Price of gas. Sorry, I have to.

[Deadhead]

Keeping in mind that this is a very hot-button issue and politics are involved, we need to make sure we respect the forums rule about not getting into it.

Lot's of good points brought up here. Many, many factors are at work pushing gas prices higher - crude prices, refinery capacity, regional EPA requirements (do we need 17 different formulas of mid-grade?), global demand, politics as usual (from both parties), media hype, and that basic human need to complain.

I saw this on Drudgereport.com yesterday: http://www.local6.com/news/8988315/detail.html
If it weren't for the cost and limited lifecycle of the batteries, I'd be more interested in it.

And really, when it comes to alternative fuel - be it hybrid/electric or E85 - the objective is not cheaper transportation. It is cleaner transportation. Until some of those alternatives become mainstream, they will cost more than gasoline.

[Popeye]

And just so we don't confuse the poor neighborhood "liquid gold" delivery guy with a Big Oil Exec. I don't have anything to do with the price of gas, my transportation company doesn't have anything to do with it and last but not least...... I pay the same as you. No discounts and no free samples
Your friendly gasoline delivery guy, Pat

[stewchi]

I am not a fan of partial regulation, its too subjective and restrictive. I agree that price increases are hard to bear but it really is about time. Oil is something we all depend on, why? Not because it is the only options, but because it is the cheapest option and gasoline like everything else should be priced and sold at what the market will pay. I currently only get 10 Tv stations because I was annoyed by the “price fixing” by TV providers. Both satellite and cable prices are almost identical (but satellite artificially increases charges by charging per tv, which costs them nothing), DSL and Cable modem are almost identical in price, my home phone prices have gone up to match my mobile phone bills, these are all very different technologies but they are matching prices based on what people will pay, oil is just now starting to do that. Sure we could go electric, or hydrogen or biofuel or Mr. Fusion (alla back to the future) but it cost more so we use gasoline. What the oil producers are risking by increasing prices is the increased probability that alternatives will be found. They have started to trade this risk in for immediate profits. When gasoline reaches $4 - $5 per gallon in the US and $7-$8 in Europe we will see alternatives that are economically feasible, and those alternatives will improve over time and drive the cost of fuels down. But we have to get to the point when the initial investment and return is high enough for investors to risk their money on it.
And I don’t believe we will ever run out of fossil fuels, as supplies dwindle prices will increase to a point were alternatives will render them obsolete. We will run out of people willing to pay the ever increasing price for fossil fuels before we run out of the fuel.
Of course I am a little weird I lived in Europe long enough that the price of fuel influenced much of my lifestyle, I am still amazed at how cheap gas is here despite the increaseing cost. It used to cost me $60 to fill up my diesel VW Golf (8gal) when lived overseas, now it cost me $60 to fill up my Dodge Pickup (20gal).

I expect my government to step in when companies begin to take advantage of the power to suppress technology the way Microsoft did, in order to maintain market dominance. But simply increasing the cost based on what people will pay is what capitalism is based on. Price gauging is selectively taking advantage of people during a disaster when there options are temporarily limited. This is simply charging what the market will pay, profiteering yes, but not price gouging. The airlines don’t charge ticket prices based on any kind of rational link to what it costs, every person on the plane paid a different price for there ticket, but we don’t complain because we have interstates and cars, just think what they could charge is all we had was airports and no interstates. I say good for them (oil companies, refineries etc) and all their employees, at least one sector of the economy is really thriving, but beware if the prices go up to much they will drive themselves out of the market.

[RodKirby]

In Oz, price has just hit A$1.45/litre = about US$1.07

[sacherjj]

In Oz, price has just hit A$1.45/litre = about US$1.07

3.7852 L / Gal * $1.07 = $4.05/Gal. OK. That makes sense now.

[RayintheUK]

Did you HAVE to remind me?!

We're at £1.00 per litre in the UK (some stations dearer, a few cheaper), so that equates to £3.79 or $6.76 per US Gallon.

I couldn't say anything about the UK fuel situation without breaking Forum rules!

Ray.

[bigsteel15]

We're at £1.00 per litre in the UK (some stations dearer, a few cheaper), so that equates to £3.79 or $6.76 per US Gallon.

I couldn't say anything about the UK fuel situation without breaking Forum rules!

Ray.

I guess there is no Hummer in your future!!
I get a kick out of people that live in big cities and commute in a 4x4 SUV.
Curiousity, what does you little van get for mileage?

[Ken Weaver]

While we will all suffer with these kind of price spikes, the reality is it might do us good. I saw the number that the US consumes 10 million bbl of oil a day for transportation (not counting power generation). When it gets too dear, we'll start changing our habits. The way we consume is the best message we have to send to the government and the industry. Regulation alone will not have enough effect. The market will respond, but not until there are changes in the demand curve. The "initiatives" the administration just announced will do nothing. Windfall profit taxes, while attractive on the surface really don't solve things systemically. Public outrage at Exxon CEO's $400 million paycheck might get more attention, but he's making money for his stockholders. IMHO we need to take a lesson from Europe and not buy more vehicle than we need. We've been used to a cheap ride compared to the rest of the world, things are just catching up with us. The way we consume is really the only tool the average Joe has.

[bigsteel15]

I think you just hit the proverbial nail on the head there Ken.
We're all in big trouble with India & China both starting to consume more than they have in the past and automakers sending the "old factories" to China to make cars with low efficiency and pollution standards.
The Chinese have been eyeing the oilsands up here and are starting to invest heavy in Alberta. That has raised some backhair in Washington and rightly so.
I won't go any further with the supply issues here because of the rules.

I feel I've done my part by owning (2) VW Golfs, 1 diesel, the other gas and driving my truck only when I need to.

[Jim Boyd]

The price at the pump jumps as soon as crude prices go up, even though the gas was produced with the cheaper crude. But, when crude prices go down, the gas prices don't go down until that crude works its way through the system. Either price the gas according to the price of crude when it was produced, or the price of crude when it is sold. Don't price according to whatever makes you more money. This one really annoys me more than anything else.
Jim

This standard practice across the board in all kinds of industries and retailers.
When I worked at WallyWorld the first thing in the morning that got checked after sales and payroll was price changes. Can you imagine the storage problems if you did keep everything seperate? " Wait! you can't put those together, they cost different." Or "We can't fill our tanks untill they are empty because the cost is different."

[MilDoc]

... Public outrage at Exxon CEO's $400 million paycheck might get more attention, but he's making money for his stockholders...

So this makes him, or any CEO for that matter, worth the outrageous salries and retirement compensation they get? Used to be CEOs made about 5 times that of the average worker; now it's 25-30 times.

That is more outrageous to me than the price of gas! We've had it easy in the US while other countries paid many times what we did per gallon for many decades (Ray et al, when was the last time you paid less than $1 US per gallon?). So we got sloppy - gas guzzling SUVs driven miles to work by one person, sprawling suburbs that demand miles of commuting, no decent rapid transit in most cities, etc. And who in the world needs a Hummer?

[Warren]

I'll try to answer some of the questions my post generated. I was away from the computer so sorry about the slow reply.

Brian: the low octane is selling for around $2.70 +/- .05 at this time in Anchorage. Fred Meyers, Safeway, Costco and other operations who make profit selling other stuff usually stay on the lower end and eat some of the increase while offering incentives to purchase other goods. Standard and the other "petroleum products only" operations don't have that luxery.

Jim: Prices at the pump up here fluctuate with the barrel price for crude.

Joe: Stations in Anchorage all buy from the same supplier, not the refiner. Locally owned and the national brands and so pay the same base price bepending on the particular mixture of gas required by the station owner/operator. Standard's chemical additives are differentt from the grocery store pumps. Safeway has a different concoction from Fred Meyers so their price per gallon may be different.

I don't believe milk is sold on the futures market. Up here anyway, the dairies have contracts with the farmers and the stores. Changes in production sometimes require renegotiated contracts. But, the dairies, farmers and stores have a pretty good idea month to month what their costs/profits will be.


I don't begrudge the oil companies' profits as I benifit from them as I hold stocks. Further, the higher the price of crude the more monies that go into the state's coffers. It's kind of a modified "Catch 22." The higher the price of crude, the more the state gets in oil taxes. The higher the taxes and the price of crude, the more I pay for gas for the vehicles. The higher the profit for the oil companies, the higher my return from stocks. The more money the state makes from the oil company taxes, the more money it has to invest in the "Permanent Fund." The more money in the "Permanant Fund" the bigger the annual payout of profits from the fund to the shareholders (State of Alaska residents) which is also dependant on the performance of the stock market in which the Fund is invested.

The above paragraph boils down to; I pay more out of pocket for gasoline when the price of crude rises but, (good stock market performance required) I will get a larger check from the State in October so . . . hopefully it's all a wash. Some years it's not, some years it is, and in some really good years I get more than I spent.

I hope this is as clear and not too confusing. When you're an Alaskan you have really conflicted emotions regarding the price of crude. It's kinda like being Irish Catholic and Scots-Irish Protestant (which I am). I'm never quite sure where my loyalities should be. Am I green or orange. Actually, I'm a heck of lot more green than orange. The English beat up on the Scots-Irish too.

[RayintheUK]

Curiousity, what does you little van get for mileage?

I get about 40 miles per Imperial (UK) gallon, so that equates to about 33.3 miles per US gallon. It's not very powerful or quick (1800cc diesel), but it does the job I want it to.

Ray.

[Warren]

I left out a response to Paul in the earlier post. A person and an item are worth only what someone will pay. Would I pay Bonds millions to play for my team. If I had a team and he could give me a decent return on my investment on him, sure.

Would I pay $5.00 a gallon for gas? Only if I could get a return on it. If I had to buy $10.00 worth to get to work so I could make $20.00 . . . sure. If I would only make $11.00, maybe not. If I would make less then $10.00, no! Would I pay $2,000.00 for a Powermatic saw when a $300.00 saw would suffice no. If a Powermatic was the tool I needed, I would have to pay the asking price. It's economics.

I won't go to a theater because the product offered out of Hollywood isn't worth the $6.50 it would cost me. Obviously, Hollywood doesn't need my money or they would make a product I would pay for. Exxon wants the guy so they have to pay his price.

[Crash2510]

I can't understand why more people aren't up in arms on this thread over gas prices

put this into perspective since 2001 average price per barrel was 30 to 50 dollars gas jumped up to 2.89 and $3.00 at some times at as little as $42.00 per barrel of oil. Today, gas is up to $75.00 a barrel but gas prices are still around the $3.00 range.

Now explain this to me how do you explain these prices staying nearly the same when oil per barrel is double the price.

It is because we are getting screeeeeeeewwwwwwwwwddddddddd by big oil.

just my 2 cents(much cheaper than gas)