper you can sell it. You're profit percentage may shrink, but overall profit increases. You used cokes as an example, so I'll do the same.
A 12 pack of coke sells for about $4.50 regular price. That's about $.37 per unit. A case of 24 goes for about $7, that's around $.29 per unit. The price per unit is $.08 cheaper per unit, but the profit margin is higher because you're buying twice as much product.
Oil companies sell huge quantities of oil every day. Yet, instead of the price coming down because of the huge amount of sales, the price goes up. It's like selling the 24 pack of cokes for $7 one day, then $7.25, $7.50, $8.00 and so on. The profit margin keeps growing and growing. At the same time, the common worker makes the same amount of money, yet the budget for gas increases. The cost of groceries and other transported goods goes up as well, making the budget even tighter.
The oil companies know how much the market can bear and they are pushing it as far as they possibly can with no regard for the customer, only their bottom line. This is why I think it's gouging. Oil companies are being irresponsible with their pricing. They can price gas lower and still make a huge profit, they've done it during lower trailing periods. However, when more people are expected on the road or something happens in the world related to oil or not, the price increases.
If people had a choice when it came to fuels, the price would be a lot lower. Competition keeps companies honest and oil companies have no competition
A 12 pack of coke sells for about $4.50 regular price. That's about $.37 per unit. A case of 24 goes for about $7, that's around $.29 per unit. The price per unit is $.08 cheaper per unit, but the profit margin is higher because you're buying twice as much product.
Oil companies sell huge quantities of oil every day. Yet, instead of the price coming down because of the huge amount of sales, the price goes up. It's like selling the 24 pack of cokes for $7 one day, then $7.25, $7.50, $8.00 and so on. The profit margin keeps growing and growing. At the same time, the common worker makes the same amount of money, yet the budget for gas increases. The cost of groceries and other transported goods goes up as well, making the budget even tighter.
The oil companies know how much the market can bear and they are pushing it as far as they possibly can with no regard for the customer, only their bottom line. This is why I think it's gouging. Oil companies are being irresponsible with their pricing. They can price gas lower and still make a huge profit, they've done it during lower trailing periods. However, when more people are expected on the road or something happens in the world related to oil or not, the price increases.
If people had a choice when it came to fuels, the price would be a lot lower. Competition keeps companies honest and oil companies have no competition
While I agree with you statement"oil companies have little regard for their customers, only their bottom line". I think the majority of large companies in this country are the same way. The reason people feel they're getting gouged by oil companies is that they have no choice, they have to have gas. That's the main reason the government likes to tax gas, they know they're gonna get some money.
While oil companies could sell gas for less, I'd guess that even if you remove all taxes and profit, at $60 a bbl. for crude, they would have to sell gas for $1.65-$1.75 per gallon just to break even. Anything lower than that and they would have to increse the price on whatever else they made out of that bbl. of oil. People would love them then, truck drivers and farmers probably wouldn't like it much because they would have to raise the price of other things such as diesel fuel to compensate.
Your right, until we ween ourselves off fossil fuels, without some kind of competition oil companies can do about what they want. I'm honestly surprised gas is not higher than it is.
While oil companies could sell gas for less, I'd guess that even if you remove all taxes and profit, at $60 a bbl. for crude, they would have to sell gas for $1.65-$1.75 per gallon just to break even. Anything lower than that and they would have to increse the price on whatever else they made out of that bbl. of oil. People would love them then, truck drivers and farmers probably wouldn't like it much because they would have to raise the price of other things such as diesel fuel to compensate.
Your right, until we ween ourselves off fossil fuels, without some kind of competition oil companies can do about what they want. I'm honestly surprised gas is not higher than it is.
Agreed with "... the majority of large companies in this country are the same way."
Agreed with "The reason people feel they're getting gouged by oil companies is that they have no choice..."
And, the AP news article by Jeff Donn indicates that BIG OIL has been closing refineries, and stockpiling unrefined oil hoping for (and obtaining) price increases.
That's price manipulation.
If I'm not mistaken, such is a violation of federal law.
Agreed with "The reason people feel they're getting gouged by oil companies is that they have no choice..."
And, the AP news article by Jeff Donn indicates that BIG OIL has been closing refineries, and stockpiling unrefined oil hoping for (and obtaining) price increases.
That's price manipulation.
If I'm not mistaken, such is a violation of federal law.
I wonder if alternate fuels are the answer, One reason is the law of supply and demand. I would refer you to this article: http://www.washingtonpost.com/wp-dyn/content/article/20....html?referrer=email
The story here is not about the Gouging of Americans, but the gouging of MEXICAN Corn Tortilla Consumers.
Increasing demand for corn to produce ethanol as an alternative to gasoline is driving the price of corn higher, and putting economic pressure on corn tortilla consumers.
Sounds ridiculous to think burning E 85 is taking food out of the mouths of Mexican Children, but it apparently does.
I wonder if this increased pressure on the Mexican economy will increase the pressure to migrate north for work in the USA?
The story here is not about the Gouging of Americans, but the gouging of MEXICAN Corn Tortilla Consumers.
Increasing demand for corn to produce ethanol as an alternative to gasoline is driving the price of corn higher, and putting economic pressure on corn tortilla consumers.
Sounds ridiculous to think burning E 85 is taking food out of the mouths of Mexican Children, but it apparently does.
I wonder if this increased pressure on the Mexican economy will increase the pressure to migrate north for work in the USA?
I think that "Big Oil" is gouging American consumers, with the complete co-operation of each and every member of both houses of congress, State and local legislative bodies and anybody else that can stick their fingers in this pie.
Let's face it WE rolled over on this one too. I kept buying gas and so did you. At times we would have paid almost any price to get it. I can blame myself for being so complacent.
Where was Hillary, Obama and all the rest of them? It hurt all of us and all of us let them hurt us, that's the bottom line.
Let's face it WE rolled over on this one too. I kept buying gas and so did you. At times we would have paid almost any price to get it. I can blame myself for being so complacent.
Where was Hillary, Obama and all the rest of them? It hurt all of us and all of us let them hurt us, that's the bottom line.
Unless I overlooked a comment in one of the post on this, the way the oil companies IS cheating (maybe not gouging) our country, is that Bush adm. has lifted the royalities that the oil companies are supposed to pay the government for the oil it gets from our public lands and in the Gulf. The system is set up to pay less royalities when oil is cheap to encourage more drilling (especilly in deep water) but as oil goes up, more royalities are supposed to be paid. THe Bush adm ha not enfourced them paying the additional money to our treasury. In other words , big oil is taking your oil from your land and not paying for it.
another thing that is causing the high price of oil, is Bush's little war in Iraq. Saddam was pumping around 3 million barrells per day. Now they are lucky to get 1.5 to 2 mill barrels. In addition, our army is using about 500000 barrells just to run the occupation, so that much in not on the market. Plus the additional cost to the shipping industry for operating in a war zone.
BTW, Last year CNN reported the cost of gas in Iraq is $0.66/gal, and we bombed all of their refinerys.
Don't you wish Bush would want to help our country is he is eager to help Iraq?
another thing that is causing the high price of oil, is Bush's little war in Iraq. Saddam was pumping around 3 million barrells per day. Now they are lucky to get 1.5 to 2 mill barrels. In addition, our army is using about 500000 barrells just to run the occupation, so that much in not on the market. Plus the additional cost to the shipping industry for operating in a war zone.
BTW, Last year CNN reported the cost of gas in Iraq is $0.66/gal, and we bombed all of their refinerys.
Don't you wish Bush would want to help our country is he is eager to help Iraq?