• A few people have been scammed on the site, Only use paypal to pay for items for sale by other members. If they will not use paypal, its likely a scam NEVER SEND E-TRANSFERS OF ANY KIND.

Gas pricing

pump prices are driven by the commodity price as it trades in futures today, not by the costs incurred producing the gas in the pump today.
Exactly. Somebody already owns it (the right to own it at least) and can sell it at a premium when conditions are right.
 
From the time we get crude oil off the ship/pipeline, it takes a bit of time to refine it, and put it in trucks, and get it to your filling station.
YET in just a few days the prices started going up.
No way the gas that was already refined and sitting in storage tanks should be increasing so fast.

{P}ump prices are driven by the commodity price as it trades in futures today, not by the costs incurred producing the gas in the pump today. We might not like it but that is how our economy prices gasoline and many other commodities that trade in futures.

It's ironic to me that the second quote, above, was seemingly intended to refute the first quote, but in fact the two say the same thing.
...sort of.
The fallacy of the second quote is that pump prices generally do not go _down_ as soon as futures do, although they go up about as soon as futures do. Thus, the price we pay at the pump is generally the _higher of_ the futures price or the cost+profit of the gasoline we're pumping.

The consumer has preferred to let energy producers buy the cheapest price crude even if it means importing crude from sources affected by world events and so liable to rapid pricing shocks.

I wonder whether this last quote fails to recognize that to accomplish what it implicitly suggests would require federal government action to prohibit both import and export of crude oil. It's outside the ability of simple consumer preference to effect that change.
 
Taxes, Wages, Regulations UP
Profit Margins SAME

This is also a convenient fallacy often pushed. Profit margins are _not_ the same in times like these since, as I mentioned in the previous post, the price we pay at the pump is generally the _higher of_ the price based on futures pricing or the price based on cost+margin. IOW, margins do indeed go up during times of rapidly spiking crude or bulk gasoline prices. They come back down later, but not to a level lower than they were before the spike. Whether one chooses to label that practice with a word like "profiteering" is a separate discussion, but the fact remains that in the topic under discussion, margins increase (at least temporarily) in times like the present.
 
It's ironic to me that the second quote, above, was seemingly intended to refute the first quote, but in fact the two say the same thing.
...sort of.
The fallacy of the second quote is that pump prices generally do not go _down_ as soon as futures do, although they go up about as soon as futures do. Thus, the price we pay at the pump is generally the _higher of_ the futures price or the cost+profit of the gasoline we're pumping.



I wonder whether this last quote fails to recognize that to accomplish what it implicitly suggests would require federal government action to prohibit both import and export of crude oil. It's outside the ability of simple consumer preference to effect that change.
If enough consumers said they would pay more for gas made from domestic sources and put their money where their mouth is it wouldn’t take federal action. There are plenty of industries that mandate domestic products from pipe fittings to aircraft parts. I have customers that both sell domestic and buy domestic because they other demands it.
 
With the NC getting 63 easy and the truck getting worst of 13 my average is 38 MPG. Drive both about the same mi. per year, 4~5K. No matter what the price is I will be doing the same this year. Told my wife I will be taking her PCX150 out of the garage this weekend to which she replied she will not be riding it yet. I then told her that's ok I will be riding it. Without getting too deep in the other debates here the one thing that has been proven is when gas costs more people drive less and overall there is less pollution being made. I wish my house furnace could be updated with a Turbo I hear they recover heat energy and make things run more efficient,LOL
 
With the NC getting 63 easy and the truck getting worst of 13 my average is 38 MPG. Drive both about the same mi. per year, 4~5K. No matter what the price is I will be doing the same this year. Told my wife I will be taking her PCX150 out of the garage this weekend to which she replied she will not be riding it yet. I then told her that's ok I will be riding it. Without getting too deep in the other debates here the one thing that has been proven is when gas costs more people drive less and overall there is less pollution being made. I wish my house furnace could be updated with a Turbo I hear they recover heat energy and make things run more efficient,LOL
I was itching to comment along the lines that you have.

We can all complain about or debate about gasoline prices we can’t control, but what we really can can control in many cases is how much we buy. There is so much discussion about alternate energy sources and the pros and cons of each, but not enough discussion, in my opinion, about efforts to reduce energy consumption.

Basically, if someone is driving something like a Ford Excursion V10 around at 80 mph with one occupant and no cargo, I don’t want to hear them complaining about gas prices.

At least we NC owners have relatively fuel efficient transportation machines, whether they be for work or pleasure.
 
Last edited:
If enough consumers said they would pay more for gas made from domestic sources and put their money where their mouth is it wouldn’t take federal action. There are plenty of industries that mandate domestic products from pipe fittings to aircraft parts. I have customers that both sell domestic and buy domestic because they other demands it.
I agree with the sentiment, but could you point me to the retail outlet offering '100% American-sourced, American-refined gasoline' nationwide? There was a regional outfit I used to live near which claimed a higher percentage of American-sourced product, and one that at least seemed to imply 100%, but to my knowledge that was never entirely accurate.
 
This is also a convenient fallacy often pushed. Profit margins are _not_ the same in times like these since, as I mentioned in the previous post, the price we pay at the pump is generally the _higher of_ the price based on futures pricing or the price based on cost+margin. IOW, margins do indeed go up during times of rapidly spiking crude or bulk gasoline prices. They come back down later, but not to a level lower than they were before the spike. Whether one chooses to label that practice with a word like "profiteering" is a separate discussion, but the fact remains that in the topic under discussion, margins increase (at least temporarily) in times like the present.
I do agree that short term the margins vary, but year over year, the margins are remarkably consistent and rarely vary by more than a fraction of a percentage point. So for a few days, or even weeks, margins may go up or down, but annualized, the remain very close to the same.
 
I was itching to comment along the lines that you have.

We can all complain about or debate about gasoline prices we can’t control, but what we really can can control in many cases is how much we buy. There is so much discussion about alternate energy sources and the pros and cons of each, but not enough discussion, in my opinion, about efforts to reduce energy consumption.

Basically, if someone is driving something like a Ford Excursion V10 around at 80 mph with one occupant and no cargo, I don’t want to hear them complaining about gas prices.

At least we NC owners have relatively fuel efficient transportation machines, whether they be for work or pleasure.
It's going to seem like I am picking on you, but I am not; I promise. I think you know my nature. Would you accept the complaint from a person driving a Prius? Don't get me wrong, I get your point. If the FordEx is an affectation or some kind of displayed affluence by the owner, they may have the means to consume less fuel by changing their vehicle of choice. But their argument about the price of gas is no less valid than the person driving a Prius. For whatever reason society (globally) seems to judge on snapshots presuming an understanding of the totality of the circumstances can be absolute from just a point-in-time assessment.
 
I agree with the sentiment, but could you point me to the retail outlet offering '100% American-sourced, American-refined gasoline' nationwide? There was a regional outfit I used to live near which claimed a higher percentage of American-sourced product, and one that at least seemed to imply 100%, but to my knowledge that was never entirely accurate.
It's moot because the consumer prefers the cheapest price at the pump which currently rules out 100% domestic sources.
 
I'm spoiled by a 3 mile commute and ride either my bike or my wife's NC most every day, though I should ride a bike! So our carbon footprint is pretty small compared to when we commuted 45 minutes each way. Gas prices have no impact on our riding partly because we are fortunate to be financially OK and partly because we ride for mental health.
 
So now that we are over the gas price hump - maybe.
Oil prices fell, but gas prices didn't react as quickly - hummm ?
My point still stands.
I agree with the statements about how oil is priced.
But when gas prices rise as soon as the oil price goes up and then prices dont fall as quickly as the oil prices go down - explain it without excess profits taking!?!?!??
 
why is gasoline treated like ice cream ("free" market), charge what you want, buy what you can afford, but electricity and natural gas are public utilities? That one has confused me for a long time ... energy is energy, and I don't know many in the US who can control gasoline consumption to any greater extent than they control their thermostat or lights.
 
why is gasoline treated like ice cream ("free" market), charge what you want, buy what you can afford, but electricity and natural gas are public utilities? That one has confused me for a long time ... energy is energy, and I don't know many in the US who can control gasoline consumption to any greater extent than they control their thermostat or lights.
Electricity is not regulated in all states (i.e. Texas). I found it to be a nightmare moving from IN (regulated) to TX (unregulated). In TX you had to choose an electric company from dozens. They all had various pricing schemes which made it a lot of work to figure out what was a better deal. There are companies who will manage your electricity by shopping month-to-month for the "cheapest rate". This really bit people in the @ss when the grid could not keep up and electricity prices skyrocketed. This is because the rates fluctuated by the hour or even minute.

I agree, it would be difficult for most (including me) to drastically change the amount of gasoline I use. I don't like the idea of being "herded" towards electric vehicles because once they have you in one corral, the slaughter begins.
 
So now that we are over the gas price hump - maybe.
Oil prices fell, but gas prices didn't react as quickly - hummm ?
My point still stands.
I agree with the statements about how oil is priced.
But when gas prices rise as soon as the oil price goes up and then prices dont fall as quickly as the oil prices go down - explain it without excess profits taking!?!?!??
One quick reason, gas stations are independently owned, even a Shell gas station is not owned by Shell Inc...the gas stations sell their gas based on the price they paid for the gas. If they have quick turn around, they may lower their gas prices quicker if their cost goes down-depends on their next shipment.....When the prices goes up quickly, the gas stations receive calls daily from the refineries (each region, all gas stations usually receive gas from the same refinery....Shell gas, Marathon gas, Circle K gas...come from the refinery-the different detergents each gas brand uses are added in the trucks when the trucks receive their gas) inform the gas station what their next delivery is going to cost, so they raise the price on the pump....some gas stations raise the price immediately to compensate, some wait until their delivery is made...

The USA just has too much demand...Last week, the report stated that USA oil producers IN the USA pumped more than 11 million gallons of oil each day....OPEC for all its worth only pumps approx 2 million gallons of oil each day (heck in 2020, OPEC produced 30 million gallons per day-USA produced 11 million gallons of oil each day.).. The oil producers in the USA stated yesterday in a report, they have the capability of pumping more oil as is, but will not. Oil producers are owned by stock holders, and the stock holders have demanded the oil producers pay higher dividends to the stock holders, instead of putting their profits into more equipment to pump more oil. The oil companies/stock holders tired of fluctuation in oil prices....in 2020-the year of the world shutdown, oil was selling in the negative numbers per barrel (2, 3, 4, 5 barrels of oil could be bought for the price of 1 barrel today), that is the reason gas was selling below $2 per gallon in most of USA-oil producers didnt cut back and their was a gluttony of oil.

Only in the USA ,drivers will idle their engines at a Starbucks, pay $5 for a cup of coffee and then complain about $4 per gallon of gas-if they paid the same amount for their gas as their coffee, they would be paying over $32 per gallon for their gas. Same analogy for using any drive thru....idling cars waste fuel...park, shut off your car and go in and buy....or drive a hybrid (gas engine turns off at idle automatically).
 
So now that we are over the gas price hump - maybe.
Oil prices fell, but gas prices didn't react as quickly - hummm ?
My point still stands.
I agree with the statements about how oil is priced.
But when gas prices rise as soon as the oil price goes up and then prices dont fall as quickly as the oil prices go down - explain it without excess profits taking!?!?!??
Brent Crude is trading at $122 a barrel this morning. Five weeks ago today it was trading at $98.
What does your personal economic voice in your ear tell you about gas pump prices today compared to to the week before Russia invaded Ukraine? Should the pump price today be linked to $98 or reflect today’s 23% higher crude price? Would this help explain why prices aren’t falling fast enough?
Gas has dropped 74 cents a gallon here in what seems like a week or 10 days. That seems sort of how it went up but unless I went back and tracked the increases of crude to pump price I’d just be guessing.
 
Brent Crude is trading at $122 a barrel this morning. Five weeks ago today it was trading at $98.
What does your personal economic voice in your ear tell you about gas pump prices today compared to to the week before Russia invaded Ukraine? Should the pump price today be linked to $98 or reflect today’s 23% higher crude price? Would this help explain why prices aren’t falling fast enough?
Gas has dropped 74 cents a gallon here in what seems like a week or 10 days. That seems sort of how it went up but unless I went back and tracked the increases of crude to pump price I’d just be guessing.
Yep...Oil prices fluctuate greatly....yesterday, Brent Crude was selling for $114 per barrel. 2 weeks ago, Brent Crude was selling close to $140 per barrel....Before the pandemic, oil was selling close to $100 per barrel when demand was high....during 2020, when everything was locked down, demand was very low, and the price of oil hit rock bottom-on one day oil sold for less than $1 per barrel...Things opened up, demand has rising sharply, so prices have risen.....supply and demand, huge supply-low demand = lower prices. Supply not meeting demand=higher prices.
 
Electricity is not regulated in all states (i.e. Texas). I found it to be a nightmare moving from IN (regulated) to TX (unregulated). In TX you had to choose an electric company from dozens. They all had various pricing schemes which made it a lot of work to figure out what was a better deal. There are companies who will manage your electricity by shopping month-to-month for the "cheapest rate". This really bit people in the @ss when the grid could not keep up and electricity prices skyrocketed. This is because the rates fluctuated by the hour or even minute.

I agree, it would be difficult for most (including me) to drastically change the amount of gasoline I use. I don't like the idea of being "herded" towards electric vehicles because once they have you in one corral, the slaughter begins.
Texans and many Americans got bit in the a** by the unregulated TX electricity industry last winter when their grid went down for three weeks due to unexpected cold weather. With all those electricity providers cutting cost to compete in a free market and no state regulatory body to ensure adequate capacity and infrastructure is in place to cope the result was no hedge against the weather event. The house of cards went down. The same winter storm did not effect any other state like the train wreck that was TX. Many rail lines, trucking company hubs, and regional distribution centers are sited in TX and with these closed for days or weeks it contributed to the already disrupted supply chains driving up prices for all of us in the demand/supply equation. That's how the rest of America was effected by Texas policy.

Government regulation in the right places is not always a bad thing.
 
Back
Top