A new take on fuel prices

[GCross]

This maybe off topic but this is the only thread I read regularly. First off I'm as unhappy with the fuel price increases as the rest of you. That being said I was just kicking around a few thoughts.



1. We all complain about gas/diesel prices because it's something we have to have. On Friday I bought a bottle of water at a consession stand in an office building, $2. 75, yeh, I know I didn't have to buy it, it was not a necessity, but I'm looking at cost versus profit here. This water although touted as being from some spring, the small print revealed that it was filtered city water. I would guess that 16oz of filtered city water plus delivery and a plastic bottle cost $0. 50 (or less) which leaves $2. 25 profit.



2. We all have our individual inflation rates depending on what we buy and how much our salary has increased in time, and althoug this may not apply to all, but I'm sure it will for many, When I started driving in 1959 (I was in High School making $0. 75 an hour) the cheapest gas I could find was $0. 25, so I could buy 3 gallons for a hours pay. When I started working full time in 1960 I made $1. 25 an hour so I was up to 4 gallons per hours pay. Today I can get over half a tank for an hours pay (of course this is changing daily as prices increase). Also remember cars of the late 50's only got 10MPG (if you were lucky). To calculate, in 1960 4Gals x 10Mpg= 40 Miles. Today 18Gals x 17Mpg = 306 Miles. Result, today I have a 266 mile advantage. Of course the downside is the car I had in 1960 cost me $100. 00, this truck was $32,000. 00



3. Who are the real gougers? The cost of a barrel of crude has reached $55. 00, the reasons why are many and complex and beyond the scope of this post so I won't bore you with that. A barrel is 42 gallons so 55/42=$1. 31 a gallon. Much of this oil has to be tranported thousands of miles, then refined, and trucked the local fuel station. I don't have any idea how to calculate the cost of that but the point I wanted to make is that when you crunch the numbers I think you will agree that the profit for the oil companies and the station operators is far less than the hidden $0. 50 a gallon (varies from state to state) we pay in tax (which one presidential candidate wants to raise another 50 cents. )



In conclusion, U. S. consumers have has always paid less for fuel than in Europe and Asia, partly because we produce some of it ourselves, (althoug less and less over the years) and because all crude is traded in U. S. dollars. Saddam wanted to change this and trade in Euros which would have made oil more expensive for us, a Euro is currently about $1. 25. Did this have anything to do with his removal?



Also posted on Diesel Ram Forums.



-George-

 

[Gary - K7GLD]

"1. We all complain about gas/diesel prices because it's something we have to have. On Friday I bought a bottle of water at a consession stand in an office building, $2. 75"



Not to rain on your parade - but *I* personally get REAL annoyed by fuel cost examples that compare fuel prices with bottled water - or what Europeans have to pay...



Sure, LOTS of liquids - a good bottle of Scotch, fine perfume, etc. , will cost more per gallon - but those are PURELY apples/oranges comparisons - and I personally, don't CARE what Europeans are willing to accept as a society for government control and pricing at the pump - we fought a war a couple of centuries back to NOT be like they are, and *I* will do all I can to keep that difference alive and well!



VIVA LA DIFFERENCE! Oo.

 

[DavidC]

We have not heard complaining until we find out our chinese shoes only last a week and we use 20 gallons of water on the walk to work. Comparing food, water, bathroom cleaner etc. is a worthless cause. Some of these items are needed for life. Oil keeps my feet from getting sore or having the city hire pooper scoopers for the horses. If some one could come up with a viable fuel alternative all the legilators would probably go broke with thier oil stock holdings. I would bet if there was a way of checking how many government officials have stock in oil you would see some impressive numbers. The higher the barrel price numbers the more they are making. An alternative fuel may be here but I do not hear of anyone looking at it http://www.unh.edu/p2/biodiesel/article_alge.html



Dave

 

[klenger]

GCross, I think you are right on.



After the energy crisis of the 70's, we were appalled at what we had to pay for gasoline. For over 20 years after that, fuel prices have been flat, and at times the oil companies were suffering from a real glut of oil. Now prices are adjusting back to what they should be (given inflation over the last 20 years), and now we're all mad about it again. Why do we complain about gas/diesel being twice what it was almost 30 years ago, but we don't seem to mind paying over 4 or 5 times as much for the vehicles we put it in?



BTW, I am in no way affiliated with the oil industry, but hopefully, some of my mutual funds have shares in oil.

 

[jsimpson]

Like it or not and believe it or not, the world IS running out of oil. Our prices ARE low, and they AREN'T gonna stay that way. The Saudi kingdom that we've been propping up and which supplies aover a third of our oil is in serious trouble with Islamic radicals. Venezualan oil interests are under seige by leftists. Russia is becoming increasingly independent of our wishes. China and India are growing their oil consumption faster than new oil can be produced. We're in Iraq NOT because of weapons of mass destruction, unless you consider oil blackmail to be mass destruction (I do). Saddam was methodiacllly trying to take control of oil producing countries and we simply could not afford that as a nation. But now the radical Islamics worldwide have our number and are going to do everything they can to disrupt our oil supply and bankrupt us. Get used to high prices and fuel scarcity or set up a bio-diesel operation.

 

[BRuppel]

i would also attribute our rising fuel cost to the amount of hurricanes that hit the Gulf of Mexico this year. there are LOTS of oil rigs out there and most of them were shut down and damaged during the hurricanes.

 

[jsimpson]

Bruppel, you're right: the hurricanes are responsible for a temporary spike, but they contribute only a small fraction of the oil we use.

 

[bombero]

When a oil company gets a 42gal barrel of oil in its refinery{should build lots more of them but who wants one in their backyard) They start heating it up. The first thing that come off are the lite ends like propane. Then as they heat it: gasoline, kerosene, diesel, oil, and finally tar is produced out of that 42gal barrel So dont think that in any way that 42 gal of light crud means 42 gals of diesel/gasoline. The oil companies are ----- way more than most people know.

 

[Tony T.]

Speaking of the average Joe is not going to have the time to brew his own alternative fuel, he's to busy trying to earn a living for his family. The term gouge, or gouging definiton meaning to chisel for cutting grooves or cut out with a scooping motion can also be used by the oil company's an there investers toward us. We use the term there chumping us an they use the term back at you. I believe there have been way's for years to conserve our oil resourse's, ways of alternative fuels an higher mileage production engines, but these company's would find the way to do a buy out. They then have the rights to the invention or product that would help the average Joe. This in turn the companys an investers see this putting a large damper on there business if such a product ever got out on the open market. The oil company's were set up to make money a $20 bl none to say $50 bl plus. This is extra icing on the cake the way I see it. I believe the technogly is there to make it better, but that would be shooting themselves in the foot.



I seen a man a few years ago on TV that had come up with this home generator system that connects to the average house an not remembering all the details on how it worked,it seemed very well engineered on making ample amount of electricity for the average household an selling the remainder back to the electric company. All of a sudden have not heard any thing else about it, maybe it was a flop or maybe a buy out, who knows.



Looks like to me if there is such a scare that our oil is about gone then why hav'nt the gov't wanted to do something about it years ago. Tree-huggers hmmm! don't know.



Why is it that at 8 am price is at $2. 099 an at 12 pm it's at $2. 179 if no transport has delivered the product.



I think a lot of people would look at it as a gouge.



It's hard to understand it all,but my excuse is I'm just a average Joe.





Tony

 

[KBennett]

What I don't understand is how prices can fluctuate so much



The prices go up and down 10-20% in one month. How can this happen? Why can't we just have a 5% per year increase and call it good?

 

[Carlsummers]

One can make all the excuses/reasons they want for the price increase, but when diesel goes from $. 10 less than regular to $. 10 more than supreme in a matter of weeks, it shure as **** looks like gouging to me..... from $1. 699 to $2. 299 in 6 weeks, and it's increasing about every other day... . don't feel sorry for the oil companies a bit... and don't kid yourself, they ARE making one heck of a profit, or they would not remain in business..... it's called Capitalism.....

 

[53 Willys]

Any one else notice as the price increases ( $ . 40 +/ gal In two weeks) That milage is dropping? Mine Has

 

[jersey diesel]

Price?

A lot of what is said is true, butthe cost of diesel fuel has always been lower than the cost of reg. gasoline. Only in the last four years has the price escalated into the high prices we have today. Also, isn't diesel one of the cheapest fuels to refine? Aren't the oil companies the ones who for years lobbied against the formulation of alternative fuels sinc Jimmy Carter tried to start the initiative fo alternative fuels in the seventies? The Technology exists for cars to run on water and not pollute the air. We are told the cost is to high to produce this, but like everything else, as demand increases, the technology improves and the price comes down due to compa tition. That is capitalism at its finest.

 

[WyattEarp]

Im sorry to say it but i disagree with you jsimpson on the oil running out due to the news on reuters that i pasted and posted here about a week ago, the Saudi oil minister said and i quote *THERE HAS NEVER BEEN A SHORTAGE OF OIL AND NEVER WILL BE A SHORTAGE OF OIL* end quote, if i can find my posts that i put up i will post them again as that comment took me by surprise also as everyone else seems to say and think that like you jsimpson the oil will eventually run out but obviously the Saudi oil minister must know something that very few pple know...

I didn't mean to come over sounding harsh but i just wanted pple to know what i read and had posted, like i said if i can find that post i will repost it if i can. .

 

[WyattEarp]

Here's the quote that i read.

(We are pumping around 9. 5 million bpd now, and if our customers want more crude it's available," Naimi said. "There is no shortage of oil, and there will be no shortage of oil, and we are willing to meet demand as it rises. " ) THIS IS FROM REUTERS NEWS THAT I COPIED AND PASTED TO PUT HERE... So now who wants to argue with me that were not getting it put to us like there isn't no tomorrow. This Naimi is the Saudi oil minister.

So these 10 members of OPEC that they also refer to as a Cartel(sounds like drug cartel to me) can basically either flood the market or they can starve the market anytime they want.

 

[jsimpson]

You can take the Saudi oil minister's word for it even though he has a vested interest in keeping America unafraid of the oil supply drying up (we keep the kingdom in power), or you can read this:

http://www.newyorker.com/fact/content/?041011fa_fact

 

[GCross]

JSimpson, good article from the New Yorker. Doesn't sound like we'll be seeing energy independance any time soon. I think what will happen (maybe not in my lifetime) is that oil will become so expensive that it will make investments in new technologies viable. Science and technology will prevail if money for reseach becomes available. Who knows where it could go, Solar/electric, Hydrogen from water, Atomic. Not possible now, but 100 years ago you would have been called a lunatic if you suggested going to the moon, but with money and determination we did it.

 

[y-knot]

I can not do a darn thing about the price I have to pay for diesel or gas, and most others can not do anything about it as well, we are stuck with what ever the price happens to be that day. Yes the world is using up it's resources at an alarming rate, and yes they will not run out in my or your lifetime, but i still worry about my sons lifetime or his. Only recently have the automakers started to produce better more gas efficient cars and trucks. There are several Hybrid models to choose from, and just this year Honda made the Accord with it's V-6 engine available as a hybrid model, one that goes as well as it saves fuel. The current conditions have everyone worried and interested in the feature, I hope this brings about more manufacturers willing to invest the effort to produce many more alternative and fuel conscious vehicles. The diesel is making a come back in the car and small truck/SUV markets. VW seems to have taken the lead in this area with several models available with the diesel engine, all of which get great mileage. Also Ford will bring out it's new V-6 diesel for those who do not need a 2500 or 3500 series truck, but would still like to reap the benefits of improved fuel mileage, I applaud their efforts and hope Dodge and Chevrolet take a similar stance as well. Many manufacturers are offering new technologies that will change forever the way engines operate, Variable Valve Timing, Multi-port and Direct Port Injection Systems, Variable Cylinder Management System and many others are changing todays engines for the better. Hopefully this work will continue and we make our selves more and more less dependent on the worlds oil supply. If the fuel prices hadn't gone back down in the late 70's-80's we would have already been their by now, people would have been more conscious about the vehicles then choose and the manufacturers would have pursued better more efficient systems.

I often feel sorry for the guy's with large gas engine equipped trucks and SUV's. I see them at the pumps where they do one of two things. Fill the tank and cringe at the $80-100 bill, or they add $10 bucks hoping that makes it for another day. I do not drive much, so I don't have high weakly fuel bills, but I know several guy's that spend over $100 a week on fuel too and from their job! Fuel is the one thing we have to have, no matter the cost. You still have to commute to work no matter what happens and when the price goes up, the extra money it takes comes right out of your fun money funds. The money you use to entertain and go out on, or perhaps to buy parts from. As that money dries-up, you are forced to stay home, which means less money for the restaurants, movie houses, major appliance people and basically everyone that sells a service or product, so the economy takes a plunge, people get laid off, businesses close and we all suffer.

 

[JBlock]

I have to agree with BRuppel.



I work in oil patch. I saw the photos of significant number to rigs in the Gulf of Mexico that were destoryed, the damages to those rigs are going take few months, not days, to be repaired. The guys out there are good, maybe some rigs will start producting on line in a few months, but between destoryed causeways and rig it a sad sitution.



JB

 

[Gary - K7GLD]

An interesting headline in today's news revealing that serious concerns about rising fuel costs effect on the GDP and economy in general have INSTANTLY brought the price of crude down by 3%...



http://cnn.netscape.cnn.com/ns/news...2390002273796&dt=20041018123900&w=RTR&coview=



Any of you STILL insist high fuel cost is purely a matter of uncontrollable production costs - or are you coming around to the "price at what traffic will bear" philosophy?



You'd have to be pretty much brain dead to not realize MUCH of current fuel pricing - both per-barrel pricing at the well, and what we see at the pump are LARGELY manipulation by those with the power to do it!



The old "Golden rule" still applies - those WITH the gold, RULE!



The REST of us simply PAY!