Yes, the topic title is 100% sarcasm. Here's some interesting reading for the few holdouts that still believe the current gas prices are just "business as usual" or inflation.

http://www.consumerwatchdog.org/energy/pr/?postId=6133

Here's the study mentioned in the previous link:
http://www.consumerwatchdog.org/energy/rp/6132.pdf

 

I still think it's ok to charge $3 a gallon. If it was half that we'd be wasting it even more then we already do.

 

http://www.theglobeandmail.com/servl.../Business/home

 

if by profiteering, you mean making as much profit as they can, then yes, obviously they are doing that. That's how every well-run company works.

For you economics students out there, this is an example of a fairly flat demand curve. that means that even though price is increasing, demand isn't decreasing very much. Therefore the companies that sell fuel have an incentive to keep increasing prices.

Only way to save money on fuel is to use less of it.

 

I agree, and those eco students will also know that the dollar going lower will raise prices.
Dono

 

Profiteering is the act of making a profit by methods considered unethical. Business owners may be accused of profiteering when they raise prices during an emergency (especially a war). The term is also applied to businesses that play on political corruption to obtain government contracts.
http://en.wikipedia.org/wiki/Profiteering

That's how every well-run company works? Umm... sorry, might wanna go talk to some of those economics students. Don't get me wrong, I'm as capitalist as they come, but don't you think the oil companies have some sort of responsibility here? Or is it okay for a business to "kick 'em while they're down", as it were?

 

BTW OSin86, love your sig; So I'm supposed to ignore my fellow American & support a car made in Mexico because the money comes back here? Doesn't sound like that trickle down theory is working out too well.

However, I'm assuming by your comment you think it's okay to "ignore my fellow Americans" when it comes to getting screwed by the oil companies? Those same folks who are struggling financially because jobs are heading out of the country, and because nobody believes in "Made in the USA" anymore, are the ones who are going to be outta luck when gas hits $3-$4/gal, just so we don't "waste" more of it than we already do... right? Doesn't sound right to me somehow....

 

Do you believe that the pig farmers control the price of pork? Do corn farmers control the price of a can of corn? Same thing.

 

The difference is that farmers produce as much as they possibly can each year. Between the oil producers and the oil refiners, the supply is controlled. Therefore, the basis of supply and demand is not sound. If you can control the supply (either in pumping capacity or refining capacity), then you can adjust it to the demand to run in a state of constant "shortage" even when you know that you will produce just enough.

Is this illegal? No. Is it wrong? Maybe yes, but probably not. Does it suck? Definitely. But I'm sick of people claiming simple supply and demand for high gas prices. The supply is adjusted to the demand for maximum profit.

Mike

 

I seriously hope you don't think that oil producers and refiners are holding back on production.

If you are serious, then tell me why crude oil was $10 per barrel in 1999. Why would oil companies let crude oil get so cheap if they controlled the price of oil?

 

I just want everyone to consider a few things...rarely mentioned.......

1. Speculators (oil is a commodity) drive the prices of crude up and down.....not the oil companies....and who the heck knows how THEY decide (Iran farted....Bush passed out.....Expecting more people to travel this Labor Day......The planets ain't lined up exactly right....etc.) and....

2. Your wonderful State and Federal Governments have gas taxes which equal (at least in NC) about 50-cents......I remember Bush mentioning after Katrina repealing the Federal portion (although I don't remember our Governor making any such statement...what a laugh....).....That, like Social Security Reform sort of fell by the wayside.......In my State (I remember when North Carolina used to be a "low cost of living" state) our NC portion WENT UP!!!!! after Katrina, because the Legislature had a clause included (which spared them the pain of voting for tax increases....the cowards.....) which RAISED the gas tax when the price of gas went up at certain increments.......GREAT.....THE PRICE OF GAS IS RAISED FOR THE CONSUMER, SO LET'S RAISE THE TAX TOO!!!!!

3. I'm kind of sick of defending the oil companies too (although let's remember that companies like Exxon are made up of MILLIONS of little-guy (and girl) investors......as well as the fat-cats....but lets spread the blame a little too.....and lets also blame the lack of refining capacity and the environmental regulations which stipulate a large number of "blends" which our meager refining capacity can barely handle in any case.....

 

The last time I heard, OPEC establishes pumping quotas. These quotas are not pump as much as possible, but rather a set amount. I know that most of the OPEC nations go by this. So production is set by a group of people that agree on an amount, not pump as much as possible.

Refinement has been limited by by regulation to a great extent. No refineries have been built in the US since the 70s if I recall correctly. I think that that actually worked out well for the oil companies. Now we can operate in a constant "shortage" mode and increase profits.

The simple fact is that if we increase refinement capacity, then supply will increase and the price should drop. They'll make less on each gallon of gas shipped. So why do that?

Hypothetically if you can produce 10 gallons a day and the US needs 9/day, why would you spend money to increase production to 12/day so that prices go down?

It's a known fact that plants/factories are most profitable at nearly 100% capacity. Just ask GM and Ford about that. Refineries are operating at like 97% capacity and profits are at record highs.

Mike

 

Missing a certain point, Mike.....The price of crude changes daily and the price fluctuates often....OPEC doesn't meet that often to set their production levels.....But yes....OPEC does have an effect on the price of crude.......

Also, no refineries have been built since the 70s....true.....so this should have stabilized prices at higher levels?.....so why build more?......problem is, we reached historical lows (adjusted for inflation) in the mid and late 80s, and again in the mid and late 90s....with no change in refinery production, but now the refineries are just plain tapped out and the lack of refineries are having a larger effect nowadays in production, pricing, etc.........especially after Katrina had her way......

And do my other points (taxation, etc.) not hold water?.....My main point, I guess, is that there are other factors to consider...in toto MUCH larger than...the "greedy" fat-cats at Exxon, Shell, BP, etc..........

Steve

 

The big lie big oil is propagating is the fuel rises based on the short term price of crude.

As I have read, it takes approx 90 days from the time a barrel of oil comes out of the ground to the time it goes into my tank as gasoline. Therefore today's gas pump price should be based on 90 day old priced crude oil, not on the immediate price of crude which hasn't even been processed yet. Then, when the crude market slips (which has been a long time ago), they can't follow the market till the high dollar stuff gets burned, thus a lag for the lower priced crude to work into the gasoline pumps. I just think this pricing descripency is wrong and unethical, and justice should look into this and all aspects of oil pricing including why all the majors in a town follow each other's price jumps immediately instead of pumping out what is in the storage tank, then price the new transport load according to it's new cost. This daily upward pricing jumps on the finished product already in storage is just not right. Price colluding among the majors is illegal too. Where is our government?

 

We aren't getting screwed. Fuel prices rode the same low wave for many years while the price of everything else in this country doubled or tripled. Face it, although prices raised fast recently all they did was catch up. We've been on easy street too long. Seems like the only solution to you and the others crying is to make this a socialist country where the government would run such businesses. No thanks, I like it the way it is. Cry all you want but we still pay some of the best prices in the world even at $3 a gallon.

FYI my sig is way off topic here so if you want me to get into that start a new thread or shoot me a PM.