i would love nothing more than to see either gm,ford, or chrysler bust out a new fleet of vehicles that would some how make it on other sources, and did it well enough to satisfy us drivers, and rid us of this crap.

 

There working on it.

 

Yes supply and demand has a part in the prices but can you point to any sources that indicate their is a significantly lower demand for gasoline (fuel) when the prices are high as they are now? without a reputable source I do not see there is a significant reduction in consumption during the summer months or during higher prices. I think that is just one of the tacticts big oil uses to justify the increases during the summer. I have posted this many times here on FTE and I will say it again. I belive this is a tactic being used by big oil to raise the floor on the price of fuels. As an example: If unleaded currently sits at $3.20 a gallon and it hits $4.00 a gallon this summer then drops back to $3.40 in the winter havent they effectively raised the floor on prices by .20 cents? and then next summer prices his $4.50 a gallon and then prices again drop down to $3.55 raising the floor another .15 cents. Call it a conspiracy theory or good business on the oil companies parts. Lets all remember oil companies are not in the business of selling fuels. They are in the business of making money for themselves and their shareholders. Fuel is just how they do that.

It makes no difference what their profit margin is. The national grocery store chains operate at about 2-3% profit margin. If bread was $6.00 a loaf and the stores were making a mere 9% people would be screaming bloody murder they same way they are at the gas companies. You make it sound like I am against the 9% oil companies are making. I am not against it at all. I am all for capitalisim. In fact the more they make the better my investments do. I wish they were operating on a 19% profit margin. Helps provide for me and my family in the future. You have not seen me complain about the price of fuel have you? so what would indicate to you I am against their profit margin?

I drive a car as a LUXURY item. Luxeries are just that. If you do not want to pay the high price for fuel then do not drive. You may say unrealistic but to that I would say you want your cake and eat it to. Ride a bike, mass transit, walk or whatever means of transportation you can muster. For all I care you can ride a big wheel to work. But if you drive a car you have two entities you can blame for your fuel bills. The oil companies and yourself. Only you can decide which one of those gets the lions share of the blame.

In my household I take the lions share of the blame for my fuel bills. I choose to drive as much as I do, to travel as much as I do, to drive an F350 PSD and a Suburban instead of a pair of geo metros.

 

and you live in cali with those prices, me myself at 4 bucks a gallon and my 12 mpg city driving, id probably drive straight into the ocean

 

$3.19 a gallon is what I am paying for diesel.

 

I don't know what the average industry's profit margin is, but I hope it is typically more than this (for the sake of my own investments, lol). That's a very good example you gave, and I see it the same way- I just never put the 'effectively raised the floor on prices' tag on it. Please don't get me wrong, I'd like $1.50/ gallon gas as much as the next guy, but I understand that things go up in price over time, why should oil be any different? It is just a fact of life. I (luckily) have a car that gets 36-40 mpg, which I need because of the distance I drive to work each day. But spending $275/ month just to drive to work is painful!! (Glad I don't live in SF...)
Lastly, no, I'm afraid I can't point to any source of info regarding the demand for gas in the summer months, but it certainly seems logical to me that if you raise the cost of vacation, people will change their plans to better suit their own budget.

 

i agree with about everything except this.

oil companies for years have been pushing the gov and society into being totally dependent on cars.

in america, unlike europe, did away mostly with the hub centric society and pushed everything to the outskirts with the big box stores and other things. the days of being able to walk out your door and down the street to get stuff has long been gone in most places.

i lived in europe for 3 years and never needed a car, i wouldn't even know how to get to school here if i didn't have one.

american society has been purposly built and designed around everyone having a car due to the fact fuel prices have been so cheap.

due to this the gov has invested billions in roads instead of practical mass transit options. stores and town zoning has also promoted the use of a car to get to places.

i love how people who live around mass transit seem to think the same exist every where else in america. i been to san diego a many of times and used the mass transit there just fine, but san diego is not like the rest of america.

i live in a town of 30 thousand of there is not a single method of mass transit, heck, there is hardly a sidewalk.

in my opinion we have created a society that makes a car almost a requirment. i didn't say a 100% requirment. but i will venture to say in my opinion (and depending on where you live) a car is as much as important as having shelter.

now, needing a car depends on where a person lives, but one can not practictly expect everyone in america to flock to cities now to have mass transit so they don't need a car.

the ones that are hurt by the high fuel prices still do not make up near a majority voting block to vote people in to create a mass transit for their area, not that anyone would lsiten either.

where i live a huge amount of people travel 30 - 40 miles to the city to work, they just spent millions on a highway expansion, why didn't they spend that on a mass transit commuter rail?

and as a side note, in my opinion the gov whether it is state or federal level, do not want a mass transit in place. they collect a huge amount of revenue from fuel taxes, to sit there and cut fuel consumption by even 10% would be a huge loss of revenue for them. the only way to make up for that loss would be to charge consumers for mass transit costs, then that in itself will scare anyone away from ever wanting to promote a mass transit system for their area.

 

Ok I apoligize for my info maybe not being entirely current. My knowledge of this comes from my 10 years in the grocery business finally quitting as a manager and a bit of info from the internet. Here are a few sources on grocery store profit margins.

http://www.agmrc.org/agmrc/markets/F...ryindustry.htm
Food retailers experience intense competition. Profit margins are about 1 cent on each dollar of sales. After-tax net profit for the U.S. supermarket industry was 1.16 percent during fiscal 2004-05, based on FMI’s 2005 Annual Financial Review. FMI indicates stores generally rely on generating high volume sales by making a penny on each sale of 100 items vs. making 10 cents by selling 10 items.

Look in the "Net profit margins" column of this graph.
http://biz.yahoo.com/p/734qpmu.html
2 biggies:
Safeway 1.87% profit margin
Kroger 2.28% profit margin

There are some anomolies as in everything but most hover around the same mark.

Now I do not have any insider information but looking at the numbers I found 9% certainly seems to be pretty good compared to the grocery industry.

P.S. Good discussion guys. I know it is a little "Hijacked" as is my tendoncy but I think the general discussion about how it works is great.

 

The oil you buy comes from an Exxon oilfield, is shipped in an Exxon tanker, and sold by an Exxon gas station.

You say "supply and demand". At what point in time is this oil being offered for sale on the open market where oil prices are negotiated?

If Exxon doesn't offer this oil for sale on the open market, then there will be less oil for refineries to buy. Those refineries then bid up the price of the oil that is available to them, and they must pass those higher oil prices on to the consumer in the form of higher gas prices.

But Exxon is charging us high gas prices too. Even though they're not paying $65 for a barrel of oil on the open market. Neither are Shell, BP, ConocoPhillips, etc.

That is called collusion. You could also call it stealing.

 

One thing I have noticed big time is the Corporate thinking.

Back in the 60's/70's the thinking wasn't "Supply and Demand" pricing ...most of it was "The more you buy the cheaper it gets".

This "supply and demand" attitude has only been around for a few years.It because the generic answer for rising prices.

Most people with common sense realizes cost's increase over time.

I would like to know what the proportion of costs vs retail price comparison from back in the 60's/70's to 2006 is.

I know in the 80's retailers made about 4 cents/gallon by the time smoke cleared.

Now it is about 3 cents/litre up here so I'm told.

The oil companies in Alberta are only paying 1% royalities right now on Tar Sands crude.

Gov't takes about 37 cents from every litre..
I thought it was always a % of the price and not a set monetary amount .
Up here we pay Tax on Tax on fuel plus a deficit % of 2/5 % included n the price of fuel.

What I know in Alberta is.. Not EVERYONE is at an advantage here.

They are gradually making alberta a place for only the rich to live.

Watch for the bust soon

 

^^^
wow!!


CBC ran a good story on oil today

http://www.cbc.ca/thecurrent/media/2...rrent_sec1.ram

 

Do you have a link for WM instead of Real ?

 

Isn't the oil bought and sold as a commodity? At what point is a bushel of wheat sold on the open market? What would I do with a barrel of light, sweet crude, even if I could go buy it? The finished produst is sold on the open market as gasoline, oil,plastic, or whatever.

And, Dennis, the demand for gas is higher than it ever was. Everyone owns a car nowdays (most of us have multiple vehicles). The reliance on our vehicles is higher than ever (as stated by bf250). By comparison, how much has your cable bill declined over the last few years? Mine has gone up quite a bit: phone, cable and internet are around $150/ month, yet there are more people than ever with a highspeed internet connection. Believe me, I am not trying to justify high gasoline prices. I am simply trying to understand a little better.

I completely agree with you on this...

You know, America certainly isn't perfect, but it sure as heck beats anything else out there (except maybe Venezuela )

 

PLEASE do not pay attention to any type of boycott idea.


I own a major oil company and if prices drop I will no longer be able to afford to drive my used 1980 pickup truck.

 

I know that.. but.... the term "supply and demand" can mean...we need to make more.......not charge more.. like it used to be.

Back in the 70's when the rubiks cube was born they didn't increase the price by 100%..they just made more .


They are using "More Consumption" as a reason to charge more for the product.

For years It was always.... you make more $$$ if you sell more merchandise.

ie: Quantity / Volume


But then again, when confronted on ONE reason for higher prices..they add a couple more reasons for higher prices.

It's a never ending bafflegab.