Diesel Prices affecting choices?

[Gary - K7GLD]

Only "up side" to high fuel cost, is that other items now seem cheap by comparison...



I just installed a new DTT stainless steel intake tube on my truck - doesn't seem nearly as costly, when rationalized against the cost of 2 tanks of fuel...

 

[AKaiser]

The shrill and vocal defenders of oil company operation and associated commodities speculators might just see their chickens come home to roost, if THEIR investments go south thru the contortions of this countries economy and it's collapse - taking THEM and their savings with it...



Standing to one side, smuggly aloof and insensitive to what our country is going thru, and to the damage inflicted upon neighbors and friends may well come back to haunt - and I seriously doubt the oil companies or commodities traders can be counted upon to toss them a rope - unless perhaps it has a noose on the end of it...

While there may be some truth in what you say, I think the truth may lie somewhere closer to our banking industry, among other things.



Here's something to ponder.



From "Riots May Kill Inflation"

by Todd Stein & Steven McIntyre

The Texas Hedge Report

April 23, 2008

Texas Hedge Report



Excerpt found on Kitco - Commentaries - The Texas Hedge



Over these last few years, the U. S. economy has experienced what we would call “controlled” inflation. We would say that inflation has ranged somewhere between 5% and 10% depending on one’s consumption of fuel, medical care and collegiate education. Why this has not sparked outrage among the citizenry is twofold. First, bogus government CPI numbers as well as politicians & journalists blaming oil companies have helped distract the public.



Unfortunately, the fate of the American investor class will not be determined by American politicians or companies. Asia’s insatiable appetite for natural resources has been a recurring theme in the financial media over the last few years. Since most commodities are traded in dollars, Asian consumers have had to deal with the same commodity price inflation that their American counterparts have. This will continue to be the case until Asian governments revalue their currencies versus the U. S. Dollar. Until now, this hasn’t really happened because the Asian governments (especially China) know that if their currencies appreciate versus the U. S. Dollar, then demand for their exports will soften. Softer demand from the Wal-Marts of this world means that Chinese factories may not operate at full capacity which could trigger Chinese unemployment. This would be a major no-no because Chinese leaders understand that a little inflation (the current situation) is preferable to millions of unemployed young males. Governments tend to have trouble surviving in high unemployment environments. "



Chew on that for awhile, and read the whole article.

 

[AKaiser]

Besides, if it hadn't been for the outrageous fuel prices, based on $100 + per barrel oil prices, would the oil companies be announcing that they're finding huge amounts of crude oil in the western hemisphere (Brazil and the US/CAN northern plains)? $30/bbl oil doesn't pay the development costs needed to drill these more expensive resources. It will take time, but there's probably more oil in the US/Can that's untapped than there is in Saudi Arabia. Add the Carioca and surrounding Brazilian region oil finds, and there's easily double that. It takes money to drill oil.



Like the old man told me last month about grain prices, "High prices are the cure for high prices. "

 

[Gary - K7GLD]

Invest the time to watch this video series:



YouTube - Broadcast Yourself.

 

[TAbbott]

K7GLD said: "Just like the trucking industry, why should they care what the price of diesel is, if all they have to do is pass that price increase on to the shipper and consumer?"



If only it were that easy. Trust me Gary, they care. The flaw in your logic in this case is that while the oil companies may not be competitive (a cartel) and just immediately if not sooner pass through their price increases, truckers definitely are in a competitive business and shippers, even though they understand fuel costs are rising, are also involved in competitive businesses and need to pay as little as possible to get their goods moved.



There is going to be a lot of fallout from these fuel prices, among them a reduced capacity to move the freight due to there being less trucks around to do it.



Many independent truckers and smaller companies just aren't gonna make it, at which point the general public will really see the price increases reflected in everything they buy, because the remaining truckers will then be able to raise their prices to pay for not only their current costs but also to recoup what they lost staying alive to get to that point.



It's the natural cycle of things in an essentially deregulated (at least from a pricing standpoint) industry. This whole situation is going to get worse before it gets better.

 

[Gary - K7GLD]

K7GLD said: "Just like the trucking industry, why should they care what the price of diesel is, if all they have to do is pass that price increase on to the shipper and consumer?"



If only it were that easy. Trust me Gary, they care. The flaw in your logic in this case is that while the oil companies may not be competitive (a cartel) and just immediately if not sooner pass through their price increases, truckers definitely are in a competitive business and shippers, even though they understand fuel costs are rising, are also involved in competitive businesses and need to pay as little as possible to get their goods moved.



There is going to be a lot of fallout from these fuel prices, among them a reduced capacity to move the freight due to there being less trucks around to do it.



Many independent truckers and smaller companies just aren't gonna make it, at which point the general public will really see the price increases reflected in everything they buy, because the remaining truckers will then be able to raise their prices to pay for not only their current costs but also to recoup what they lost staying alive to get to that point.



It's the natural cycle of things in an essentially deregulated (at least from a pricing standpoint) industry. This whole situation is going to get worse before it gets better.

I wish you were correct - but here's a sample post - from a truck driver on THIS board, in another related thread:

I'm a trucker and fortunatley the company I am leased to has excellent rates so I'm not suffering from the fuel prices like so many others are. In fact because of the fuel surcharges we charge I basically get my fuel for about 60 cents/gal.



However the majority of Owner Operators don't have much say in freight rates. The companies they are leased to, or the brokers set the rates and in most instances they can't be changed.



I personally hope the price of fuel continues to rise, since eventually I won't be paying anything at all for my fuel, my customers will. That, at the end of the day means you, the consumer.



The smart ones don't support strikes or slowdowns or whatever you want to call them, nor do I. We raise our rates if we can or seek out companies that compensate fairly. Either way, you the consumer pay more.

The above quote, direct from a big-rig driver, is similar to others I have heard - AS LONG AS they are subsidized for their fuel expense - or allowed to pass that expense to the shipper or customer, they remain relatively indifferent and isolated from fuel pricing increases - and will ONLY become concerned when FINALLY their OWN retail buying, and that of close friends and family gets out of hand!



But what about the REST of our society in the meantime?



Another similar poster in another thread on this board openly gloated that high fuel prices were effectively weeding out his smaller operator competitors, as THEY went broke and left more business for him and his company - just as the larger oil companies either buy out independent competitors, or force them out...



But when fair competition is eliminated, a monopoly takes over, and the CONSUMER pays - whether that monopoly is a trucking company - OR an oil company...

 

[Regcabguy]

No sale.

Kinda off topic a bit,but the young man next door is a salesman for Jimmy Johnson Chevrolet here. He hasn't sold a Duramax in quite awhile,in fact he hasn't sold a single fullsized truck in awhile either. Meanwhile, yesterday I saw an auto transport carrying a full load of Smart car deathtraps in the vicinity of aforementioned dealership. Really sad. I'm thinking of taking the wife on the "Last Great Vacation " soon while we can afford it. The quote I'm so sick of is,"Well,Europe's been paying high fuel prices for years,we're just catching up!" I try to explain that that pays for their socialistic system of government and rationed healthcare,but it seems to go right over their head.

 

[FLynes]

... The quote I'm so sick of is,"Well,Europe's been paying high fuel prices for years,we're just catching up!" I try to explain that that pays for their socialistic system of government and rationed healthcare,but it seems to go right over their head.

You are most right... I have family in Europe, and when I've gone there and rented a car, I can't believe that those people are paying that much.



Of course, if either Hillary or Barry get elected, we'll have socialized medicine too!