johnnymysto

I only found one other post that had the words "gas", "price", and "fixing" in it, so I think this has yet to be discussed. Please correct me if I'm wrong.

Anyway, with ANY other product in the country, you can shop around for a better price, or a price you can afford. (A utility is not a product.) If I don't like Best Buy's prices on computers, I can look at CompUSA or Wal-Mart or Circuit City. Same goes for cars: if I don't like the price of a Honda Accord, I can check the price of a Nissan Sentra or a Chevy Cavalier.

You can't do this with gasoline!!! If Texaco has gas for 1.89/gallon, you can't go somewhere that's selling theirs for 1.49, or 1.29. The price of gas is fixed so no station can sell theirs below a certain minimum, which is still too high. Why is this allowed? Isn't price fixing illegal?

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Journeyman

A) I'll be the first to blame Bush.

B) 1.89? Hehehe, we're pushing 2.50 in Cali, but I imagine that it costs so much more to get gasoline from Texas to California on account of the high cost of bridge tolls or something.

C) It might also have to do with OPEC giving us the bird over Iraq and Afghanistan, but I know less about these things that I'm willing to let on.

Polyphobic

How gas prices are set is a complicated issue. A large percentage is based off of the price of crude oil. This price is heavily influenced by OPEC.
Here's a good article related to this issue

Money How Stuff Works.com

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The.Lunatic

You do realize that when gas prices climb the gas stations cut they're margins significantly. They're not going to sell gas for less than it costs them. They make pitiful percentages when the price is on the rise, the only time they really make money is when the price of gas goes down, because they drop their prices slowly and make up for all that lost money.

Gas costs what it costs that the bottom line drive less get a hybrid, but you're going to pay it because its essencial.

Gas will keep going up your whole life time. China is now getting cars because they're economy is doing good and thats driving gas up. Also wars in the middle east don't help to much.

Gas will continue to climb until it becomes to expensive to bear which is when energy alternatives will come into play.

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kutulu

From what I've read, the largest markup is from the refiners. One breakdown I saw about a year ago had the refiners making the most money off of gasoline.

Cynthetiq

so you mean to say that you go to Wal-Mart and they have differences in prices from one Wal-Mart store than the others? A company can set their prices as they see fit, and you have every right to go elsewhere unlike you stated in your last paragraph.

You don't have to go to Texaco, you can go to Mobil, BP, Union 76, Arco, and other options just as plentiful as any other retailer.

I bought gas yesterday that was .03 cheaper than the name brand competitor down the street.

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Spartak

It's standard oligopoly behaviour to charge the same (or similar) prices for the same product.

Oligopolies, unlike other firms, are concerned with individual market share. If one firm drops its price, it will capture a greater market share unless all others follow suit. Ofcourse the rogue firm potentially will be earning a lower profit, but thats ok in the short term until it captures enough market share (theoritically it could capture all of it). Now, if one firm raises its price, all other firms can either choose to raise their own prices and earn a greate profit, or leave their prices as they are an cannibalise the rogue firm's market share. Often these decisions hinge on what is better long term for each firm.

Anyway, while this may seem like "price fixing" it's not. Firms don't meet and discuss what prices to set, they simply react to what other firms do.

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iamnormal

It's not fixed. They are selling the gas as cheap as it can.
All gas Co. are run though the same system in the back end so there isn't going to be a big diffrents in prices from one Co. to another.

hilbert25

It is legal because even though Bush would like to hope they do, our laws do not apply to someone like OPEC. OPEC being a cartel can put prices wherever the hell they want, why? because they've got us by the beanbag. It doesn't help that all the soccer moms with SUV's just encourage them, when they put 60 gallons a week into their Excursions, guaranteeing a steady demand.

MSD

People are willing to pay what they're charging.

llama8

You're complaining about your fuel prices?

Try £4 a gallon in the UK which is about $7.20 at the current exchange rate.

We have a lot of tax on it though to thank.

aurigus

It's called market forces. Demand goes up, prices go up. Supply goes down, price goes up. And of course the inverse is true.

If people are so worried about the price about gasoline, they would support other energy sources so we don't have to depend on OPEC and outside countries for our source of oil.

They don't fix the price of gasoline, because that would be monopolistic, (and of course, our current administration is anti-monopoly) but I'm sure the major Gasoline companies don't mind when the price is higher. When it's higher, you can pad it a penny, and it seems like less than it would at 1.50 a gallon.

Redlemon

This is entirely correct, according to my contacts at bulk petroleum terminals (where the tanker trucks fill up).

Stud

I had heard a while ago that this is artificial like the energy shortages in Cali a few years back. Refineries have been shutdown to drive up prices. I would like to know more about this…but even so what can we do?

Cynthetiq

well, there's been a few refineries that blew up and are still being repaired.

More importantly all the green tree huggers didn't want people to build new ones.. so the demand went higher and there was not enough processing plants.

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Stud

Thanks for the info.

Are these the same tree huggers that drive SUV's to the rally's?

kutulu

There are enough refineries to process all the gas we need. There is no actual shortage going on. If there was, we'd have trouble getting gas. When was the last time you went to the gas station and they didn't have gas?

Another problem is all the different blends of gas. Sometimes 1 county uses different gas than the rest of the state, which in turn uses different gas then 3 other states. The epa needs to decide on one clear blend and stick with it.

Cynthetiq

sorry. no I don't believe it.

All the tree huggers said no more refineries, no more storage tanks.

so there's no place to stockpile gas for the consumer.

http://seattletimes.nwsource.com/htm...comment30.html

that's why the costs FLUCTUATES based on the demands put upon it during high usage times like summer.

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kutulu

People like you want to blame everything on environmentalists. Refineries make huge profits. All we ask is for them to make the investment into the future of the world by adding pollution control technology. Do you want us to be thought of as generation that cared more about making money than protecting the environment for future generations?

Here's a more simple solution. Ban all future sales of trucks, SUV's, and vans that are unable to achieve at least 20 mpg in EPA tests and all all other cars that get less than 30 mpg. It would save us a hell of a lot of fuel. All remaining inefficient vehicles can still operate, but there will be a small tax based on the estimated fuel efficiency of that vehicle and it's age that will increase each year to a pre-determined plateau.

If we replaced 1M vechicles that travel 20k miles/year and get 15 mpg with vehicles that get 20 mpg we'd save 333 million gallons of gas.

Cynthetiq

I don't disagree with that.. the CAFE standards are totally antiquated and UNACCEPTABLE. But based on the way the standards were crafted and the population growth of the cities, they were NEVER going to match ever, and now we pay the price for it.

No the environmentalists allowed for NO expansion of the refineries. No quarter was given, no consessions. Did they lobby the same for the automotive sector? Not with the same vigor.

Yes, it would take a long time to build a refinery that a dual pronged solution would allevitate the fuel commodity issues quickly and permanently.

kutulu

Both sides need to give a little. Perhaps if the energy industry acted in a more trusting manner things might be different.

What about strong arming the OPEC nations? How much of their food, clothing, computers, and other shit is exported from us and the rest of the world. If we said "Fine if you guys want to fuck us over and raise prices by slowing production, we're going to fuck you over on the prices of food, clothing, and everything else you fuckers import from us." Would it blow up in our faces?

Cynthetiq

Yes, both sides needed to give a little, actually in our scenario it's 3 groups.

I think that it would have back in the 70's... but now we have other resources that removed the stranglehold that OPEC did.

You know what I've not made my monthly call to my senators, Hillary and Schumer... I think that I need pick up the phone and call them and tell them that this is just unacceptable.

Redlemon

The funny thing is... right now, we (the United States) ARE an OPEC nation. And we will be until the end of June.

kutulu

Are you sure? On OPEC's web page it says the following:

http://www.opec.org (on the About OPEC button)

I guess OPEC countries account for less than half of our imports in 2002 (http://www.eia.doe.gov/neic/rankings/crudebycountry.htm) so levying large tarrifs probably wouldn't do so much. We've pretty much maxed out what we can get from Mexico and Canada (our #1 and 4 sources). Russia is the second largest exporter in the world, but they were only 15th on our list. All three of them are non-OPEC.

Redlemon

Yep. We are Iraq, and have their seat in the meetings.

kutulu

Oh, ok I see what you mean.

Cynthetiq

damn. i learn something new all the time

kutulu

no shit, huh? I had no idea that we were acting on behalf of Iraq in OPEC meetings. I bet OPEC must love that.

tehhappyboy

Ugh, 2.59 at last look. Good thing I bike.

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iamnormal

Cynthetiq and kutulu.
Can you two research the carbon cycle? How the use of hydrocarbons effects the carbon cycle? Then what that means for life on this planet?
Or is that too much for you too?

Cynthetiq

besides trolling with this "is that too much for you..."

yes, I understand the global warming etc.

But I will say to you... you are on a computer, that uses tons of resources that are pretty equal to emissions from vehicles. The electricity you use for the infrastructure to be on the internet creates emissions as well.

That said, I'm going to say to you that there are facts of life that happen to be. I need to have goods trucked to where I am. There are places in the world that I want to go see.

I drive a simple vehicle, it's a Plymouth Neon. While I wish it were different it is not. It gets good gas mileage, while not the best, it's better than the vehicle I had 10 years ago, which was also pretty spartan a Toyota Corolla.

I drive my car less than 8,000 miles a year. All the other time my car is parked and I take public transportation and walk everywhere else.

I will also gather that you walk everywhere you go, you don't buy ANY food or products that are trucked in from anywhere or flown in from anywhere. If you do, then your statement is duly noted as being hypocritical.

If you have something to add, then please add it.

H12

Besides crushing most any hope of an argument that iamnormal might have, I gotta agree with Cynthetiq with what he's said through-out the topic.

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iamnormal

I see you didn't learn anything. How you act and how I act dosn't matter. Its a globle thing that need to change in a globle way. The raising of gas prices is the start of it.

I'm not a tree hugger so no need to pull your soapbox out.

Cynthetiq

so again, I'm going to ask instead of being nebulous, please discuss it. I looked at all your posts here on the TFP and most of them are just single one line things like this quip.

I'm asking you to please educate me with what you have to bring to the table, not tell me "google it and if you can't figure it out you must just not get it." redlemon with just a couple more lines educated both kutulu and me on OPEC and it's members and how we are now controlling a seat there for the moment. I'm asking that you contribute in the same manner.

Now based on the small amount you did present back to us, you are correct it does not matter. What you or I do is insignificant. I travel frequently abroad and I know that we Americans have it good as far as prices of gasoline are concerned. My world for me? I have some interesting economic views, one of them, I'd love to see gasoline prices hit $5-$7/ gallon (I would also like to see DOW drop to 5,000) Why? Because all those speeders, SUVs, people cruising up and down the boulevards if they paid through the nose they'd not drive like that. When I lived in Singapore and it cost $50/tank to fill up a Toyota Corona, I thought thrice every time I wanted to go somewhere. Was all that cost going to the refineries and oil cartel? Nope most went to the government as taxes. The car itself was taxed 250% sales tax. Why? Because they wanted to discourage car ownership.

The government makes out like bandits as the price is climbing, because they get the 9/10s of a cent plus all the other taxes added onto the tank.

The only issue that I have is the instability of the prices. The prices flucuate waaaay too much for a commodity that should be very stable.

raeanna74

I know this is off topic but

I know a guy who worked on the line in Alaska. Did you know that we don't use the oil we get from up there? We export it- mostly to Russia. The oil is so impure, so full of junk, that it would take a lot of extra work to refine it and cost too much. So we export it and import more pure oil from elseware. I can only imagine what our refineries would be charging us if we were having to refine our own oil.

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Redlemon

Very interesting; I wonder if that is the case for all of the Alaskan oil, including the now-famous Arctic National Wildlife Refuge. Was ANWR oil ever intended to be used for the US?

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elfuq

To go back to the original poster, there's always the Arcos of this world, who manage to charge $0.15/gallon less than the national chains (at least here in SF) by refusing credit cards and providing no other services.

johnnymysto

Now that's what I'm talking about! What I meant in my original post is that between Texaco, Shell, Amoco, Racetrac, etc. you see about 3-5 cents difference and that's it. 15 cents less is a great start in the right direction. But it's still not to the point that I said originally - in other words, you don't find one company charging 1.99/gal, another charging 1.56/gal, another charging 1.32/gal, etc., etc., etc.

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Cynthetiq

there's no loss leaders for the gasoline.... the loss leaders are in the snacks and sodas.

johnnymysto

I don't know what you mean. School me, por favor

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