Gas-spiracy

[sleepersn95]

Has anyone else noticed that gas prices have leveled off, or in some areas gone down in price since the gov't "wondered" why the prices where going up per gallon and crude prices had stayed the same.

I also noticed then more affluent the neighborhood the higher the
gas is, almost 10-15% higher(over $2.00 per gallon in Bethsada, MD in Feb..

But in the last two-three weeks I have noticed that in Vienna, VA
on RT.123 near Nutley the is a Shell that sells 93oct. for about $1.85. Every other gas station sells for about $1.95 or above for 93 octane, is this affluent area.

The shocker is in Maryland, at Rt. 32 and Rt. 108 in RiverHill, MD (Columbia, MD)another affluent area, the Mobil One gas station had 93 octane on Thurday, May 31 for $1.75 and on Saturday, June 2 the same gas was 1.71 per gallon.

I just hope that the oil takes a look at the telecommunication industry, and what the regulation by gov't has done to it. I glad to see some gas station owners are being a tad bit more honest than some others.

I don't mind paying for gas, but I do not like being taking advantage of because I can "afford it".

Sorry for the vent!

 

[Gerald]

Well said,

I especially hate it when they say they have to pay more for oil. We all know that the current stock is still what they paid before, yet the prices on the CURRENT stock skyrocket the day or day after the news. I hope the gov. steps in.. Actually, maybe not, the gov. milks enough money from us. Who knows, better or worse, I've never thought about it much.....?


Gerald

 

[John N]

As someone who works in the oil patch and hears this all the time, all I can think of to say is "quit your whining". California passes laws that require a special blend of gasoline in their state, one that is different than anywhere else in the country, and then they wonder why gas there is higher - give me a break. The big bad oil companies have invested billions of $$'s in refinery upgrades over the last couple decades, all in the name of cleaner air, and now all who insisted on these environmental laws are screaming because costs go up. ***??? Fact is there are many regional blends driven by environmental concerns and a tremendous amount of refining capacity has been permanently lost via the Clean Air Act.

Let me know if any of you new economy guys want to come over to the oil patch and invest billions of dollars for a sub-10% rate-of-return...

Short-term price fluctuations are a puzzle for all, but in the big picture we enjoy incredibly cheap gasoline given the price of oil and our environmental priorities.

Oh, and now GW has caused gasoline in LA to be $2.23 a gallon? Gee, where did he find the time, what with retroactively making sure you didn't build any power plants in CA over the last ten years and all????

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[Y2K5SRT]

I will be the first to say that I am not whining. I definitely feel for those people paying $2.00+ per gallon for regular unleaded. I also understand the need to pay for refineries, etc. Interestingly enough, today's prices are pretty much in line with historical prices based on inflation. Take a look and see for yourself.

No, what I find screwy is the very short term fluctuation of 5-10% over a matter of a few hours. I know a little bit about the way the oil companies control some prices based on local zones within a metropolitan market. I am just baffled as to how several different brands all jack up their prices a dime within a couple hours when there was not a single blip in the oil market.

I am not going to complain, as I own two SUV's and a Viper. Needless to say, I didn't make my purchases based on gas prices. Of course, now the bride is pushing even harder to sell the Durango and buy an import. She is a bit more concerned...

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Chris

 

[slaughterj]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Y2KGTS:
Are there any laws that covers this stuff?

<HR></BLOCKQUOTE>
Antitrust laws, but I doubt the collusion is there, just a follow the leader. If there was, I think the Justice Dept would be on it, the gov't can't their hands off anything...

 

[sleepersn95]

"The shocker is in Maryland, at Rt. 32 and Rt. 108 in RiverHill, MD (Columbia, MD)another affluent area, the Mobil One gas station had 93 octane on Thurday, May 31 for $1.75 and on Saturday, June 2 the same gas was 1.71 per gallon."

This gas station is down to $168.99 per gallon while a similar Mobil One in Oakton, VA is seling it for $1.99. That's what some people and including the the Gov't is looking at, a 30 cent price difference.

The ablity to afford gas is not the issue, if gas was $3.00 per gallon I would pay it and charge it off to my customers or dedunct from taxes. But two dollars a tank three times a week thats 300 to 400 dollars a year...Hmmm maybe I should buy a gas station, but with my luck the gov't would due me like the California gas companies and make me sell gas at a fixed price.

 

[ruckdr]

quote:
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[GR8_ASP]

The prices in Michigan have been crazy too. Over Memorial Day weekend the norm was about 2.10-2.20. Now it is all the way down to about 2.05. We had this last spring and early summer too with the maximum I paid of 2.35.

Don't think we have oxygenated or reformulated fuels here so what gives. No California politicians either!

Ron

 

[BigsViper]

Addlebrain, I used to have some compassion for you as you were continually lambasted by PMUM and company, but now that you have displayed you ignorance for all the world to see:

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>
Don't know what you are all complaining about. Here in LA, 92 octane is $2.23 per gallon. Thanks Bush!
<HR></BLOCKQUOTE>

I can understand why you would be a perfect target for their haranguing. As was pointed out in posts by Trinity and Ruckdr, only fools (like Gov. Davis) would try to lay blame for decades of short sighted (non)energy policy on a guy who's only been in office for a few months. Didn't you have brown outs last year?

BTW: I noticed that you did well at Buttonwillow a few weeks back...Congratulations. I stopped by that track week before last while I was out in Bakersfield visiting with ALL THE OIL COMPANYS THAT HAVE HAD THEIR WINGS CLIPPED OR BEEN HELD BACK FROM DEVELOPMENT IN CALIFORNIA. You are reaping the rewards of your fruit and nut tree-hugging!

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[Roland L-Ocala FL]

What I feel so bad about, is folks on a fixed income. Sheesh, they are paying extremely high prices for gas, and they are having to cut back even for essential driving, because they are on a fixed income. Also, take a look at the oil company profits for this past year and tell me they are not doing well. In a down economy, they are doing more than allright! I agree with Chris, the dagone prices erupt over the weekend and may go up as much as 20 to 25 cents, then they gradually go down part of that way back again, but it takes much longer for it to go down than it does to go up. The gas stations all watch one another, and when one goes up, within hours they are all at the same price. But what the heck, that's not price fixing is it? The sad thing about all of this, is that they succeeded this time in making us think that $1.80 a gallon is a "great price" for a gallon of gas. Who woulda thunk it a couple of years ago!

 

[BigsViper]

Roland, One reason the profits are so high is BECAUSE GAS WAS SO CHEAP "A COUPLE OF YEARS AGO!!!!" When you have no profits (or a loss) in one period and then make money in the corresponding period the following year it can look enormous. A company making zero in the 1st quarter of 2000 and the $500 in the 1st quarter of 2001 will show a 500% INCREASE!!!!

Also the oil companies lost so many good people during the downturn of '98/'99 (not to mention '86-'91) that it is very difficult to ramp up activity right now, and supply is lagging demand, thus higher prices. Geeze let us make a living and maybe we won't have this severe pricing volatility (we don't like the low prices anymore than you like the high prices). Anyway it is common knowledge that when the general economy tanks, energy stocks do well. However, when the general economy is booming, it usually has something to do with low energy costs and we are suffering. No flames, just my $.02 since I earn my living in the energy biz.

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[Mike L]

A couple of comments:

Affluent areas typically have a higher cost of real estate, tougher zoning and more demanding architectual requirements. So it's not surprising that retail is sometimes priced higher.

Across the country, the replacement cost for gasoline changes daily. Most modern stations do not have inventory on hand sufficient for more than a couple day's sales, so they are immediately impacted by a change in cost.

Fewer competitors in the marketplace usually result in higher sales prices. Imagine the future impact of the current merger activity amoung major oil companies.

 

[Robert1994]

Gimme a break ! 92 octane here is $2.39 a gallon at most
stations. No special gas or additives, just a captured
market. It went up in January 2000 (The day I had the supercharger installed on my Tacoma 4x4), and it has only gone
up since then.

 

[Y2K5SRT]

Well, although I suspect this is a little Off Topic, I will add this: At the local stations around Kansas City they ALL raise and lower their prices within a few hours of one another. I went to lunch yesterday and the price for unleaded at the Amoco was $1.67. I came back an hour later and it was $1.75 at the same station. Two hours later and all the area stations were up to $1.75. Over the holiday weekend every single station went up $.10 a gallon for every grade. And dropped back down on Tuesday. Are there any laws that covers this stuff?

Chris

 

[BigsViper]

Gerald, "I feel your pain" as Billy-Bob Clinton used to say." Here in Oil Country we pay some of the highest prices in the country, even though the stuff comes from here and we have a refinery close by (93 octane for $1.97). Some believe that since the area benefits from higher oil and gas (and gasoline) prices that no one will gripe about the high prices.

Also a basic tenet of business is to increase prices as soon as you learn of a price increase on your inventory or raw materials. This allows you to have the cash flow to afford the higher priced stock when you have to replace that which you've sold. The real kicker is that everyone is so slow to come back down (if they do at all) when prices ease!

My $.02

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[K Adelberg]

Don't know what you are all complaining about. Here in LA, 92 octaine is $2.23 per gallon. Thanks Bush!

 

[Neil - UK]

If you think your fuel prices are high come to Europe, in the UK
we pay the equivalent of $5.40 per gallon, and there is a talk
today of another increase, something to do with OPEC and the Middle East

 

[BigsViper]

MJR - You've got the right attitude. My Tree Hugger comment is reserved for those looking for a scapegoat. If you can and are willing to pay the price to live in paradise, then there's got to be some trade-offs (higher gas for cleaner air). This applies to those fortunate enough to live in Hawaii also, Robert1994. Maybe air quality is not a problem there, but surely you pay a premium due to transportation costs of the crude and/or refined product. Also real estate is at a premium there due to low supply/ high demand. Just don't gripe and step up to the plate (like MJR).

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[Tom F&L GoR]

As another who makes a living from a small part of the oil biz, I have one other fact that consumers should know: by far, most of the "gas stations" are *not* owned by the oil companies - they are independently owned and can charge whatever price they want.

During the prosperous years consumers had with low gas prices, oil companies generally struggled. Unlike the big three car companies that had 15-40% market share each, no oil company had more than an 8% share in the US! So it was cheaper (more profitable?) to not own the real estate that gas stations sat on, and just supply the brand marketing, products, and some services. So now the same distributor can own a Shell station, an Exxon station, and a Texaco station all at the same intersection if they want. Now you know who the real customer for the major brands is - the distributor, not really the consumer. This type of competition among majors is tough, and will get worse because of the second tier brands that focus on convenience first, gasoline second.

No doubt the oil companies are in business to make money, but they don't have any "system" that lets them increase or decrease prices during a day. In fact, truckloads are about 8000 gallons, so prices shouldn't change any quicker than every 400 fill-ups...

 

[Y2K5SRT]

Ah, and as long as we are mentioning profits and independent owners, try this one:

There is a person in my neighborhood who is also into cars. I have never spoken with him (I have tried) and he ignores me whenever I wave on my way past his house and he or his family is outside. He owns a Cobra R (one of 300), an M5, a (supposed) 510 horsepower Saleen (seen it, never seen it go fast), a Testarossa, and just got rid of a Diablo. Another neighbor told me what he does for a living - he owns several Texacos in the area. Mind you, I admire him for his success and realize he could have made his money in any field. I just found it amusing that he owns some of the stations doing the pricing shuffle day in and day out.

One other note that will give you some insight on this guy: His son, a suspected vandal during the holidays, turned 15 last month. In Kansas you can get a "limited use" license if you have to work at age 15. It is only for driving to and from the workplace. He does not work. His daddy gave him a brand new Acura Integra Type R, complete with deafening sound system, coffee can exhaust, and tinted windows. This last part is so that the cops won't bust him for driving underage. As he roars past the grade school with his stereo pounding, nobody realizes that it is a kid driving. Nor did I realize it was the same kid trying to race me in the M5 until I pulled into the car wash when he did (just to vacuum, relax). He would barely speak to me when I complimented him on the car (M5). Fifteen years old and as stuck up as his dad.

Sorry for the segue, but since this is still off topic anyway...

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Chris

 

[GTS Dean]

In addition to the other legitimate reasons for higher prices, consider:

The US EPA has recently mandated HUGE cuts in allowable fuel sulfur content - on the order of approximately 97% reduction from current levels. This applies to gasoline and on-highway diesel fuel. Sulfur chokes off catalytic convertors and is THE major impediment to improved emissions controls for heavy-duty diesel engines. It takes an unbelievable amount of time and money to engineer, secure necessary permits, then reconstruct the refinery to remove the sulfur. Think it's been a long time since California built power plants? How about refineries?

The new EPA-mandated 8-hour Ozone standard (recently upnheld by the U.S. Supreme Court) effectively triples the number of counties who are subject to a mountain of onerous regulations. A number of these counties are proactively switching to oxygenated or Low Reid Vapor Pressure fuels to help their area emissions levels. Most of these fuels cost more to produce, and they don't give you fuel economy as high as the non-clean air fuels. Now you're buying crummier gas (and more of it) and paying more for it to drive cleaner.

 

[Ulysses]

That's interesting Chris. The guy that owns the gas station down the street from me also owns several in town. Very successful guy. I've spoken to him and he also owns several cars. I've seen a Ferrari, a Countach and an RT/10 that he has driven into the shop. All from the profits from his gas stations, what a coincidence!

 

[BigsViper]

Is there something wrong with making a profit? What about 18 months ago when gas was $.79 a gallon, did you mind the gas station owners and their largess? Blast the guy for being a **** and bringing up a brat, but I commend and defend his ability to make a profit. If you don't like it (or him) buy from someone else... or ride a *&$#@*&* bike!!!

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[Chuck 98 RT/10]

LOL, you guys are busting me up jumping on California.

I'm not saying a word. We don't know how to punch a ballot down here in FL.

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[Y2K5SRT]

Don - Relax! I wasn't blasting him for making so much as a penny as a Texaco franchisee.

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Y2KGTS very respectfully wrote:
Mind you, I admire him for his success and realize he could have made his money in any field. I just found it amusing that he owns some of the stations doing the pricing shuffle day in and day out.<HR></BLOCKQUOTE>

Remember, I am the guy that owns two SUV's and a Viper and could really care less what the prices are. I just found it amusing that this guy was doing so well (and that he was such a plick) while the prices at his stations (and every other one around him) jump up and down DAILY, with no rhyme or reason. One other note to show we can be friends: My family has owned a large sugar plantation in Louisiana since the 1800's, complete with its own railroad. Several years ago it was converted to, yep, oil. The railroad is long gone, but I am told my dad and his sisters are doing quite well from the ongoing proceeds.

America still has the least expensive gasoline outside of the OPEC countries (guessing) and I am very proud to live here. The fact that someone can come in and make a profit exactly because this is America is even better. The Texaco owner in question also happens to be in a minority status, so his success is even sweeter. I just wish he was halfway friendly and a semi-decent parent (IMHO). I can even forgive his passion for Fords. Pretty much.

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Ciao.

Chris

 

[BigsViper]

Chris, You have always been one of my favorite Viper-Bros-that-I-have-never-met! Your pictures and stories add alot to the board and the club and I'm not after you or anyone. My goal is to stamp out ignorance regarding oil and gas issues and defend the industry that has provided for my family, my employees and their families. There is so much "disinformation" regarding energy companiesand issues; the media plays the public like a fiddle. I'm not saying the industry is perfect, but it is so different from the media portrayal and the resultant public perception. That's where my flames are aimed.

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