Gas prices

[Evan!]

This is and isn't a "what the market will bear" situation [...] increase the price just to the point of pissing the world off where the alarms for R&D for alternatives may be fiscally the right decision. then lower it back down to control the mob. expect to see this going on for years to come.

So, it's not about what the market will bear; but it is about stretching the limits of the market until it begins to rebel and search for alternatives, then backing down from there. Huh? How is that not "what the market will bear"? I realize that it's a very complex situation including foreign regimes, OPEC, etc. But let's say, for example, snickers kept raising its prices until a candy bar cost $7. But people still like snickers, so they would pay $7. But any more than that, and people start looking for some kind of alternative to snickers...some kind of off-brand blend of peanuts and caramel and chocolate. So they don't dare go past that point. It's the same deal with petro, just more complex and not quite free-market due to OPEC and the massive taxation at all levels.

Increasing the price to just short of the market's breaking point is the same thing as "what the market will bear".

 

[user 574]

(hoping mods aren't thinking this is getting hostile, IMO it's interesting chat)

Evan,
Very true it still is market bear however when your revenue product, in this case oil is also a component of your operating expense via your vendors; and that includes everything anyone buys whether it is a component of the product, it's packaging or the delivery of and you increase your sale price your expenses also go up. If snickers bar prices increase until volume of sales start to slow to see what the market can bear, your expenses don't also go up at the same time. Won't drive into that too deeply as I'm sure you see that, but will give you a example of kind of sticking it back at them a wee bit and how we took this opportunity to increase our own profits.

Our company (5b revenue) sell various products to corporate oil gas stations across the world (amongst other industries). When we hit oil with a rate hike (18% over 24mo) one took issue with that and threatened to head to the competition but they're increase was 24%. We had the canned letter at hand to explain industry increases in transportation, plastics & raw petroleum to mfg chem and stats that all these increases were higher than our 14%. But, our actual costs were not 14% but more like 8% thru other cost savings efforts. We took this opportunity to price accordingly to cover expense & increase our own profits. I'm sure our suppliers did as well where they could. We did this to hospitals, hotels, grocery, airlines, cruiselines, fast food, dairy etc in variace % increases. They'll then pass this on to the consumer.

So even if you ride your unicycle to work everyday, everyone is hit with the affect of the price per barrel unless maybe you live in the woods and trade pelts. Some just more than others. The oil industry is probably more powerful than most countries (all?) on how they could affect the economy thru reckless behavior.

 

[desiderata]

We all need to implement more of these in our society. this will help the obesity problem as well as the (well, not so much) the oil problem.

 

[fifelee]

(hoping mods aren't thinking this is getting hostile, IMO it's interesting chat)

DIDO

desertbrew,
Everything you are saying about oil being integral to everyone’s life is true, but what is your solution? I hope you would agree more government intervention and regulation would only make things worse. But less government regulation and less tax will make it less expensive for the consumer, easier for new companies to start up, and easier for new ideas to be implemented.

Earlier Quote:

Why don't we invest deeper in alternative fuel research?

From what I can see we are. Ethanol is exploding. Windmills are popping up all over. I have heard rumors of huge tidal projects. All the auto companies are looking into hydrogen. In fact the sales of fuels cells and solar panels have skyrocketed. People said it was impossible, but a fusion plant is being built. There is even a new bread "safer" nuclear reactor that can produce hydrogen in spades. Hell if you want an uplifting read and a roundup of alternatives check this out. There is even a story about beer (now we are legit).

I am not sure why everything has to be a conspiracy especially when it comes to oil. The high oil prices have made a lot of the alternatives suddenly cost effective. I am not worried one bit about our future because I have confidence in the free market. When someone can make money selling something other than oil it will happen and we are already seeing hints of it all over the place. Even “big oil” is jumping on the bandwagon. “Big bad oil” might even be our saviors, as they to will look for alternatives as oil supplies dwindle. I don't know what it is yet, but I think we are on the verge of something big thanks to the free market.

 

[z987k]

We all need to implement more of these in our society. this will help the obesity problem as well as the (well, not so much) the oil problem.

I looked around that website and I saw their windmills. I figured out that it would only take 13 months to pay one of those off in the savings you get given my current elec prices. Now only if I didn't live in the city, an apartment and had $700.

 

[boo boo]

10 percent is a normal profit for most companies. Why is it suddenly wrong when oil companies make profits? What do you propose be done about it?

I say invade Texas.

 

[user 574]

No solution from me, just parroting the analyst write-up that since the middle east and south america are sitting on enough oil to supply the world (& cheap labor to drill) for quite some time still that they know not to go too overboard on increasing price. All that'd do is have the world get much more aggressive on researching alternative resources than we are today. They don't want us in the "urgent" mode of R&D. So oil wants to keep this R&D effort in balance. I see no problem with that either personally.

An example, we spent about 2m on reformulated some of our higher moving products so that there was no or less petroleum involved. We're still spending around that much this year on R&D but if petroleum continued to outpace our pricing, we'd probably dump 10-20m in R&D to get there faster.

Another component mentioned and this mainly is related to pump price is if for short durations (3-6 months) the price per gl increases say to $3.50 - $4.00; they'll increase production later and drop down to say $2.99 and all of a sudden we feel good about that price even though it's still .75 more than we were paying before the increase began. It slows the outcry by the populous to search for alternatives (or drilling further in AK, Canada or invading TX ) but they just bumped up their profits. I don't think oil is evil either...

 

[Denny's Evil Concoctions]

This says it all:

Edit: What the hell? It won't display.

Just click here then: http://carcino.gen.nz/images/index.php/00b9a680/622db4e9

 

[LS_Grimmy]

1.225 per Litre or 4.655 per gallon here in Victoria British Columbia...

 

[sAvAgE]

2.50 I am guessing is by the gallon?

Try 1.06 a liter in Alberta Canada. and in Vancouver it is 1.26 per liter

 

[RichBrewer]

We filled up or stinking minivan this evening and it cost us $75.00. The tank wasn't even empty! $3.19 a gallon! Big wake up call for me and I've hit my limit.
I came home, dug out my bike, aired up the tires, and I'll be riding it to work for awhile.

 

[The Pol]

This is becoming quite rediculous... last summer oil was $76 a barrel when we had gas prices this high... today oil is $63/barrel. Time to just stay home on the weekends and drink all day in the sun... oh yah.

 

[Onescalerguy]

3.74 per yesterday on POW Island, Alaska.Frickin' ouch!
Cheers

 

[BarleyWater]

I live about 5 friggin miles from citgo and exxon's distribution facilities and am still paying almost $3 a gallon. I got a new bike last year, and have never gotten so much use out of a bike since I was a little kid.