gas prices.

[The_Stache]

Ok just to start this is the last time im going to post in a gas related thread (I hope). So forgive me if this is long winded.

I'll start with the misconceptions as others have.

#1 - the world is running out of crude oil. False, this has been proven over and over and over, and yes OVER. Canada alone has enough crude oil to support the USA for over 100 years, its just EXPENSIVE to get to so therefore prohibitive until cheaper methods of attainment (middle ease/ brazil/ ect..) are exhausted.

#1.b - there is no more easily attainable crude oil. FALSE, there is almost as much oil as the middle east has, readily available to the USA, but the environmentalists and the government contingent has refused to drill it for 2 major reasons. The enviro nuts dont want to screw up the ecosystems AND the govenment is using that as a hedge fund against middle east collapse. Basically lets use thier resources first then ours(yes this is and has been the us's policy since the 70's rationing).

#2 - supply cannot keep up with demand. CORRECT, BUT the reason is not crude, its the refining process that produces gasoline. The government (specifically californias great conservative and influential attitude) has made building new refineries sooooo stringent and expensive that gas companies basically refuse to build new ones and just update old refineries to match standards. If 20 new refineries where buildt tommorrow gas prices would probably drop by almost half, but since oil companies are about profits and not consumer relations (becuase demand in america is seen as not want based but NEED based) they refuse to spend the billions of dollars of profits to build new refineries.

#3 - The middle east has it out for us americans and thats why they pay .45/gal and we pay 4+/gal. False, the middle east is just providing a resource. The demand at thier end is just rising and they are pricing accoringly, as already stated, US demand is not increasing, THE WORLDS demand is. China and the rest of asia's demand is on the rise. Thats quite a chunk of the worlds population and the middle east is just responding by rising prices becuase they have more customers demanding more from them. Also a resource is always cheapest at its source, check out the markup on diamonds or silca or grain. The closer you get to its source the less markup there is. If you dont beleive me go read about the crusades and the real reason behind them (salt).

Finally the conclusions.

As Americans we are spoiled, plain and simple. We have used our independance on oil (yes we are independant) to force lower prices from the middle east and other sources for the last 30 years, and becuase we where the one and only major country with a backstock of oil, and the oil producers know it. But now we are just another customer in a crowded shop and we pay what the others pay due to increased worldly demand AND ITS STILL CHEAPER THAN DIGGING INTO OUR RESERVES.

As consumers we always blame the retailers, but in reality we need to blame ourselves. We have come to expect the (percieved) needed items in life at the cheapest possible price (thanks walmart), yet fail to recognize economics when it slaps us in the face. The best way to combat this is to alter our lifestyle. Now that could mean anything for anyone, there are always solutions(carpooling, alternative fuels, telecommute, move closer to work, ect..). IF you enjoy driving or using gas soooo much that you absolutly have to drive and refuse to change your habits, you have to accept the price of gas, you have to pay to play. Consumers in this situation (namely me) have NO right to bitch about pricing, becuase you accept that price for the enjoyment that is NOT a requirement for daily living.

As a collective whole, consumers are still buying gas, that means the price has not reached a point where the majority of the population is drastically changing thier habits. Until that point occurs the price will continue to increase.

My final thoughts. If you read nothing else read the following.

GAS IS NOT A REQUIREMENT FOR LIVING, IT'S A LUXURY. UNTIL YOU START TREATING IT AS SUCH YOU WILL CONTINUE TO BE UPSET OVER SOMETHING YOU HAVE CONTROL OVER, BUT REFUSE TO EXERCISE THAT CONTROL.

[stovt001]

Oh my God, gtahvit, I hate to be this blunt, but saying the gas station owners are gouging is by far the most incorrect statement someone could possibly make concerning gas prices. Most gas stations make a few cents profit per gallon at best. Often they actually lose money selling gas, and just use it as a loss leader to get people into the convenience store. They make their profits on the food, drinks, and auto-services. Gas prices follow crude prices, but usually lag a little bit. Every gas station will try to keep prices down as long as possible, because raising your price first means no one will come to you. They'll hold out until the increasing losses force their hand, then they'll raise their price. Please, please don't insult the people taking losses just so you can get cheap gas. Those kinds of ignorant statements are just plain rude and inconsiderate.

As far as record profits at the gas companies, the absolute size of their profits go along with the absolute size of the companies. They are the largest companies in the world, and their profits are actually disproportionately small for their size. What I mean is they actually have razor thin profit margins, but due to the quantities they deal with those margins go farther. They make about an 8% profit margin, whereas Google makes about 25% profit margins. Do you really expect them to intentionally take a loss just so you can get cheap gas? What gives you that right? That's the problem with most Americans. They expect everyone else to take a hit just so we can get the artificially cheap energy we "deserve". Give me a break. And there is nothing stopping you from getting a share of those huge profits. Just go buy stock in the gas companies. However, given their low margins you might be better off investing in companies that have far higher margins.

[Kyle2k]

Stovt001, I have a question for you since you seem to be the "economist" of the bunch. If it is a supply and demand economy, how come it only seems to be driven by demand? Why don't companies want to make more supply? Is it because it makes them so much money? Couldn't be...If we or no one has control of how companies react to a need to up the supply? Who does?

If i was a greedy son of a bitch making more in a day than most people do in a year I wouldn't try increase supply either( not that they wouldn't even if gas was $2 a gallon). Your argument can make sense, but that doesn't mean it is "right". Especially for people in different situations than your own.

[chadrcr]

QUOTE=stovt001;72308]
#1 -[Oh my God, gtahvit, I hate to be this blunt, but saying the gas station owners are gouging is by far the most incorrect statement someone could possibly make concerning gas prices.........
Please, please don't insult the people taking losses just so you can get cheap gas. Those kinds of ignorant statements are just plain rude and inconsiderate.

#2 -As far as record profits at the gas companies, the absolute size of their profits go along with the absolute size of the companies........
Do you really expect them to intentionally take a loss just so you can get cheap gas? What gives you that right? That's the problem with most Americans......[/QUOTE]

#1. rude. stovt001 you may be an expert, on rude....
There are some stations that are charging 25 cents more per gal, right across the street from others, and some people are dumb enuff to buy their gas there, you probably do since you like gas costing double what it did a couple years ago.

#2. How about somewhere in between record profits and them taking a loss, it does not have to be all or nothing.

#3. Just because someone disagrees with you does not mean they are ignorant, but it does make you inconsiderate.

[GSX]

Originally Posted by diarmadhi

[/U]
GAS IS NOT A REQUIREMENT FOR LIVING, IT'S A LUXURY. UNTIL YOU START TREATING IT AS SUCH YOU WILL CONTINUE TO BE UPSET OVER SOMETHING YOU HAVE CONTROL OVER, BUT REFUSE TO EXERCISE THAT CONTROL.

Um... what about areas where public transit does not work?

[Mr. Wyndham]

Gas is as much a necesity as water, or air at this point. Let the US for one day stop using gas; and see what happens.

Yes we've had it good here in the US. But you can't expect the country to suddenly shift without warning. Usually, when you do something like that on such a massive scale; it takes time. Not to mention that we've built our lives, and economy around cheap fuel...if gas/deisel goes beyond $7/8 a gallon, we're in for it. A "recession" couldn't begin to describe what will happen to our economy if fuel gets too expensive.

I won't comment about price gouging...suffice it to say, when I look at the world picture, and I don't see countries in Europe (for example) experiencing 200% increases in fuel costs, something seems out of place......(though below helps explain a part of it)

A prime component in this whole gas crunch thing that very few people realize/remember/whatever is the value of the US dollar. In case nobody's noticed...it's dropped; SIGNIFICANTLY. If you only look at the Canada/US exchange rate, we've experienced a 33% drop in buying power. That includes Fuel. But some claim that the drop in value has benifited other sectors of the economy, contributing to the well-being of the economy as a whole. I'm no economist, so I couldn't tell you what those sectors are.

Finally...sure, we have to actually do something to cope, besides bitch and moan - yes; certain soccor moms with certian massive SUVs could easily buy a midsize car and call it a day - and yes; overreacting and blaming the oil companies/middle east is to be expected. But the last thing I would ever want to see or hear anybody do, is to just lay down and take it. Let things "work themselves out."

Newsflash: That isn't going to happen. I encourage everyone here to go out an read something written by someone with an opposing viewpoint to your own. I want you to question your own opinions on the subject, and see if they hold up to what your reading. In short: I want you to see BOTH sides of the story, and try to understand them. Only then do I believe anybody has a right to put somone else's opinons down.

Finally, please maintain the I know all of our members can give to one another. No name calling or insults. Thank you.

[chadrcr]

Once again, Dragoneye arrives, as a voice of reason....

[Shadowsong]

You know what the REAL problem is?

Environmentalists.

We have MORE than enough oil to supply our gas needs up in Alaska, hell gas prices would probly be be below $2 if we would drill in Alaska and use 100% of our oil (as opposed to the current 30% ours 70% OPEC's) but do you know why we don't?

Environmentalists were concerned we would disrupt the caribou.

Something to chew on.

[Kyle2k]

Originally Posted by Shadowsong

You know what the REAL problem is?

Environmentalists.

We have MORE than enough oil to supply our gas needs up in Alaska, hell gas prices would probly be be below $2 if we would drill in Alaska and use 100% of our oil (as opposed to the current 30% ours 70% OPEC's) but do you know why we don't?

Environmentalists were concerned we would disrupt the caribou.

Something to chew on.

The REAL problem is- drilling more oil is completely irrelevant because we don't have any places to refine it so it won't effect prices. Jumping on the slippery slope if fun, especially when everyone is doing it, but you realize, however, that if you like to hunt or do anything outdoors you are probably an environmentalist in some way.

Just something to chew on.

[TAG UR IT]

So we build more refineries. ...which creates more jobs...which stimulates the economy. Hmmm....seems like a win/win situation, no?

[stovt001]

Originally Posted by chadrcr

#1 -Oh my God, gtahvit, I hate to be this blunt, but saying the gas station owners are gouging is by far the most incorrect statement someone could possibly make concerning gas prices.........
Please, please don't insult the people taking losses just so you can get cheap gas. Those kinds of ignorant statements are just plain rude and inconsiderate.

#2 -As far as record profits at the gas companies, the absolute size of their profits go along with the absolute size of the companies........
Do you really expect them to intentionally take a loss just so you can get cheap gas? What gives you that right? That's the problem with most Americans......

#1. rude. stovt001 you may be an expert, on rude....
There are some stations that are charging 25 cents more per gal, right across the street from others, and some people are dumb enuff to buy their gas there, you probably do since you like gas costing double what it did a couple years ago.

#2. How about somewhere in between record profits and them taking a loss, it does not have to be all or nothing.

#3. Just because someone disagrees with you does not mean they are ignorant, but it does make you inconsiderate.

Gas stations charging 25 cents more a gallon than others right across the street isn't the same thing as gouging. Its a poor business move, and I honestly don't know why anyone would go to the unless they have it in their heads that they must have that brand in their tank. I would say that's not gouging since there is a clearly cheaper alternative sitting right across the street. I'm saying on a whole its not right to say gas station owners gouge when I actually think they're the ones getting the worst of this whole thing. They have to fill up their own cars with that more expensive gas, they make little to no profit on selling it, and they often have to take a loss for a while waiting for someone else to raise their price to cover higher costs or else they'll lose business. They're in a very tough business situation providing a service that is quite necessary. While I think its incorrect to accuse the big oil companies of gouging, I don't think such accusations really bother them personally. However, for your hard working small business owner, it is personal and it can be offensive. I guess I just have a soft spot for small business people, but I hate to see them accused of something when they're feeling the same pain we are, if not more.

And yes, there can be a middle ground between record profits and no profits, but where is there a law saying you can't have record profits? Why should they intentionally limit prices? Again, its not their duty to bring you cheap gas. It is their duty to bring it to you at market price, and I have tried to demonstrate that the market price is actually correct. If that price brings record profits, great. That's more money to their stockholders (which any of us could be) or more money to expand operations. Either way, that's good for the economy and good for the people. Now if the stockholders do something stupid with those profits, like giving the execs exorbitant pay increases rather than reinvest them in supply, well then yeah, that isn't right, but it also isn't gouging either. But that's a whole other discussion right there (and something I'd probably agree with most of you on)...

Which brings me to someone saying the demand side has been justified, but not the supply. I think some other people covered this well but I'll restate what they said. It is practically illegal to drill oil in the US. We have supplies, but the government won't allow the oil companies to tap them. Canada has a large untapped supply, but it is very expensive (more expensive than other sources) to tap that oil. Our other non-OPEC suppliers are being nationalized by at an alarming rate, and their government can limit drilling, which they are. Finally OPEC can and is limiting its supply. All of these factors are outside the oil companies' control. Whether all these limits are right or not is again open to debate, and again I'd probably agree with your conclusions, but they're not the same thing as oil companies gouging.

Finally, I'll also repeat what someone else reminded us is a big factor here: the dollar. Oil is priced on the worldwide market in dollars, and when the dollar weakens, oil actually becomes cheaper to other countries and more expensive for us. This is why we're not seeing the same gas price increases abroad (at least partially. Taxes and other factors play a role) and why global demand is ramping up even more.

So do I think some shady/screwy things are going on? Yes. I just don't think they're gouging. The economics don't support that and as one Democratic Senator admitted, there is not one bit of evidence to support that. Instead of complaining about it though, I'm ignoring the doom and gloom and imagining the possibilities. As I stated in an earlier post, there is actually a lot to be gained from more expensive gas, if only we put our minds and efforts to realizing these possibilities. I'm tired of all America's negative focus lately. Times are tougher than they were in the past few years, but in the grand scheme of things we're still doing quite well, and we have great options. Lets talk about those.

[Mr. Wyndham]

Originally Posted by stovt001

Instead of complaining about it though, I'm ignoring the doom and gloom and imagining the possibilities. As I stated in an earlier post, there is actually a lot to be gained from more expensive gas, if only we put our minds and efforts to realizing these possibilities. I'm tired of all America's negative focus lately. Times are tougher than they were in the past few years, but in the grand scheme of things we're still doing quite well, and we have great options. Lets talk about those.

I'm up for that. What did you have in mind?

[stovt001]

Originally Posted by Dragoneye

A prime component in this whole gas crunch thing that very few people realize/remember/whatever is the value of the US dollar. In case nobody's noticed...it's dropped; SIGNIFICANTLY. If you only look at the Canada/US exchange rate, we've experienced a 33% drop in buying power. That includes Fuel. But some claim that the drop in value has benifited other sectors of the economy, contributing to the well-being of the economy as a whole. I'm no economist, so I couldn't tell you what those sectors are.

Well, good news there. While the weak dollar is hurting us in many ways, including gas prices, it is helping the auto companies and the auto industry in America. It is attractive now for American auto companies to build cars here and ship them abroad to say...Europe. Since they'll be cost valued in dollars, they'll appear very cheap to the Europeans, leading to increased demand. That's one reason GM's global demand is actually doing quite well right now (and keeping them afloat while the North American market sinks). It is also good for anyone in the manufacturing business because it is now cheaper to produce goods in America and ship them out. Have you noticed that a lot of foreign car companies are building more of their American market cars right here? Some of that has to do with building a favorable image with Americans and trade laws, but the weak dollar also helps, as foreign made goods shipped here are now more expensive. Its all a bit of a silver lining to an otherwise pretty dark cloud.

[Kyle2k]

Originally Posted by TAG UR IT

So we build more refineries. ...which creates more jobs...which stimulates the economy. Hmmm....seems like a win/win situation, no?

I am all for more refineries, the problem is, even if they started building them this year it would be 10 or more years before we would see a difference at the pump and the cost to build them would probably drive gas prices higher. Furthermore, companies won't be in a hurry and they'll make all the excuses everyone that supports them seem to make, which will cause delays that only help them- not the consumer. The reason: they have us right where they want us and they will take advantage of us as long as they can.

Not such a win, win now is it?