Oil Companies Testing Even Higher Prices - Pontiac GTO Forum
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post #1 of 32 (permalink) Old 10-03-2005, 11:47 AM Thread Starter
 
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Oil Companies Testing Even Higher Prices

For the past few years, California gas prices have always been .40 a gallon higher than everywhere else -- for no good reason. Now, those prices have spread nationwide.

However, the price of diesel out there has gone absolutely nuts. $3.39 a gallon -- again, for no good reason. Can't be justified by a lack of refining capacity. Can't be justified by a lack of crude -- as there is currently a glut of the stuff on the market.

Being ever cynical of the oil companies -- and Redneck One -- this smells like an elasticity test which could spread to gasoline prices out here -- then nationwide.
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post #2 of 32 (permalink) Old 10-03-2005, 12:15 PM
 
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Ahh the oil companies testing the limits of oil elasticity. The only problem i find with this is that te consumer has in his mind that this is all short term, so the consumer might make it seem like the price is overly elastic(sic, I know it is not used exactly correctly), when in reality, that is not the case for the long run.

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post #3 of 32 (permalink) Old 10-03-2005, 06:35 PM
 
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My guess is if the price of fuel stays as high as it is for much longer, we are going to be talking about a recession. I think the price of fuel will spill over into inflation of the price of everything transported by truck. Plus anything that has plastic, asphalt or any other petrochem byproduct. This bursts the housing bubble, people can't afford to pay more for a house than they are now. That starts a downward spiral of the economy. We then use less oil and the price falls.A US recession destroys the world economy too. This is what has the Arabs (OPEC) so concerned. It hit them in the late 70's and early 80's and it took them till 2000 2001 to get the price of oil back where they had control of it.
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post #4 of 32 (permalink) Old 10-03-2005, 08:13 PM Thread Starter
 
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Absolutely. When interest rates go up -- not only are people going to stop buying houses -- you're going to see folks who did insane stuff like zero down ARMs and negative amortization loans bail out when they can't make the payments. The whole country's going to look like Dallas and Colorado in the 80's -- entire streets of houses, most empty, with for sale signs in front of them.
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post #5 of 32 (permalink) Old 10-03-2005, 08:30 PM
 
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Originally Posted by b_a_betterperson
Absolutely. When interest rates go up -- not only are people going to stop buying houses -- you're going to see folks who did insane stuff like zero down ARMs and negative amortization loans bail out when they can't make the payments. The whole country's going to look like Dallas and Colorado in the 80's -- entire streets of houses, most empty, with for sale signs in front of them.
......And thanks to Mr. Greenspan the interest rates are on their way up right now. Hang on folks the storm that's a brewing is going to make Katrina and Rita look mild.
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post #6 of 32 (permalink) Old 10-03-2005, 09:22 PM
 
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I wouldn't be surprised it the high price of gasoline in Cali includes lots of taxes. Before you blame the big bad oil companies, at least cover your bases and make sure that blame isn't misplaced.
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post #7 of 32 (permalink) Old 10-04-2005, 10:49 AM Thread Starter
 
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Originally Posted by SJAndrew
I wouldn't be surprised it the high price of gasoline in Cali includes lots of taxes. Before you blame the big bad oil companies, at least cover your bases and make sure that blame isn't misplaced.
http://www.energy.ca.gov/gasoline/st...tate_2002.html

Bases covered. Next.
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post #8 of 32 (permalink) Old 10-04-2005, 12:09 PM
 
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Originally Posted by b_a_betterperson
But I think there is a lot of unseen taxs not even listed on this chart. And I only say this because I was a service station owner in the early 1980's and the tax's were double the tank wagon price at that time!
However I also know the dealer profit was 1-3 cents on a gallon vs 20-30 cents today and the spread between regular and preminum was 5 cents vs 20-30 cents today.
We are not only getting shafted by the oil companys but also the dealers and the goverment too!
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post #9 of 32 (permalink) Old 10-04-2005, 02:01 PM
 
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Well, CA is third highest in the nation - $0.08/gallon more than the national average and $0.10 more than my state. That explains at least some of it.

But, the real reason it's that price is because that's the market clearing price right now in CA. If demand does not sufficiently fall to motivate a decrease in price, then why should we be surprised that (insert entity here) charges what they charge for Gasonline - even if it seems too high. Assuming they (the oil companies or whatever) are motivated by profit, why would they lower price when demand remains high at the current price?

Personally, I'm kind of happy that the cost of gasoline is this high. The reason is that this is the only mechanism by which real change can come via more fuel efficient and less polluting vehicles. I trust the market to mandate hydrogen cars (or whatever perceived fossil fuel replacement panacea) more than I do legislation.

The price of gasoline, to me, is like so many other things in life. It sucks - I have to deal with it - and if I dwell on it, I'll just get angry. So, I just accept that it's reality and go on with my life.
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post #10 of 32 (permalink) Old 10-04-2005, 02:39 PM Thread Starter
 
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Originally Posted by SJAndrew
Personally, I'm kind of happy that the cost of gasoline is this high.
You've just made a bunch of friends on this board with that statement.

Quote:
Originally Posted by SJAndrew
But, the real reason it's that price is because that's the market clearing price right now in CA. If demand does not sufficiently fall to motivate a decrease in price, then why should we be surprised that (insert entity here) charges what they charge for Gasonline - even if it seems too high.
My ass. The price is being dictated to us through constricted supply and manipulation of the crude and retail petroleum markets. Just like our power rates were manipulated a few years ago. The spot market for electricity went up 10,000% -- costing consumers billions. And only after everybody got screwed, and FERC said everything was OK and that there wasn't anything worth investigating, did all the evidence that Enron was shutting power lines down and Mirant was closing plants for "maintenance" come to the surface.

Go ahead. Live your life. As a sheep.
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