Fill er up, Ayatollah

[The Big Ragu]

http://news.bbc.co.uk/2/hi/middle_east/6243644.stm

This is just fascinating...

Everytime gas prices go up and people come on here screeching about gouging, I post about refining capacity and supply and demand and it's like talking to a wall, because the same thread that ignores the facts inevitably gets started a few months later.

Well, either Exxon-Mobile is gouging the hell out of the people who actually produce the oil, or it's really about refining capacity and supply and demand.

It's just amazing that the people who produce all of the oil don't have enough gas and there are riots. I find it fascinating.

 

[Bubbler]

"Guns, fireworks, tanks, [President] Ahmadinejad should be killed," chanted angry youths, throwing stones at police.

Who knew Rudy from Bachelor Party moved on to Iran? [/lameBachelorPartyline]

 

[Simon_Cowbell]

http://news.bbc.co.uk/2/hi/middle_east/6243644.stm

This is just fascinating...

Everytime gas prices go up and people come on here screeching about gouging, I post about refining capacity and supply and demand and it's like talking to a wall

The U.S. companies' pure profit is higher than it ever has been. End of story.

 

[alleyallen]

Rags, if you want to argue the premise of WHY the prices have gone up, even in the face of record oil company profits, that's fine. Hell, I'll even concede to your argument in that regard.

Doesn't change the fact that it's like bleeding my bank account every time I have to fill up my car. In the end, my bank account doesn't care if it's supply and demand, production, or gouging. It's smarting from beginning to end.

Fascinating, indeed.

 

[Ralph Waldo Henderson]

I'll echo Alley.

Ragu --- and you know I'm lockstep with you on that other thing --- but on this I'm not sure you quite understand the other side. You live in a big city, right? How much driving do you do? (Serious, not rhetorical questions.)

Those of us not fortunate to live around public transportation, and who have to drive extensive distances for work (i.e. road games) have been getting killed for awhile by the prices. But people in metro areas appear unsympathetic, and that's unfortunate. As Alley once said, we're drowning and you're describing the water.

If we go ahead and grant that it's refining capacity, supply and demand, the free market, etc., do you at least agree that something must be done? Those of us not in metro areas don't have the option of subways, busses and carpooling, most of us can't afford a hybrid car yet, and to my knowledge there's no electric car on the market yet.

Any solutions?

 

[ThomsonONE]

Supply and demand is a two sided equation. Price squeezes can happen because of a disconnect that starts on either side. All the talk about supply being restricted here in the US due to a lack of refinging capacity is pure nonsense. There is no gasoline supply shortage in the US. NONE! If there was a shortage, there would be odd/even rationing, "NO GAS" signs etc. Every gas station in the country has all the gas it's tanks can hold. Every consumer that wants to buy gas can get all that he wants, neither of those conditions can exist if there is a real supply shortage.

The US has all of gas it needs, when was the last time anyone here went to buy gas and couldn't get it? The oil companies are gouging, plain and simple.

 

[Guy_Incognito]

Rags, if you want to argue the premise of WHY the prices have gone up, even in the face of record oil company profits, that's fine. Hell, I'll even concede to your argument in that regard.

Doesn't change the fact that it's like bleeding my bank account every time I have to fill up my car. In the end, my bank account doesn't care if it's supply and demand, production, or gouging. It's smarting from beginning to end.

Fascinating, indeed.

The joke is that the politicians who are screaming about this could easily make things easier by temporarily suspending the state taxes on gas, which is a huge chunk of the price we pay.

 

[alleyallen]

I guess what I'm trying to say, Guy, is when it comes to my financial bottom line, it makes little difference the REASON why.

Like Heinlein wrote in Starship Troopers, it doesn't matter if you buy the farm in a police action or a war. You're still dead.

 

[The Big Ragu]

Ralph, I do some driving, but I don't live in the car the way many people on here do. So I don't get hit as hard by gas prices as most people, even though I am not entirely immune. Believe me, where I live, I get raped on some things that other people take for granted, though.

Alley, The impact of high prices on people and the reason for high prices are two different discussions. If the natural resource was plentiful and refining capacity could keep up with demand, gas would be cheap. It really does boil down to a limited resource, worldwide demand that has shot up like crazy in the last decade, and an inability to turn the natural resource into the highly-demanded fuel. There is competition in the oil exploration and refining businesses. No single company can dictate gas prices unless the oil companies are colluding, and there is plenty of evidence they not colluding--including the supreme court decision last year that unanimously found they are not. The facts just don't spell out "gouging." The average oil company earns 10 cents on a gallon of gasoline. If you live in New York, as I do, when you add up the Federal and state taxes, you pay 68 cents a gallon in tax. I completely understand your frustration. It sucks. But if you really believe gouging--and not supply and demand--are what are hitting your wallet, is that 10 cents a gallon the culprit? Are you outraged by the government "gouging" you far worse than the private company that is in business to provide a service and maximize profit (no one complains when any other businesses behave that way)?

 

[alleyallen]

Wow...Rags, I'm sorry, but what part of my above post included rationalizing? I said my bottom line doesn't focus on the why. It simply focuses on the impact. Since there's little I can do about both, it feels like being a victim.

I don't need an economics lesson. I need relief. Plain and simple. Let the brains figure out how to do it best.

 

[The Big Ragu]

Alley, Huh? Not sure what you mean by rationalizing. Not sure what you are apologizing to me for either... You completely lost me.

 

[wickedwritah]

Interesting. The article says Iran subsidizes 80 percent of the cost of petrol, and that it costs about 11 cents per liter there.

That means that the real cost for petrol in the country is about 55 cents per liter, or $2.10 per gallon.

Still a bunch cheaper than here, where we actually have refineries and whatnot.

 

[alleyallen]

Alley, Huh? Not sure what you mean by rationalizing. Not sure what you are apologizing to me for either... You completely lost me.

Wasn't apologizing for having an opinion. I was apologizing because it's clear you didn't understand me when you went on a lengthy discussion about the economics of it and my post was simply a matter of "I care not why, I only care how it impacts me."

Don't know how to be any clearer than that.

 

[statrat]

Rags, if you want to argue the premise of WHY the prices have gone up, even in the face of record oil company profits, that's fine. Hell, I'll even concede to your argument in that regard.

Doesn't change the fact that it's like bleeding my bank account every time I have to fill up my car. In the end, my bank account doesn't care if it's supply and demand, production, or gouging. It's smarting from beginning to end.

Fascinating, indeed.

The joke is that the politicians who are screaming about this could easily make things easier by temporarily suspending the state taxes on gas, which is a huge chunk of the price we pay.

Yes, Yes and Yes! That and making Oregonians pump their own damn gas...

 

[BTExpress]

The joke is that the politicians who are screaming about this could easily make things easier by temporarily suspending the state taxes on gas, which is a huge chunk of the price we pay.

Yes, it would "make things easier", but at what cost?

Where does the state gets its money to recoup the money lost by suspending gasoline taxes?

A suspension of gasoline taxes likely will mean INCREASED DEMAND . . . which will mean MORE EXPENSIVE crude oil and is what you don't want when dealing with a finite resource.

Any solution must start with reduced demand. And if you can't change the miles you drive, you sure as heck can purchase a used Corolla in order to get the 38 mpg necessary to reduce demand.

New rule:

There cannot be simultaneous threads salivating over an iPhone while at the same time bemoaing the cost of gasoline. That's like saying, "I've got money to burn . . . but I don't want to use it to burn gasoline."

 

[The Big Ragu]

Easy with the rational talk, BT.

 

[alleyallen]

The absolutists have spoken, it appears. All other arguments and sentiments must therefore fall by the wayside.

 

[the fop]

What I never understand is while the oil companies are taking these record profits, why are their refineries not up to speed? What happened to reinvesting in the product? With increased demand and record profits, isn't it reasonable to expect some sort of upgrade in refining capacity?

Also, in the Midwest, we pay extra for the so called summer blend, the environmentally friendly formula which takes refining capacity offline every spring as they gear up to produce it. With prices already what they are, aren't we at the point where we should stick to this formula year round?

 

[Guy_Incognito]

The joke is that the politicians who are screaming about this could easily make things easier by temporarily suspending the state taxes on gas, which is a huge chunk of the price we pay.

Yes, it would "make things easier", but at what cost?

Where does the state gets its money to recoup the money lost by suspending gasoline taxes?

A suspension of gasoline taxes likely will mean INCREASED DEMAND . . . which will mean MORE EXPENSIVE crude oil and is what you don't want when dealing with a finite resource.

Any solution must start with reduced demand. And if you can't change the miles you drive, you sure as heck can purchase a used Corolla in order to get the 38 mpg necessary to reduce demand.

New rule:

There cannot be simultaneous threads salivating over an iPhone while at the same time bemoaing the cost of gasoline. That's like saying, "I've got money to burn . . . but I don't want to use it to burn gasoline."

I actually agree that the wisest course of action for the politicians is to do nothing, but it bugs me to see them calling the oil companies greedy, when they are turning the more obscene profit.

 

[BTExpress]

The absolutists have spoken, it appears. All other arguments and sentiments must therefore fall by the wayside.

Not really.

But we all have our crosses to bear.

You have seen gasoline prices double since 9/11.

I have seen my homeowners insurance quadruple in that span.

Gasoline prices may be concern No. 1 in your world. They don't even make Top 10 in mine . . . And I drive a gas-guzzling V8 car 22,000 miles a year.

I actually agree that the wisest course of action for the politicians is to do nothing, but it bugs me to see them calling the oil companies greedy, when they are turning the more obscene profit.

The "record profits" is because of "record demand."

If you make 10 cents per gallon profit regardless of price, your profit will be tied to gallons used.

What's odd is Americans using record gallons and then screaming about the providers of these gallons making record profits.

If Apple sold a record number of iTunes downloads this year, I would assume it would show "record profits" for its iTunes division.