Film-Tech Forum ARCHIVE: Gas prices and Stupid people!

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Posted by Richard Hamilton (Member # 321) on 04-24-2006, 07:54 AM:

I just saw on CNN that people from Chicago were driving 25 to 30 miles to Hammond Indiana to get gas. The gas is .11 cents cheaper per gallon there. how does this add up? This can only be a savings of a couple dollars at most per fill up, which is less than 1 gallon of gas. It takes more gas to drive one way to the gas station than what they are "saving". Crazy!

Posted by Steve Scott (Member # 630) on 04-24-2006, 10:41 AM:

Try driving to Venezuela, it's about $1.17 there. [Smile]

Posted by Chad M Calpito (Member # 3736) on 04-24-2006, 11:06 AM:

I tend to agree with you Richard. Gas prices here in San Diego are generally between $3 to $3.40 a gallan, depending on the grade of gas. Of course, I always use the most expensive gas for my car since it is highly recommended. But, I'm not gonna drive all over town to find the best deal since it won't make that much of a difference.

Posted by Paul Mayer (Member # 355) on 04-24-2006, 01:13 PM:

At $2.71/gal my corner 7-11 Citgo was the cheapest in town last night. The 'Vegas average low price today is $2.79. Normally we're 10-15% higher than California so I figure we'll be over $3.00/gal for any grade in the next few days.

Needs to go higher yet from what I've seen of local driver behavior so far. Still way too many lead-footed giant truck and SUV drivers burning rubber at every green light. Road rage incidents are up all over the valley too, which at least provide free daily spectator events for us pedestrians. Driving around here is like being in a continuous episode of some weird "Cops Meets Bum Fights" hybrid. Haven't seen this many mullets and fists and beer bottles flying since the last NASCAR weekend in town.

Saw several TV news stories over the weekend talking about people starting to hock their crap to buy a tank of gas. All of the ones shown are still driving monster-sized vehicles for personal transportation. I love it! Always thought $4.00/gal gas would wake these morons up. But so far the $4.00+ prices seem to be only in well-heeled areas where they may whine, but in the end they just shrung their shoulders and fill up.

Maybe the rest of us will be seeing pretty close to $4.00 by mid-summer since $3.00 beat the Memorial Day arrival prediction by five weeks. Guess it'll take $5.00/gal to provoke some real changes around here. Can't happen soon enough for me - even though I may end up having to share the bus with crowds of crack/meth tweakers forced off the road in order to continue their habits.

Viva Las Vegas baby!

Posted by Richard Hamilton (Member # 321) on 04-24-2006, 01:17 PM:

quote: Paul Mayer
Haven't seen this many mullets and fists and beer bottles flying since the last NASCAR weekend in town.

Ha, or showest! [Big Grin]

Posted by Jeff Arellano (Member # 3249) on 04-24-2006, 01:18 PM:

Its become about 3.20-3.50 in Los Angeles. A few stations in more affluent areas (Beverly Hills) have gone over $4.

Posted by Paul Mayer (Member # 355) on 04-24-2006, 01:19 PM:

Ahem, at ShoWest we're much more sophisticated. We throw gin bottles. [Big Grin]

Posted by Adam Wilbert (Member # 1184) on 04-24-2006, 02:07 PM:

I had a guy in a hummer at the next pump over try and chat me up about the high price of gas while I was filling my 30mpg car a few days ago. I suggested that he "rethink the Hummer." I'm suprised I didn't get my ass kicked right then and there, but it shut him up. and I drove away with a big grin on my face. [Big Grin]

The high price of gas doesn't make me as mad as hearing that Exxon scored record profits last year and their CEO was given a 400 million retirement package. They also invested a paltry 10 million in alt fuel research. [fu]

Anyway, I've decided to keep track of my price-per-mile instead of my miles-per-gallon, since price has more of an impact on my life, and really puts driving habits and vehicle into the equation. It also helps visualize exactly how much going somewhere costs. This week my car runs $0.10 per mile. I'd be interested in knowing what everyone else's PPM is.

Posted by Bobby Henderson (Member # 840) on 04-24-2006, 03:15 PM:

What angers me even worse is the finanical rape against American citizens and small business people by the health care industrial complex.

Lee Raymond is getting a $400 million platinum parachute for retirement from Exxon Mobil. But that's only a fourth what Dr. William McGuire of United Health Care Group is getting through all his stock options. He stands to leave that company with a cool $1.6 billion.

Share prices in that company have increased by 7000 percent. I'm sure a great deal of that has to do with the giant blank check Uncle Sam stupidly extends to health care corporations in our very retarded form of socialized medicine. If that company, or any other health care company made its fortunes by charging only what the market will bear rather than taking a bunch of government subsidy socialism money I'd be okay with his compensation package. Everyone knows full well just about every hospital in this nation would keel over and die if they could only charge patients what they could actually afford in the open market.

Another thing that really angers me about that situation is every now and then the AMBUCS business club I'm involved with will have some hospital executive or other health care company guy speak to our group and ask us to dig in our pockets to donate lots of money. I probably wouldn't mind if I made $20,000 or more per month. If the hospital has to go out and beg average people for money how are they able to pay a bunch of their employees (many who aren't even doctors) six figure salaries?

Gas prices are still aggravating as hell. But I'm commuting back and forth to work at least 4 days a week on my trail bike. I only fill up my pickup truck about once every 6 or 7 weeks.

Posted by Mike Blakesley (Member # 26) on 04-24-2006, 03:54 PM:

quote: Adam Wilbert
"rethink the Hummer."

That's a great line. You just wrote a great new advertising slogan for somebody. [thumbsup]

Posted by Leo Enticknap (Member # 534) on 04-24-2006, 04:30 PM:

quote: Paul Mayer
Can't happen soon enough for me - even though I may end up having to share the bus with crowds of crack/meth tweakers forced off the road in order to continue their habits.

What's worse? Being in a bus which is sharing the road with a crack/meth tweaker at the wheel of an SUV, or having him in the bus itself?

The most likely scenario in Britain would be him driving the bus, so look on the bright side! (Psycho Bristol bus driver story)

We're slowly creeping towards the £1 a litre mark. But I seem to remember that we were last here around August last year, i.e. at the end of the summer holiday driving rush, not the start of it. LPG has nudged up a penny or two at most places in the last month, too.

Posted by Richard Fowler (Member # 893) on 04-24-2006, 04:40 PM:

A few years ago Venezuela's gas was under 30 cents a gallon....I remember driving cross country ( Florida to California ) in my Dodge Dart for under $30.00 in the early 1970's...now $34.00 a tank for my Honda Element...see the future before it becomes the present [Wink]

The worst ride I had was in a client's Hummer [puke]

Posted by Mark Gulbrandsen (Member # 72) on 04-24-2006, 04:44 PM:

Its still a reasonable 2.59.9 here in Bountiful,Utah at the Maverick Station. According to CNN we still have the lowest gas prices in the country.

Rick,

This has been going on since the gas taxes in Indiana have been so low.... as long as I can remember. I think some CNN reporter was really in trouble to come up with a story if any kind that day! Simply put Indiana does not have the high gas tax that other states do and its been like that as kinbg as I've been driving....1971. Their taxes are collected from liscense plate sales and the states residents HATE it. why they don't get rid of it is beyond me... those Hoosiers are just too nice and laid back. Esentially they are paying for the low gas prices for truckers and others passing through... oh and they all know that. A new car set of plates is typically well over 1,000.00. Plating a new Vette in Indiana... you'd have to add it on to the loan and make plate payments. The tax you pay for your plates there is based on vehicle selling price. If you are buying ALOT of gas or have a fleet of gas thirsty boats then traveling 15 miles or sometimes just across the street to Indiana is worthwhile for a fill up.
Realize too that Illinois and Indiana's largest populated areas basically run into each other by Hammond...... I call that part of the U.S. The armpit Of America! Amazingly, most of the time it also stinks.... from the Steel Mills in Gary [puke]

Now lets all go to Alaska for a fill up [thumbsup]

Mark

Posted by Chris Hipp (Member # 1788) on 04-24-2006, 05:07 PM:

While I do not drive a hummer, I do have a gas guzzler. I get about 15-18 mpg in my truck. It is paid off and I will continue to drive it until the cost of gas is more than it would cost me in a car payment and full coverage insurance each month. I estimate that would have to be around $12/gallon.

Posted by Richard Hamilton (Member # 321) on 04-24-2006, 05:35 PM:

Mark,
CNN said the people were driving 25 to 30 miles, one way. I could see if it was just across the street,maybe this would make sense, but in this case, they are paying more in the long run.

Don't get me started on the license plate issue!!! I still have my temporary tag on my car, and I am dreading the day I have to pay for a plate! Only 1 more week to go!

Later, Rick

Posted by Mike Heenan (Member # 392) on 04-24-2006, 06:19 PM:

That's odd, I read that gas in Venezuela is 10 cents a gallon recently.

Posted by Mark Gulbrandsen (Member # 72) on 04-24-2006, 06:31 PM:

quote: Richard Hamilton
CNN said the people were driving 25 to 30 miles, one way.

Well, I wouldn't believe everything thay say on CNN thats for sure. More like 2 or 3 miles each way...... I've been through that area a thousand times and it is some of the most congested traffic area in the U.S., worse than L.A. at times! Going 20 to 30 miles does not make sense.

Mark

Posted by Ian Price (Member # 14) on 04-24-2006, 07:05 PM:

So I just drove from Cloverdale to Las Vegas which is about 650-miles. With the air-conditioning on and the cruise control set at 75, I get about 28-miles to the gallon. I spent a record $3.21 per gallon in Barstow, CA. Yet another of the long reasons not to move to Barstow.

Gas for one-way trip to Las Vegas by car = $75.00

Or if you use the total cost of ownership model of $0.56 per mile, then my trip cost me $356.00

Or I could have flown on Southwest:

$89 one way fare
$56 drive to Oakland
$36 parking Oakland
$20 Cab ride downtown Las Vegas
$60 Cab rides to the convention
$89 Plane back to Oakland

= $350 to fly to Las Vegas or add another $200 to rent a car.

Posted by Richard Hamilton (Member # 321) on 04-24-2006, 07:37 PM:

quote: Ian Price

$20 Cab ride downtown Las Vegas
$60 Cab rides to the convention

Why would you pay for a cab if you are renting a car for 200 bucks? hehe

Posted by Monte L Fullmer (Member # 2797) on 04-24-2006, 11:50 PM:

quote: Mark Gulbrandsen
Their taxes are collected from license plate sales and the states residents HATE it...

..nice thing about IDAHO is that this state doesn't consider vehicles as property, thus no property tax is collected.

You can tag a new car for less than 80 bucks ... total (if you don't get those stupid vanity plates).

I know, it's funny filling up at a self-serve and hearing people whine about the prices..while they fill their gas-guzzlers. I tell them "that when I grow up, I want to be a gas guzzler like you." , or,as I'm filling up my car and see what they're filling up that sucks gas like a wild beast - "2.70 per gallon..is it worth it?" - as I'm filling up my Suzuki that can garnish me 37mpg on the freeway- with A/C on and honking on the freeway doing almost 80mph.

-Monte

Posted by David Buckley (Member # 2600) on 04-24-2006, 11:57 PM:

Here's a map of gas prices across the US:

http://www.gasbuddy.com/gb_gastemperaturemap.aspx

Posted by Mike Heenan (Member # 392) on 04-25-2006, 01:26 AM:

Yeah but Suzuki's dont get the chicks... [Razz]

Posted by Monte L Fullmer (Member # 2797) on 04-25-2006, 01:51 AM:

quote: Mike Heenan
Yeah but Suzuki's dont get the chicks...

Who cares...I'm done with that BS .. I'm married.. [Razz]

Posted by Randy Stankey (Member # 64) on 04-25-2006, 03:02 PM:

quote: Mike Heenan
Yeah but Suzuki's dont get the chicks..

They will when all the Hummers are sitting by the side of the road with empty gas tanks! [Smile]

Posted by Monte L Fullmer (Member # 2797) on 04-26-2006, 04:09 AM:

quote:
Hummers are sitting by the side of the road with empty gas tanks!

..and drivers with credit cards all maxed out from shoving gas into those "Humvees".. and their date having to pay the bill for their night out on the town since he's broke.

-Monte

Posted by Mike Heenan (Member # 392) on 04-26-2006, 04:56 PM:

I seriously doubt most who drive a Humvee or other SUV like that worry about some extra dollars at the pump. If they can afford a vehicle like that, then I dont see what amounts to pocket change basically, affecting their wallet too much.

Posted by Leo Enticknap (Member # 534) on 04-26-2006, 05:30 PM:

That was widely pointed out here when the Chancellor (effectively the no. 2 in the UK government) announced that he was going to become the world's biggest tree hugger, by increasing the road tax on the highest Co2 emissions vehicles by about £50. If someone can afford to buy a 4x4/SUV costing £30k, and then pay the £5k or so a year it costs to run in maintenance, depreciation and insurance, then an extra £50 is hardly going to have them beating down the doors of their nearest Prius dealership.

Related to which, I suspect that our government is very happy to sit back and do nothing while the petrol price busts the £1/litre mark and keeps going. If they overtly tax us out of big-engined cars then they'll be condemned by the right-of-centre as a Big Brother, politically correct dictatorship. But they stand aside and let market forces do the job for them, they can blame the Chinese, Ahmedinejad (sp?) and SUV owners, while achieving the same end result.

Posted by Monte L Fullmer (Member # 2797) on 04-26-2006, 07:57 PM:

quote: Mike Heenan
If they can afford a vehicle like that, then I dont see what amounts to pocket change basically, affecting their wallet too much.

..two conditions that can happen here: As the comment "getting the chiks" - a guy who wants to show off his stuff will get these vehicles to "get the chiks" and not facing reality that eventually he will have to come down to earth and face his debts that he's acruing with the vehicle (that he got with a lease contract) payments and the fundage to fuel such a beast.

Sooner, or later, it'll all catch up with that person and he'll fall real hard to earth.

Is "getting the chiks" worth all of this?

..why you see so many vehicles this size in the used car lot - vehicles that people either couldn't afford anymore due to bankruptcy situations or repossession, or turned in when the lease expired.

(I know that I'm just showing my age here, but I been there and done that when I was young and stupid ... spent money on the chiks with fast cars and went under real bad..)

-Monte

Posted by Leo Enticknap (Member # 534) on 04-27-2006, 01:36 AM:

quote: Monte L Fullmer
..why you see so many vehicles this size in the used car lot - vehicles that people either couldn't afford anymore due to bankruptcy situations or repossession, or turned in when the lease expired.

By the same token, medium-sized hatchbacks command much higher used prices than large saloons. After 3 years/60k miles or so, the initial depreciation has gone on both categories: the difference is that a Mondeo will cost significantly more to run in fuel, maintenance and insurance than a Focus.

When I last changed my car 2 1/2 years ago, a four year-old Mondeo with 95k miles on the clock was going for around the same price as an 8 year-old Golf with 130k ish. I cheated the system a bit by getting the Mondeo and then having an LPG tank put in it, thereby enabling me to buy fuel at a much lower tax rate. But that's only really cost-effective if you do more than 20k miles a year, which most drivers in Britain don't (the average per vehicle is 12k). And I still get hit with higher bills for things like tyres, brake discs, shock absorbers - basically, all the usual stuff that wears out and needs replacing once a car gets to that sort of age. I suspect that's another reason why the used car price of larger saloons is low - a lot of people (especially fleet managers) buy them new and plan on getting rid of them just when they reach the mileage at which big ticket items start to need replacing.

If the cost of fuel stays around these levels long-term, I guess that will put downward pressure on the used price of SUVs, too. As others have pointed out, it's never going to have a massive and immediate effect on the way we live our lives unless it gets to stratospheric levels ($12 a gallon as Chris worked it out, which would equate to around £4.50 a litre here). For example, my car-related outgoings for 2005 were £3,206 (yes, I know, I use Microsoft Money and that's sad), of which fuel accounted for £884. The rest of that was maintenance, insurance, breakdown cover and rent on the garage. And that total figure is just outgoings - it doesn't include depreciation. Given that my car has so many miles on it by now, I'd guess that the depreciation figure isn't really significant in my case any more.

At a very rough guess, I'd speculate that a typical Brit running a 1.8 Focus or Golf which is 2-3 years old and does 12k miles a year probably pays around £4k in total (including depreciation), of which less than a quarter of that is fuel. The price of that fuel, therefore, is really going to have to skyrocket before there are going to be any immediate and dramatic effects. The impact will be a slow drip-drip-drip, especially as the extra money people are spending on fuel is pulled out of other sectors of the economy.

Posted by Frank Angel (Member # 248) on 04-28-2006, 05:34 AM:

Someone explain this to me. The gas station owner has a delivery of regular unleaded and fills his 5000 gal tank -- the price he is charged is $2 a gallon. It usually takes him a month before he has sold all of his gas and he has to buy a fill up. However, during that month the gas price on his pump keeps inching up every few days. How does that happen? The gas in his tank was purchased at $2 a gal, so no matter what happens at the refinery or what his oil company is charging NOW, why is the price on his pump always the current price and not the actual price of the gas in his tank, which still is $2 a gallon gas? Why is he charging today's market price for the gasoline which was paid for last month at a much lower price?

How did the local gas station turn into a futures market? How is this not price gouging? It would be like the supermarket going around every day putting new prices on all their products because the prices at the manufacturing level are rising. How come gas stations get to do this (you see the owners on the news, throwing up their hands in the air saying, "It's not me....it's what the big oil company charges me." "Yah, well, bub, the oil company charged you $2 a gallon when they pumped it into you tank last month....how do you get to sell that same gas at $3.50 two weeks later and still not wind up in jail?"

Posted by Lyle Romer (Member # 1266) on 04-28-2006, 09:07 AM:

Frank, it is because they are charging the amount based on what they will have to pay to refill the tank. It works the same in the other direction. When the futures drop, the price drops even though the gas in the tank was more expensive. Is that anti-gauging?

Think of it this way. You own a store that sells widgets. You paid $1 for each widget and want to make 10% profit. You need to keep 1000 widgets in stock to serve your customers. Currently you are charging $1.10 per widget. Now your supplier calls and says the price of widgets are going up to $1.50. If you sell your current stock at $1.10 that will give you $1100. Unfortunately, your next shipment is going to cost $1500. Now you can't afford to pay for the shipment because you're $400 in the hole. Instead you raise your price to $1.65 now so that you will have money in the bank after your next shipment.

Since you've done this every time the price goes up, it all evens out. In a way, operating this way keeps the cost down. Using the same example, if you waited until the shipment with the increased cost to raise the price, you'd have to borrow the shortfall from a bank so that you can take delivery. Now you will be paying interest on that loan until you can sell enough of the second shipment to pay it back. Since you are still targeting a 10% profit, you will have to raise the price further to cover the interest payments.

In a nutshell, it's not price gauging at all, it's cash flow management.

Posted by Steve Guttag (Member # 268) on 04-28-2006, 10:51 AM:

Lyle is 95% right. In a free market place it is impossible to price gouge except in Monopolistic (or Oligopoly) situations. The couteraction to excessive profits in the market place is competition...the more that offer something, the tighter the competition on the lower cost to the consumer. If Exxon/Mobil were broken up, Likewise Amaco/BP...and on down the line...prices would be competed with more (probably not enough since the market is so huge for the number of gas providers).

In his widget example...the merchant is never loosing money. The company spent $1000 on the initial supply of widgets and will make $1100 when the last one is gone. Yes, they had to spend $1500 on the next shipment if they choose to stock another 1000 units but by the time they sell all of those, their total profit on the 2000 widgets sold are up to $600.

What was being forgot is that one had to spend seed money to begin with (that initial $1000). There will come a point when the company will get a return on their investment AND continue to sell widgets at the 1000 unit rate/time period.

All of that said, a merchant will sell at "market value" all of their products regardless of what they paid for them.

Lets say I own store "B" and store "A" above went out of business because they were selling widgets at too low a profit. I buy their stock of widgets at .25-cents on the dollar. Do I lower my price because I bought them for less? No. What I, the store owner pays, is none of the customer's concern, legally. Now if the customer has a feel for my cost of widgets, and they have choices, they may feel I charge too much and not buy from me (free market and all).

What has really not been working in our country (USA) for a long time, is the government's role on anti-trust. When monopolistic practices come into play, it throws the free-trade market out of whack...it creates artifical supply/demand changes which the free market operates on. It is a delicate balance though...too much competition will lower prices too much and also make the market unstable since no manufactuer or merchant can make sufficient profit to survive. One dirty little secret that most economists don't mention about the supply/demand charts is that taken to the end of the time specturm, you end up with mere subsistance level living...every time. That is not what most Americans are used to living.

Posted by Lyle Romer (Member # 1266) on 04-28-2006, 02:01 PM:

True about the seed money for the first delivery but that is your start up cost. You don't want to have to borrow for continuing operations which will add to your product cost in interest payments. I suppose you could keep making capital infusions but why would you want to do that? I'd be like taking money back from your paycheck.

Posted by Chris Hipp (Member # 1788) on 08-09-2006, 11:40 AM:

quote: Lyle Romer
Think of it this way. You own a store that sells widgets. You paid $1 for each widget and want to make 10% profit. You need to keep 1000 widgets in stock to serve your customers. Currently you are charging $1.10 per widget. Now your supplier calls and says the price of widgets are going up to $1.50. If you sell your current stock at $1.10 that will give you $1100. Unfortunately, your next shipment is going to cost $1500. Now you can't afford to pay for the shipment because you're $400 in the hole. Instead you raise your price to $1.65 now so that you will have money in the bank after your next shipment.

According to this logic, the value of my current house should be equal to or greater than the house that I going to buy. I like the way you think.

Posted by Mike Blakesley (Member # 26) on 08-09-2006, 12:27 PM:

That's a dumb analogy. If you're going to buy a new house that's EXACTLY THE SAME as the house you're in, in the same neighborhood, then YES, the same logic would apply. But that almost never happens, does it. In retail, you are always replacing the "sold" item with a new item that's exactly the same.

Posted by Chris Hipp (Member # 1788) on 08-09-2006, 01:01 PM:

Yeah, Duh. Of course it is a dumb analogy, that is what most jokes are.

Posted by Greg Mueller (Member # 17) on 08-09-2006, 01:04 PM:

I don't get some of these arguements.
If you buy for $1 per widget and you have 100 of them and sell them for $1.10 ea then you have made a profit. Next time you buy the widgets (replace stock) they cost you $2 per widget. So you buy them and mark them up to $2.20 per widget and you make your mark up profit. If you buy them at $1 and mark up the existing ($1 ea) stock to $2.20 you are gouging.
The gas stations do not wait until they run out of existing gas and THEN charge more for the new gas they put in their underground tanks. When they hear of an excuse to raise their prices, they IMMEDIATELY raise the price on their EXISTING inventory. Yes they charge more for new stock, but they also charge more for existing stock. That's gouging.

Same with the oil companies. They are making "landmark profits" on their products. That means they are subtracting their "costs" from their "sales income" which is "profit". If they were just passing along their expenses, because it costs them more, their profit would be at the same level, but they are not. What the are doing, is charging more for existing inventory, thus their profit is greater.

Posted by Mike Blakesley (Member # 26) on 08-09-2006, 06:04 PM:

quote: Chris Hipp
that is what most jokes are

Hey, if you're going to make a joke you should put a [Big Grin]

after it. What you wrote is a very common misconception about the retail industry. Most people don't understand why we can't sell something for exactly what we paid for it, until it's explained to them.

Posted by Chris Hipp (Member # 1788) on 08-09-2006, 06:49 PM:

I probably should, but I find that the responses are generally more interesting if I don't.

Posted by Mike Blakesley (Member # 26) on 08-09-2006, 07:27 PM:

quote: Greg Mueller
When they hear of an excuse to raise their prices, they IMMEDIATELY raise the price on their EXISTING inventory. Yes they charge more for new stock, but they also charge more for existing stock. That's gouging.

No it's not!

There is NEVER any guarantee that the price of gas or widgets won't go DOWN again. Let's say a gas station had 10,000 gallons in the ground, that he paid $3 for and is selling for $3.05. If gas suddenly dropped to $2.00 wholesale, do you think the station owner would say "Tough cookies, folks...I am not going to lose a buck a gallon! I'm hanging in there at $3.05 until all this gas is gone?" NO, he's going to drop his price to $2.05 like everyone else. He will lose money on what he bought before, but he'll have enough to buy new inventory.

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.

"Gouging" would be if there were only two gas stations in town, and one burned down, and the other one doubled his gas price to cash in.

Posted by Matt Fields (Member # 3211) on 08-09-2006, 07:38 PM:

What you paid for something yesterday is history, what you can sell it for today is economics.

The name for this in economics is called "Present Value". The price of everything is changing constantly. What you paid for it is irrelavant.

Posted by Bobby Henderson (Member # 840) on 08-09-2006, 08:51 PM:

I really like it how BP is getting away with perverted negligence in not maintaining very critical infrastructure (that Alaskan pipeline that is now shut down because of BP's view that inspection and maintenance was a very "optional" thing). Other companies inspect their pipelines on a pretty frequent basis, yet they let this major artery go unchecked for several years? Hmm.

The governor of Alaska has announced a hiring freeze based on all the money the state is losing to the pipeline shutdown.

Meanwhile, BP can be expected to still make a shit load of billions of dollars worth of profit and tell everyone else to go fuck themselves in the meantime.

This kind of provides a flashback to those mid 1980's days when the oil boom suddenly went bust. Not too many folks gave two shits about oil people then. They'll be beyond extremely non-sympathetic this time around when the next bust happens.

Those greedy speculators and executives in companies like Exxon/Mobile, Conoco/Phillips, Chevron/Texaco/Caltex, Valero, etc. had better have been saving some of the untold billions in profits they have been making from one consecutive quarter to the next. They're going to have to live off of it.

I will not be made to care if oil suddenly plummets to $20 per barrel and cost many their speculative fortunes. It's their tough shit for making life a bit harder on everyone else. Screw them. That's the attitude they have for the rest of us. The feeling is mutual.
[fu]

Posted by David Stambaugh (Member # 1102) on 08-09-2006, 08:54 PM:

The big 3 oil companies earn around 8% profit after all expenses etc. The average for the industry is 7%. As a percentage, that's not very high. Any bad business decision, or freak act of nature, or forgetting to inspect your pipes, and that profit can be easily wiped out. There's not a lot of margin for error. Most businesses with profit margins that thin are not considered to be doing all that great.

Now if you just look at the pure numbers, 8% profit on sales of 5 trillion dollars is 4 billion dollars. Wow, they made $4B profit! Let's reign in those bastards. So let's see, how low can we force oil companies to reduce the price of gas at the retail level and still allow them to show a reasonable profit. Probably not as much as we would like to think. And what is a reasonable profit anyway?

OMG, I can't believe I'm defending Big Oil. [uhoh]

Besides, gas needs to be MORE expensive, not less. [Big Grin]

Posted by Jason Black (Member # 684) on 08-09-2006, 08:55 PM:

Either way... the big oil companies are sticking it to us right now. Anyone want to argue or question the relevance if THAT?

BTW..I have this sticker on the rear window of my Accord.. and I've passed several more out for those who share the same view...

OOPS.. forgot to add taht the Exxon logo was also inserted before I had the actual decals made.

Posted by Scott Norwood (Member # 30) on 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.

Posted by Jason Black (Member # 684) on 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!

Posted by Tao Yue (Member # 836) on 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.

Posted by Bobby Henderson (Member # 840) on 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.

Posted by Joe Redifer (Member # 3) on 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.

Posted by David Stambaugh (Member # 1102) on 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.

Posted by Mike Blakesley (Member # 26) on 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.)

Posted by Greg Mueller (Member # 17) on 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.

Posted by Chris Hipp (Member # 1788) on 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.

Posted by Matt Fields (Member # 3211) on 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.

Posted by Scott Norwood (Member # 30) on 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.

Posted by Lyle Romer (Member # 1266) on 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.

Posted by Mike Blakesley (Member # 26) on 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.

Posted by Bobby Henderson (Member # 840) on 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.

Posted by Ron Yost (Member # 1850) on 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

Posted by Mark Gulbrandsen (Member # 72) on 08-10-2006, 02:32 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.

Or just move to Wyoming and get your gas for about 2.70 a gallon... its a nicer place than any of you are living in anyway.

Mark

Posted by Mike Blakesley (Member # 26) on 08-10-2006, 02:35 PM:

quote: Ron Yost
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.

Spoken like a true non-retailer.

Most people who don't re-price existing stock are either lazy, or have decided it's not worth the effort to bother with it. If an item is slow-moving and cheap, it's NOT worth the effort.

quote: Mark Gulbrandsen
Or just move to Wyoming and get your gas for about 2.70 a gallon... its a nicer place than any of you are living in anyway.

So what are you doing in Utah? Seems like Wyo would be more central for your travels! [Big Grin]

Posted by Chris Hipp (Member # 1788) on 08-10-2006, 04:56 PM:

The best economics lesson I have ever gotten was from MadTv

Two guys are sitting on a parck bench, one young and one old. The young guy is drinking a coke, the old guy is reading the paper.

YG: "Have you noticed how expensive coke has gotten these day?" OG: "yep, well its the cost of sugar going up."
YG: "yeah, Price of sugar goes up and the price of coke goes up. Price of sugar goes back down, price of coke stays the same."
OG: "Yep, that's how they get ya."
YG: "Yeah, then the price of sugar goes up again, the price of coke goes up again.
OG "Yep, that's how they get ya."

It does feel like that is how gas works.

So Mike doesn't blow an O ring:
[Smile]

Posted by Mark Gulbrandsen (Member # 72) on 08-10-2006, 05:46 PM:

quote:
So what are you doing in Utah? Seems like Wyo would be more central for your travels!

I've been giving that some serious consideration lately especially since I met a nice gal in Green River. I've been in Jackson all week doing booth work and then going hiking after 3PM..... This area sure spoils ya!

I ran into these fellas yesterday....

Mark

Posted by Mike Blakesley (Member # 26) on 08-10-2006, 05:46 PM:

Now if we could only get someone to design a car that runs on Coke. Wait - I guess that's more expensive than gas.

[beer]

Posted by David Buckley (Member # 2600) on 08-10-2006, 05:51 PM:

I'm sitting back watching this thread with some humour, reminding myself of some ancient proverb about people living in glass houses throwing bricks... Can I have my popcorn and coke at 8% over cost please? I'm feeling gouged...

Posted by Tao Yue (Member # 836) on 08-12-2006, 03:03 PM:

That was a joke, but like all jokes misses the point. You have alternatives: Pepsi, Safeway Cola, etc. If you insist on having the true taste of Coca Cola, then that's what you're paying for -- not the sweetener. By the way, there is no sugar in US Coca-Cola, it's all (government-subsidized) corn syrup. And they're really cracking down on Mexican and European imports of Coca-Cola -- you can't even find sugar Coca-Cola on online stores anymore.

As for health care, if that's the way you feel about insurance companies and the like, didn't we citizens decide against universal health care? If the prices were regulated by Congress, well, then, you won't be paying high prices anymore. There are other drawbacks, then, but price won't be one of them.

Go to Canada -- they're not complaining about high drug prices. They're not complaining about high medical costs. They are complaining about the waiting lines.

Posted by Joe Redifer (Member # 3) on 08-12-2006, 03:08 PM:

Why is sugar Coke illegal? Corn syrup will make your ass fatter more quickly. Corn sucks.

Posted by Chris Hipp (Member # 1788) on 08-12-2006, 06:21 PM:

Yep, that sure was a joke, especially considering the scource was MAD-Tv.

Dr Pepper sells some made with real sugar. It is about $6.50 for four 12oz glass bottles. I bought it once just to try it, and it didnt taste any different than regular HFCS Dr Pepper. I always buy the off brand $.50 2-liter stuff anyway. Bottled coke in Mexico does taste better then coke here in the states. Not the plastic bottles though. The kind that is in the refillable glass bottles. Stuff from the fountain tastes the same.

For those who do not know, coke is a generic term in the south for any type of soda or "pop."

Posted by Louis Bornwasser (Member # 3063) on 08-12-2006, 10:23 PM:

You can buy sugar Coke during Jewish holidays from any grocery store that caters to Kosher folks. (I try not to buy them out so those who need this for religious reasons are not inconveneinced.....but it sure is mellow...like it used to be here. Coke still uses sugar in Europe. Louis (Jewish friends remind me when these holidays are imminent.)

Posted by Charles Greenlee (Member # 3856) on 08-13-2006, 04:05 AM:

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.

If I can't afford paying $3 a gallon for gas, I definatly can't afford the $15k for a new car. And that's for a cheap putt-putt, and not one of the newer hybrid uber effieceint ones. Grr, the pains of driving a gets that requires premium, but it does get 18MPG city. Still ok for a current car. Definatly good considering the car's technology is 27 years old. And its especially good considering the car has been driven regularly for it's 27 years, rather than kept in storage or driven only on special occasions.

Posted by Monte L Fullmer (Member # 2797) on 08-14-2006, 03:45 AM:

Posted by Jason Black (Member # 684) on 08-15-2006, 08:30 PM:

monte:

That image looks strangely familiar...

Posted by Charles Greenlee (Member # 3856) on 08-15-2006, 10:16 PM:

OMG, so thats where they get the gas from. Very interesting, if not uncomfortable. [Big Grin]

Posted by Richard Hamilton (Member # 321) on 08-16-2006, 01:37 PM:

quote: Mark Gulbrandsen
I've been giving that some serious consideration lately especially since I met a nice gal in Green River.

hehe!

Posted by Phil Hill (Member # 371) on 08-16-2006, 03:13 PM:

Jason, dontcha just hate it when someone "lifts" your intellectual property? Even more so when they do not look back in a thread at least 2 or 3 pages to get the gist of what's going on? JFC! [Wink]

Posted by Jason Black (Member # 684) on 08-19-2006, 11:08 PM:

I'm used to it..

I've distributed about 60 of those window decals locally... LOL.. I got a kick out of 'em...