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Topic: Gas prices and Stupid people!

Scott Norwood
Film God

Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99

posted 08-09-2006 09:03 PM

I can't believe that people are complaining that oil is "too expensive."

Oil is a competitive market. If it is possible to extract, refine, distribute, and sell petroleum products at a significantly lower price than the going rate and still make a profit, then why is no one doing this?

Big (or little) Oil has every right to charge whatever it wants for its product. If they charge too much, they invite competition and encourage customers to find cheaper alternatives, neither of which is good for business.

If you don't like paying $3+/gallon of gasoline (I don't), then either buy a more efficient automobile (i.e. use less of it) or consider using alternative means of transportation.

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Jason Black
Phenomenal Film Handler

Posts: 1723
From: Myrtle Beach, SC, USA
Registered: Nov 2000

posted 08-09-2006 09:16 PM

Scott:

Your post begs the question...

Why haven't more fuel effecient technoligies succeeded in today's tight market?

After all, hydrogen fuel was discovered, what, 100 years ago?
Bio-fuels are available, but few exploit their benefits.

My feeling is that the oil industry has stymied those efforts in legislature via the use of lobbyists. But that's just my feeling..

I wish solar power and hydrogen power were better refined now.. but they aren't.. [Frown]

Until then... you'll NEVER convince me that, thru modern technologies, it isn't cheaper to explore for, exhume and refine oil.

Like Bobby said..when the bottom falls out this go round.. and it will, as ALL markets are cyclical, I hope that the CEO's and EXEC's of big oil have invested in other ventures to keep their wallets fat.. while workers are being laid off left and right...

Enron disaster anyone?

If you don't believe it, look at our own industry over the last 20 years alone!

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Tao Yue
Expert Film Handler

Posts: 209
From: Princeton, NJ
Registered: Apr 2001

posted 08-09-2006 10:17 PM

quote: Jason Black

Until then... you'll NEVER convince me that, thru modern technologies, it isn't cheaper to explore for, exhume and refine oil.

That's not how a competitive market works. Price of production is irrelevant to price of sale. Price of sale is driven by demand -- and if you can produce for less than that, the difference is profit.

Note that this does not mean that it is necessarily illogical for Saudi Arabia, say, not to be furiously drilling new wells. If you expect the price to be $90 in the near future, then you don't want to sell more of it at $80. If you drill too many wells and let the oil out too quickly, you may damage the field and lose more in the long run than you can gain in the short run (with appropriate interest-rate discounting).

And, of course, the cyclicality of the market is an excellent reason not to drill more wells and produce more oil.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 08-09-2006 10:23 PM

Some of this makes me think of our extremely screwed up health care medical industrial complex in the United States.

Oh yeah, the doctor and his hospital can charge what ever the hell they feel like gouging out of your back. Just go somewhere else. Try to find an alternative. Try to find an alternative to getting sick and needing some health care. Or better yet, don't you ever dare think about getting sick. Yeah, we'll "cure you." But then you'll be saddled with such debt you'll wish you died.

A certain responsibility falls upon certain industries to not price gouge the public to death. The health care industry absolutely is in such a position -much more so than the guys running the oil industry. All those industries can keep pursuing the position of making as much money as dumbassed idiots are willing to pay. But at some point those fuckers will push the entire economy into a horrible tailspin out of selfish greed.

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Joe Redifer
You need a beating today

Posts: 12859
From: Denver, Colorado
Registered: May 99

posted 08-09-2006 10:40 PM

Scott is right. We have absolutely no business whatsoever complaining about gas prices. We should be happy to pay whatever they charge like an obedient little society. We should complain about other things instead, like obese people.

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David Stambaugh
Film God

Posts: 4021
From: Eugene, Oregon
Registered: Jan 2002

posted 08-09-2006 10:40 PM

I picked the name Triad Hospitals Inc. out of the air (they're trying to build a new hospital here in Eugene so they're in the news a lot). According to their 2005 Annual Report, they had net income of $226M on revenues of $4.7B. That's less than 5% profit. Are they gouging their customers? Sounds like they're barely keeping their corporate head above water. Maybe other hospitals are a lot more efficient and make 50% profit. Can anyone cite an example like that?

Health care is expensive because the overall system we have (i.e. private insurance, Medicare, etc.) drives provider expenses through the roof. Not necessarily because people are being gouged.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 08-09-2006 10:40 PM

There is anohter player in the health care industry that is the cause of the whole price problem there..... insurance companies. (And probably to about the same extent, lawyers.)

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Greg Mueller
Phenomenal Film Handler

Posts: 1687
From: Port Gamble, WA
Registered: Jun 99

posted 08-09-2006 10:40 PM

quote: Mike Blakesley
If retail worked strictly by pricing according to what stuff cost to buy, most businesses would eventually fail. You must always price a product based on what it costs to replace it.

If you run a business please tell what the name of it is so I can stay away.

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Chris Hipp
Phenomenal Film Handler

Posts: 1462
From: Mesquite, Tx (east of Dallas)
Registered: Jul 2003

posted 08-09-2006 10:45 PM

quote: Scott Norwood
If you don't like paying $3+/gallon of gasoline (I don't), then either buy a more efficient automobile (i.e. use less of it) or consider using alternative means of transportation.

I agree with this, but it is not always that easy and buying a vehicle with better fuel efficiency is not always cheaper. Sure if you can afford a $50k hummer then it would be no problem to switch. For me gas would have to be above $12 per gallon to justify the expense of getting a new car.

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Matt Fields
Jedi Master Film Handler

Posts: 545
From: Ohio, United States
Registered: Jun 2005

posted 08-10-2006 08:07 AM

Prices are not picked out of a hat, or in closed door meetings. They represent an underlying reality. In the case of oil, there is more demand and a tighting supply. The price goes up. Duh.

There is no conspiracy.

All of the Oil CEO's and all the other higher ups could work for free and it might lower the price of a gallon by a penny or two.

Anyone realize the amount of taxes on a gallon of gas?

US gas taxes

Taxes are 45 cents a gallon in Ohio. The oil companies aren't screwing us. If an oil company is making 8 precent on 2.50 (that's the pre tax price around here) thats .20 cents.

The government takes over twice that much!

New bumper stickers are needed.

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Scott Norwood
Film God

Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99

posted 08-10-2006 08:56 AM

Jason -- my point was that high gas prices _will_ encourage the development of alternative fuels and more efficient cars. These technologies are expensive to develop and implement and aren't cost-effective when gas is cheap. If gas goes up to $5/gallon, these technologies may become cost-effective. At that point, people will buy them. Of course, if gas suddenly drops to $.50/gallon, people will start buying huge cars again.

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Lyle Romer
Phenomenal Film Handler

Posts: 1400
From: Davie, FL, USA
Registered: May 2002

posted 08-10-2006 11:12 AM

quote: Jason Black
After all, hydrogen fuel was discovered, what, 100 years ago?
Bio-fuels are available, but few exploit their benefits.

Hydrogen is not a SOURCE of energy on earth. Hydrogen must be produced. It does not exist in a well somewhere. In order to produce hydrogen, energy must be used. It must be extracted from water or fossil fuels. Neither method is cheap or efficient.

Biofuels also take energy (and fossil fuel based fertilizer) to produce. They aren't cheap to produce and there is a debate over whether or not there is actually a net energy gain from producing them.

If ethanol (or bio-diesel) could be produced cheaper than gas don't you think somebody would be producing it and selling it? There aren't any laws against producing it. The "Big Oil" companies can't stop production.

The only energy alternative that makes any sense right now is nuclear power. It is clean (when the waste is contained) and efficient. Electricity produced by nuclear power can be used to produce hydrogen fuel to power automobiles. You don't even need fancy and expensive fuel cells. Hydrogen internal combustion engines work just fine.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 08-10-2006 12:34 PM

quote: Greg Mueller
If you run a business please tell what the name of it is so I can stay away.

You can find it by looking at my profile. You'd probably be one of those people who would gripe about the prices, so no big loss. I must be doing something right -- I have been in the theatre business for 27 years and my family has had the same retail business (where I work in the daytime) for over 40 years. Both are doing just fine, thanks.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 08-10-2006 12:40 PM

quote: David Stambaugh
I picked the name Triad Hospitals Inc. out of the air (they're trying to build a new hospital here in Eugene so they're in the news a lot). According to their 2005 Annual Report, they had net income of $226M on revenues of $4.7B. That's less than 5% profit. Are they gouging their customers? Sounds like they're barely keeping their corporate head above water.

It only sounds like they're barely keeping their heads above water because all the different players in the health care food chain keep jacking up prices on what they charge each other. And I count those vulture lawyers who sue health care companies in with that mix of players.

And then they pass that jacked up cost along to the patient. If they have no insurance, tough shit. Pay up anyway until you go bankrupt. Then we'll stick Uncle Sam with the rest of the bill. Ultimately that's the real deal. Our health care industry is really one very stupid version of socialized medicine where a blank check from our government waits at the end of the line.

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Ron Yost
Master Film Handler

Posts: 344
From: Paso Robles, CA
Registered: Aug 2003

posted 08-10-2006 02:12 PM

I'm with Greg. [Big Grin]

Retail in the U.S. is, and has always been, a game of hide-the-pea. Retailers always whine that they just can't make it any other way. They sure couldn't make it as well, that I'd agree with. [Big Grin]

Remember the 'layers' of ever-increasing price stickers on slower-moving existing-stock goods in stores that were too lazy to remove them? Now, with barcodes, it's hidden. The shell game continues, tho.

There ARE a few (very few) decent retailers where one will find different prices on the same item. Usually, if it's carded on pegboard hooks, they'll put the higher-priced (newer) stock to the rear .. which means they have to go to the effort (labor cost to them) of removing the stock in front, first. These stores don't apply price increases to existing stock. They're pricing according to what they paid for it. These are the stores that deserve to be patronized. It CAN be done. [beer]

You retailers really should be grateful you're allowed to continue the shell game, IMHO.

Ron Yost

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