Myths about gas prices mask real problems »
Posted By STONERS 1 year, 4 months ago in Business & FinanceWhew, gas prices are high. Higher than they've ever been. During the week of May 21, the Lundberg Survey, a gas price tracking service, put the average cost of a gallon of unleaded at $3.18. Adjusted for inflation, that topped the 1981 price spike that had held the record for 26 years.
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Comments So Far: 65
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STONERS1 year, 4 months ago
"Prices have since slipped a bit, but many predict they'll stay up near the stratosphere all summer. Wondering why? The answers may not be what you think. Here are five common myths about why we're paying so much at the pump."
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Justice4All1 year, 4 months ago
Technology generally brings commodity prices down. But oil is a non-renewable commodity so it doesn't fit the model. When we slip from a 1% oversupply to a 1% undersupply prices will shoot up. That cycle will repeat itself for a few years until technology can no longet compensate. At that point the high price will regulate consumption.
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el-jefe1 year, 4 months ago
Yup, just blame it all on the oil companies.
Study after study after study, many by hotshots wanting to make a name for themselves by bringing down multibillion dollar companies, have failed to find any price gouging. But somehow, you're smarter than they are.
Ok, if you're so damn smart, how much of your 401K is invested in oil companies? If they're doing such a great job of gouging the entire country, that should be an easy way to get rich and retire early, right?
We will NEVER have a workable, sensible, functional energy policy in this country so long as 80% of the electorate believes this crap about "it's all the oil companies' fault".
We may, however, end up having show trials and executions of oil executives who don't pay the right protection money to the right political leaders...followed by nationalization of the energy business, followed by lower prices and severe gas shortages. You know, kinda like a nastier version of Venzuela or something like that.
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Matteu001 year, 4 months ago
The Mercury News isn't called "The Murky News" for nothin.
..high profit levels earned in refining and marketing suggest...contributed earned profits above and beyond the effect of higher crude oil prices. Mergers, acquisitions,...The value of the gross refining margin in 2003 was approximately 7 times the average for the previous seven years.
http://fpc.state.gov/documents/organization/510...
It is also true that the number of operating refineries in the United States has declined to 149 from a peak of 324 in 1981.
~ Fewer suppliers as a result of mergers means less competition means higher prices. The original purpose of the FERC was to prevent price gouging in time of war or natural disaster and to ensure national security by having numerous refiners and suppliers. Since WWII greed and lack of patriotism has resulted in politicians signing off on unprecedented mergers and a near sale to China of Unocal, the #9 company in the US.
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evelyna1 year, 4 months ago
Soon they will not be able to make any more money putting people into debt. What will they do?
Notice how the stores are trying to get people to buy larger quantities to make money for themselves and they are still losing money.
Lose your house, don't eat, but drive. Your car has 4 walls and it can be as good as a home. Why don't they have portable showers?
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el-jefe1 year, 4 months ago
Um, this article was about the price of gas, not the price of credit.
Please direct your rant to some thread about outrageously high interest rates that used to be illegal in most states, the companies that charge them, the lobbyists who just convinced Congress to make bankruptcy harder for most small debtors who lose their shirt, and the legislators who put the interests of the banks and credit companies over those of the average American.
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zplan1 year, 4 months ago
Man, 15% for fuel, plus the car payment and everything that goes along with a car, that's quite a chunk.
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oktoberfest1 year, 4 months ago
Great article. It says what I've been saying all along. The American consumer is the problem. We've got to get more efficient. What better way to get back at the oil companies!
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bubba21 year, 4 months ago
The price of gasoline is NOT the consumers' problem.
Read this info --
http://money.netscape.com/story/2007/06/10/cons...
The oil companies are financially RAPING the consumers.
The media keeps saying that the price is high because there are not enough refineries to produce gasoline to feed the needed supply.
But what the media is NOT telling you is that the oil companies have not only not built any refineries in 30 years, they have shut down many of the refineries that USED to produce gasoline in order to reduce supply and increase prices and thus increase THEIR PROFITS.
http://www.citizen.org/cmep/energy_enviro_nucle...
http://wyden.senate.gov/leg_issues/reports/wyde...
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schmirt1 year, 4 months ago
Yes, we pay the price at the pump one way or another.
The documents you provide suggest a re-regulation of the oil business. The nature of regulation ('de -marketization')will not mean lower gas prices or plentiful supply in the long run. Been there, done that. The documents also suggest more government oversite. Congressional oversite, in my book, has a dismal record.
Dont get me wrong. If the public wills it, I think its ok to make more law/regulation and sift out criminal activity where ever it is. Unfortunately, this does not mean cheap gas in the end.
Let me agree with you about one thing---it is about profits. I am not a fool to think the oil companies are not trying to get as much money from the end user as possible. I do not care for the callous calculations made by executives to increase the profit in refinery operations at my expense. But every thing is at our expense...profits, taxes, regulation, environmental restriction, etc.
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schmirt1 year, 4 months ago
So as we attempt to regulate, tax, and prosecute the refinery market in order to collapse the profit margin of refineries in order to shrink gas prices from $3.25 to $3.10 per gallon, I wonder about the economics of gas production.
In the 1990's, there were a lot better places for a wise investor to put thier money into than the oil business. Oil companies were compelled to consolidate, merge, and layoff employees. America had little to complain about then. Oil companies consolidated existing and avoided building new refineries because they were expensive, complicated, and unpopular. Only sufficient profit margins (and managable risk) could justify the costly process of constructing additional, perhaps better and more efficient, refineries we wish we had today.
In the interest of profits (or greed, if you wish), and if the demand for gas persists, companies will need to build a new refinery eventually.
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PapaWolf1 year, 4 months ago
>>The documents also suggest more government oversite. Congressional oversite, in my book, has a dismal record.
The question, then, is would you rather have the industry or Congress oversee the industry's practices? IMO, at least the Congress would have at least a FEW people more interested in the public's well being & less about corporate profits - at least in their sound bites.
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harriermech1 year, 4 months ago
Yep it's always the same old thing blame Bush and the Republicans. Yes don't blame the left for causing the EPA to hamper our abilities to build more refineries in the US. I wonder how long it would take for green peace or some other wacky lefty group to protest a new refinery. If you want to get an ideal how big the EPA is go to DC and look at the buildings. The EPA has two of the largest buildings in DC they cover 2 square city blocks. This is part of the problem the EPA hurts our ability to grow. I got an ideal tell the EPA to ****** off build more refineries quit having some many different kinds of fuel for different cities then maybe we can get cheaper gas. A company makes some money after years of just getting by and now people are all over them. I bet if someone came up and told you were going to make a billion dollars this year no one on here would turn it down. Yet if a company does it then shame on them.
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PapaWolf1 year, 4 months ago
>>The EPA has two of the largest buildings in DC they cover 2 square city blocks
Are you sure about that? How about the IRS, which goes from 12th to 14th & Constitution to PA Ave - not to mention the new IRS data center that went up in Martinsburg, WV a few years ago? Or the Bureau of Engraving & Printing, which has a few different buildings right around Independence & 14th? Just to name a couple.
And, personally, I'd rather have an EPA than higher mercury content, rivers that catch fire, & air so thick you can see it swirling around cars & planes.
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harriermech1 year, 4 months ago
If you don't like the high prices don't buy gas. Get a bike take the bus just don't push your hippy BS lifestyle on those of us that really don't care. If I want to drive my SUV 100 miles a day and can afford the gas then so what.
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el-jefe1 year, 4 months ago
Yeah, just go on believing whatever you want to believe.
I hear if you believe that you can fly, you can jump off a tall building and actually do it.
Either that, or you'll land on a bunch of greedy, fatcat oil executives who'll cushion your fall.
One of those has got to be true, right?
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angry-ken1 year, 4 months ago
It's ALL the oil companies. Not Bush, not republicans, not consumers. There is no shortage. They are jacking up prices because they can get away with it. I don't have a bus route to work, it's too far to bike, and I can't carpool because no one I work with lives in my area. And I won't buy a hybrid because I refuse to give up the car I love for the sake of less fuel consumption. All drivers need gasoline and the only people who can change this mess are the oil companies.
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el-jefe1 year, 4 months ago
God! Those oil companies are so stupid! Why, they have the power to charge whatever they want...and after all these years, they finally wised up and started charging $3.00/gallon!
If I was an oil company investor, I'd sue management for incompetance...think of all the money I could have made over the years if they'd only had the sense to jack up prices sooner!
Wait a minute, I've got a great money-making scheme. Buy stock in oil companies now, then sue them if they don't raise prices to $4.00/gallon by the end of the year! I can't lose!
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PapaWolf1 year, 4 months ago
>>This would only increase their product cost, thereby raising the price to keep their 8% profit. We pay more.
Didn't you hear the oil execs at a Congressional hearing shortly after Katrina? They all said they didn't need the subsidies that were pushed through for them.
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el-jefe1 year, 4 months ago
Yes, it's very baffling.
Let's see, if I refine a gallon of gas, I make $X a gallon. If the market is bad, X is what, a penny? So then I'd be indifferent about refining...it's not a big money maker.
But if the market is great, X is...oh, say a dollar. A dollar a gallon, and I can pump the stuff by the truckload! So, I'd want to refine all I can at that price, right?
According to your logic, no, I'd want to turn the taps down to nearly nothing so the price would go up and I'd make 2 dollars a gallon. Of course, I'd be selling nearly nothing, and making nearly nothing, but think of the profit margin!
I got it...the economics professors must be in on this vast money-making conspiracy, too! All these years, they've been preaching supply and demand, which predicts that when profit margins go up, people will try to supply the market more because they make more per unit of work. The liars!
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bubba21 year, 4 months ago
The oil companies do NOT want to build more refineries.
They have been SHUTTING DOWN refineries over the past 30 years. Fewer refineries, less gasoline available at any point in time. Then when demand goes up, the oil companies - the same ones that shut down refineries - jack up the prices and gouge the consumer.
Read my post above and the referenced articles.
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bill29361 year, 4 months ago
I live in a city that use to have a refinery running, it was closed done a few years ago becuas ethe equipement was out of date and falling apart and the company that owned it at the time could pay to fix it. The company Then sold it's assests to Fina, that was using the terminal at the closed refinery to distribute gas from another refinery it owned via pipelines. Well about two years ago, Fina wanted to refurbish, modernize and restart the old refinery. Well the usually suspects (Greenpeace, Sierra Club, and the rest) lined up against this project and threatenned lawsuits at every phase, so Fina just gave up openning the new modernized refurbished refinery. Now this is just one case, but I wonder how many more times it has happenned in the US and how that effects the refinery shortage?
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evelyna1 year, 4 months ago
The consumer is not the problem. In countries where gas is $5.00 or more and public transportation is the norm-the price of gas should go down because the demand is much lower. Then why doesn't it?
My point was the government co-conspires with the corporations to rape the american public any way they can.
After storms or hurricanes price gouging is not allowed(suppose to be a crime). What is price gouging, usury, bait and switch,loan sharking, and soon to come debtor's prisons I suppose. None of this is illegal now.
People walking 100s of miles will not change the price of gas.
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schillinfl11 year, 4 months ago
Incorrect sir.
The hydrogen car would be alot more expensive than a regular car. This all about economics, not conspiracies.
http://www.wired.com/cars/energy/news/2003/10/6...
http://www.msnbc.msn.com/id/4563676/
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saneman1 year, 4 months ago
According to your first article, they stated that the only known process of getting hydrogen gas is from natural gas. What a crock of sh$t. For over 80 years, hydrogen gas has been generated from the electrolysis of water. The problem with your little article is that they are looking for somebody to make a bundle of money for generating hydrogen gas when the process was first patented in 1926. Refueling stations aren't needed. Electrolysis of water can be done in one's own garage.
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royal-m1 year, 4 months ago
At the end of the day none of the whys matter...When you are on a budget and have to drive high gas prices suck the air out of your spending money......It is not good for the economy and not good for families...and will eventually be one of the things that deflates the artificial boom we are experiencing right now....
and only a retard would desire to leave the solution entirely to the people who are making billions off of the problem...They will have to be part of the solution but they shouldn't have a choice in the matter
and as to this whole if I can afford it so ...so what if gas is $5 a gallon...I can't say what I think about that in a public forum ....
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4cprocess1 year, 4 months ago
I sunk this story but felt the need to explain why. Even though the author makes a lot of good points, but when it came down to the myth about more drilling and refining the author did not adress these topics but simply went into a totally different direction, "conservation".
I truly believe from everything I have read and understand about this issue is that not only do we need more refining capability but we really do need to find a way to aquire a greater percentage of our oil from right here in the US. I haven't seen one article denying that these oil supplies do not actually exist here.
I'm not saying conservation is not important, it's just the facts that knowing we haven't built a refinery in 30 years and knowing that additional oil supplies exist on our very soil seems to prove that we just continue to pursue the remedy for this issue with bliners on.
In God We Trust
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bubba21 year, 4 months ago
You expect the Democrats to "undo" in 5 or 6 months what it took the Republicans 12 YEARS to screw up.
You should know better, but apparently not, which is not surprising ...
And, Gonzales should either resign or be impeached. He is a criminal and a puppet of Bush and the Republicans and he has NO business running ANY government department, let alone the Justice Department.
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4cprocess1 year, 4 months ago
A great cartoon that should appear on the front page of the Washington Times editorial page should be one of an Arab Woman that has a suicide belt stapped to here body clutching an American baby who is nursing her breast that has the world "oil" in bold letters tattooed to it!
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Countryhick1 year, 4 months ago
Blame those guys , let me see what are they called , Commodity Traders , driving up the price .
Again STONERS , you never stop , stock prices down for you ?
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dunkirk1 year, 4 months ago
And as the article says gas prices have doubled in the last 5 years. Im curious has China suddenly started requiring more oil, enough to affect prices, in JUST the last 5 years? While the article posts some plausible theories on the cost of gas they ALL existed before and suddenly around 5 years ago they all started to affect the cost of gas significantly?
Hmmmmm.
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schillinfl11 year, 4 months ago
"Im curious has China suddenly started requiring more oil, enough to affect prices, in JUST the last 5 years?"
The answer is yes. Their damand has more than doubled over the last 4 years, with that number increasing every month.
http://www.eoearth.org/article/Energy_profile_o...
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dunkirk1 year, 4 months ago
Interesting yet the following says
In 2005, China's crude oil imports rose 3.3 percent year-on-year to 127 million tons, a growth rate 31.5 percent lower than 2004, according to sources with the Ministry of Commerce.
http://www.china.org.cn/english/2006/Jan/156678...
That tends to say they didnt have as big of an effect as implied. In fact with that the cost of crude should be headed downward as the demand was reduced. YEt that wasnt the case.
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