Gas Prices

[Mr. Pike1]

I will keep my comments short as it relates to gas prices. Exon Mobil reported 10.5 Billion dollars in profits. For those that do not follow stocks or the economy that is the second highest earning ever reported by a public company in US history. Shell and the other major US oil companies will follow with record profits.

I am all about the free agent market and a companies ability to make a profit. However, niehter I or anyone on this site has the ability to compete with these large oil companies so it is no longer a free market system. It is getting close to a monopoly.

Crude oil is part of the cost, local and federal taxes are part, distribution costs are part, and the local service station makes a few pennies on the margin. The big money is made at the refinery level for the oil companies. They buy the crude, they control the refiners, and they dictate the price.

Be thankful that large oil companies do not control city water, electricity, or other segments....

Oh and if your active in the stock market move a lot of money into these publicly traded stocks as you certainly can make a lot of money and the CEO's making hundreds of millions of dollars to lead these companies will continue to do there part and take advantage of the US economy all for the love of money...

[yaggie]

Thats not really correct. Its not the refineries making the big killing here. The high cost of gas is due to the high cost of a barrel of oil and the cost to refine it which is much more expensive to refine than it was even three years ago. The ones making the big money are the ones who operated wells proffitably at $35.00 a barrel a few years ago and are now getting double that which is all profit. This country still has the cheapest gas by far than any other country. Alternative fuels are the answer but not at the present $3.00 gallon gas. These fuels will not be economical without either $5.00 gal. gas or more gov. subsity or both. We have just been spoiled for two many years. But then thats just my opinion.

[Chubby]

I would like to state for the record that I do not like the current high fuel prices.

However it is getting tiresome listening to people whine about the money the oil companies are making. What everyone needs to realize is that the oil companies do not set the price of oil. You the consumer have a bigger hand in setting the price than the oil companies do.

As soon as you refuse to pay $3.00 a gallon for gas the price will go down. This is simple supply and demand and the only thing that will change is a reduction in demand, period.

The oil companies have invested 100's of billions of dollars in the infrastructure needed to allow you to pull up to the pump and fill up. I say more power to them.

We all have one option in regards to fuel prices " Use less or pay more" end of story.

[Mr. Pike1]

I forgot this was a fishing website and not one based on the understanding of economics and how and economy actually does work.

I will check out on the topic but for anyone that thinks this is simple supply and demand and that oil companies built the infrastructure you are mis-guided.

The true result on the economy due to the inflated prices for shareholders to line there pockets with money will be a ripple effect. The demand will not go down as most use the automobile for basic commuting like simply getting to work.

What will happen is people will spend less in other areas leading to closures of other business and unemployment. We are already seeing this in the airline industry, shipping, automotive, etc, etc, etc.

[united jigsticker]

The next time someone says "as soon as you refuse to pay $3 a gallon for gasoline" as the fix all....

That drives me bananas more then people whining about the prices.

Sure, we could car pool, travel less, take the bus, drive slower, inflate our tires, tune up our vehicles...Yadda yadda yadda.

But, if we ALL caught the bus, their would have to be more buses, more routes...

Car pool...But unless you all work at the same place, you're one car is travelling further distances to pick everyone up and drop everyone off.

Sure, it will decrease the demand some...

Maybe even drop the price of gas...some...

But enough to make it worth it? Or to break even?

And then what?

We declare victory on the oil companies, and start driving our vehicles all over the palce again, and the price goes up again.

Do the math and see where we will make a huge savings.

It's like the guy a few doors down from me.

Bought himself a car for $7,000 that gets 28 mpg. Plus he pays $40 a month for insurance.

He was getting 16 with his truck (which he still has, and pays for, but now sits and collects water spots from his underground sprinkler that runs 24/7 because of the drought...lets refuse to except that it won't rain, and save money on watering our grass until dirt starts to show and tumbleweeds provide our only shade)

So his car gets 12 extra miles per gallon, he drives 35 miles a day, and saves $3 something a day? $15 a week? $60 a month? but pays $40 in insurance, plus forked out $7,000 for a car with 75,000 miles that will soon need some type of maint.

Get real.

Walk or ride your bike.

I don't like it either, but if it was that hard on me, I'd do something more proactive then come here a talk about how other people who "don't refuse to park their cars and boats" are responsible for my hardships of financing gasoline...Which, by the way, wouldn't be a hardship if you were following your own advice.

[Whoaru99]

Hmmm....

I'm no economist - heck, I don't even balance my checkbook!!

Does anyone know if the oil companies have increased their profit margin?

I don't like the cost any more than anyone else (except perhaps oil execs and stockholders), but it seems to me higher profits are inherent when the selling price has gone up.

What about the ratio of the price of crude to the price per gallon at the pump - has that ratio changed a lot?

I'm asking these questions seriously because I really have not paid that much attention. I need a certain amount of gas so I buy it. The prices have cut my consumption - I seldom drive my truck or cars anymore and have gotten a motorcycle for most of my day to day driving.

[NWBuck]

jigsticker,

I think you're missing the point in the story you told about the guy who bought the little car. Sure...he may not be saving much money. Perhaps a break even deal in the long run. But look at the big picture...all other things being equal, he has cut his fuel consumption by almost 50%. I've been giving serious thought to doing the same thing. No, I won't get rid of my gas guzzling truck because occasionally I "need" it to pull the boat, etc. I average about 1200 miles per month, and I'm sure at least 800 of these could be diverted to the smaller, more fuel efficient vehicle. This will save just enough money in fuel to justify the expense of the additional vehicle. It will cut my fuel consumption by about 40% and make minimal changes to the lifestyle we've grown accustomed to.

Individually cutting the amount of fuel we use, by whatever means, is the ultimately the only solution to $3.00 gas.

[wallter]

FMers,

I know most of you probably use "garage logic" as a way of like. Here's the deal. Ask yourself this,

How much is enough profit for these large company's. Exxon, Wal-Mart, Microsoft, United Healthcare, Pizza Hut, 3M, General Motors, Anheuser Busch, Direct TV and comcast, Crystal Pierz marine, etc??? I tried to list company's of which we can or cannot control our buying of products from them. Remember they are IN BUSINESS. As in for profit... How some people don't understand this concept blows my mind. How many of us will feel sorry for big oil in 100 years when oil becomes an obsolete option for fueling a vehicle.

IT IS A SIMPLE FORMULA...SUPPLY AND DEMAND.... Take a wild guess as to what kind of prices we'd pay for a one week stay on Mille Lacs if the resorts were booking out 5 years in advance because of demand for lodging on a hot fishing lake. Do you think those business people would try and make their money before times aren't so good? of course.

Think it through please. Most people spend more per month on cable/ sattelite and a couple of pizza's per month than any gas increase will cost them.

I'm not for any big business but it doesn't mean they are open game. Think it through and use some "garage logic" before ripping CERTAIN INDUSTRIES.

The day I go into business, regardless of what goods or services I'm selling, make no mistake. I'LL BE IN BUSINESS TO MAKE A PROFIT....

I am also jealous of people making tons of money but my position is that I had better get into the game if I want to become a millionaire. My 3 cents. Anybody need to buy something???

[upnorth]

Not everyone has the discretionary income to cover the extra $100 a month these increases cost. So something has to go and for my household it is recreation type driving. The RV ain't going far and the bottom of the boat has not been wet for a month. So...does that just affect me? No...it also affects the businesses I would normally patronize for tackle, bait, propane and other supplies for the RV and boat.

[castmaster]

the one thing that really chaps me about the defenders of big oil is this....the "free enterprise" "captialist system" argument is a bunch of bs.

if that were true these companies would recieve NO SUBSIDIES! they would be left to fend for them,selves in an international marketplace instead of being able to do business with the might of the us government and its military standing behind them. they are much like a business man with mob muscle protecting him, think he may have an unfair advantage in the "marketplace"?

oil dominates our foreign policy. it dominates our economic policy. HUGE amounts of OUR tax dollars are being spent to further the interests of big oil, please explain how that is free enterprise, or true capitalism?

[Whoaru99]

Anyone mind if I cash out my 401K before we pull the plug on subsidies?

[LABS4ME]

And I'm sure we'd do much better further socializing our govt... I'm looking at the myriad of successes around the globe with socialism. What we have ain't perfect, but I'll take it over just about any other govt. We complain about subsidies in the oil industry, but we don't complain about subsidizing farming or ethanol... looking at it by profit %, I wonder what the difference is. I know volume wise they aren't going to turn 10 billion, but as a % of profit margin, I wonder what the differnece is... and I can guaruantee you the subsidation to make ethanol is off the chart compared to oil. I'm sure they are doing just fine as they can't build those ethanol plants fast enough. Do they really need the govt. backing them?

Nobody screamed foul when we subsidized NWA until they were closing down all the facilities we helped build... but as long as they kept paying employees of the state we were able to justify it.

Plain and simple... no subsisies = higher prices... alot more subsidies (canada/UK) = even higher prices.

Good Luck!

Ken

[upnorth]

NWA was not raping the american public with their prices. And no we can't just go down the street and by gas at another station cuz they are all the same.

There was a station in superior wi about 10 years ago that decided it would lower it's prices to what it figured was fair and for their trouble the got broken windows, gas pumps and no one deliver them gas until their price were brought back up to the same as the rest. Don't even say there is anything resembling fair trade here!!

[castmaster]

Labs,

one problem with your comparisons....we dont spend BILLIONS of tax dollars on defense spending to ensure our access to corn based ethanol (which by the way i get a kick out of ho the #'s are skewed about the returns on energy provided by ethanol....perhaps when the day comes that farmers can purchase ethanol powered farm implements, non petroleum based fertilizers, pesticides etc the #'s wont look so out of line) tell me how many military incursions have been undertaken for the airline industry.

tell me how many foreign governments have been corrupted or democracy supressed to ensure our access to those same products.

oil is a dirty business, but one we need. i dont begrudge profits being made in relation to risk/investment. my point is we as american taxpayers are funding a much larger portion of the risk/investment than what we are bearing the rewards of.

[Mr. Pike1]

I am all for capitalism and the ability for any company in America to turn the biggest profits in the world. I am also for having a "fair" playing field. The playing field in not level in big oil and is not a "free market"

Unfortunatly the reality is that the lobby groups with all the big money dictates American and world policy. Laws and legislation are drafted and for the most part written by the Lobbiest and then pushed through. Keep in mind many of these are federally funded with American money.

Most of us like to follow the golden rule. However when it comes to American politics and big business the real golden rule is as follows:

Those with the gold make the rules !!!!!!

Monopolies are illigal in the good old U.S.A as it prevents one to dominate a market, set the price, and dictate the rules.

Take a close look at the big oil companies. The dictate US and foreign policy, they control the supply and pricing, and they line there pockets with profits at the expense of the US and world economy.

Why do you really belive the US is involved in the middle East? We have all kinds of social problems, homelessness, health care, education, and other problems in the US that we need to address. If there were no oil in the middle East the US would not be there.

Look to our neibors to the North. Canada has a great economy and they chose to keep hundereds of billions of tax dollars to invest in the people and the country as opposed to funding wars outside.

Dont get me wrong I love the U.S.A and my father is a veteran of foreign war. I am just dis-mayed by things I see and expressing my view. I realize I am one small little man in a world of billions....

[LABS4ME]

Canada has a great economy? I'll have to talk to my buddies who are Canadian citizens... they would probably have something to say about that. Every year I see them they piss and moan about their economy and prices and taxes (and govt. intrusion, and their absolutely pathetic health care system)... more so than just about any American I know.

There is one up tick though, the "harvest" of the oil sand in northern Canada... funny thing is we worry about drilling in ANWAR, but they are more or less strip mining for oil... I think they see the benefit to trying to become self reliant, I don't know why we can't. I don't believe the drilling in Alaska would be near the blight of taking out all of this "oil sand"... From the air it looks to me to be a disaster on the evironment.

As far as American "big oil" determining world policy... I think there is a lot more to it than oil... we have chosen to protect Isreal and until the religious fanaticism disappears, we would (and will be) involved in the mid-east. Our presense over there is not new... we've been there for decades. Last I checked, we aren't recieving any oil from Isreal or Lebanon.

And as far as big profits... I really think all the oil shieks (who determine how much oil reaches the market, thus setting the price by determining supply) are doing pretty well themselves. I bet very few are riding camels and living in tents. I still stand by my statement on the other thread, that we've done this to ourselves. Until we change our use patterns and come up with a viable alternative to oil, we are going to be stuck paying high oil prices. Nothing we can do about it. Milk has skyrocketed in price over the last 5 years, lumber has skyrocketed, both were said to be supply related then justified by saying how the prices lagged behind inflation, much the same as we see now with oil. in reality fuel has also lagged behind inflation till the last 2 years or so. We've been spoiled with the amount we've paid for gas for years and it shaped our lives, now we want to say that it's not fair that we can't do as much recreation because of fuel costs, or it costs too much money to drive to work because we bought that cheap home out in the country.

Again all things being equal, I'd rather not pay what I'm paying for fuel, I'd rather see the oil companies profits moderate a little, but I'll still pay it vs. having more govt. intervention or price setting. I'm far, far, from an economic scholar and my positions are from what I can gather and try to digest. I understand enough business to keep me afloat, There are many out there who undersand the whole economy 100 times what I do, but most of what you hear about the oil prices is complaining because our lifestyle has had to adjust because our discretionary income is going into our tanks vs. doing something fun. We complain about not having money, but not too many years ago, not having money meant standing in a soup line with your only clothes were on your back. Statements like "I need to buy a second (or third) vehicle to get better mileage so I can park my truck to use only when I'm going to pull my boat" doesn't sound like we've reached the suffering threshold yet.

Good Luck!

Ken

[Mr. Pike1]

Ken, I enjoyed the post. All in all I am very happy as well. I guess when I opened the business section the other day and saw the the oil companies reported record earnings while other sectors of the economy and people being hurt by these prices I went off on a tagent.

There are of course no easy answers but ending the addiction to oil is something that is needed.

One country that has done this is Venzuela. When they noticed in the 70's how there dependancy on foreign oil impacted the economy they made a stand. Venzuela is 100% import free and actually exports fuel. What they convert to fuel is actually sugar cane. It is produced clean, burns clean, is renewable, and the cost is like .60 per gallon. Who makes the cars they drive you may ask. While GM, Ford, and the now 2nd largest auto maker in the world Toyota.

I do not know that E85 is the answer in the US but we do need to devote the money and resources to alternatives to crude oil. We need to end the addiction, problem is I am hooked and a gas junkie myself. Truck, boat, lawnmower, etc, etc.....

[iffwalleyes]

You know I hate the arguement that if we quit driving and the demand dropped them the price would go down. Sure it would but for me to do this I would have to quit my job so that is not much of an option for me. I have to drive around 800-1000 miles a week with my job meaning approx. 3 fill ups for my duramax. Sure I am upset but what can I do about it. Just isn't worth complaining about. I probably get more upset at the cost difference between diesel and gas. I do not understand how diesel can be taxed so heavily compared to regualar unlead. Well it is good that we have sites like this that allow one to vent.

[SomethingFishy*]

Citgo gas comes from Venuzeula and is sold here.

[boxcar46]

I just want to ice fish this coming winter. With the high cost of gas these day's (which takes a big bite out of my monthly budget)I don't know how much I will be able to afford to get out. Their is to much speculation these day's. What I mean is in the past you never heard the excuses they make now. The trouble in the mideast, storms in the gulf. etc, etc. It just should not reflect at the pumps so quickly. I've have talked to some well known people and what they tell me is that when they raise cost of the barrel of crude, it should not reflect at the pumpes for at least a year. Everybody is in the same boat here, but I just think of the families with 2 or 3 kids that make just above min wage. Gas prices half to be just killing them. just my 2 cents

boxcar

[Whoaru99]

Quote:

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One country that has done this is Venzuela. When they noticed in the 70's how there dependancy on foreign oil impacted the economy they made a stand. Venzuela is 100% import free and actually exports fuel. What they convert to fuel is actually sugar cane. It is produced clean, burns clean, is renewable, and the cost is like .60 per gallon. Who makes the cars they drive you may ask. While GM, Ford, and the now 2nd largest auto maker in the world Toyota.

---

Sugar cane makes ethanol - essentially the same process as they use for corn around here...

Ours cost as much or more than gasoline to produce. The only thing that keeps it in the ballpark is government subsidy.

All political and environmental reasoning aside, the majority of people are not going to be interested in using an alternate fuel/technology until it's the same (and probably cheaper) than what we have right now.

E85 is about a wash based on those I've talked to that have the dual-fuel vehicles. Sure, it's usually cheaper, but the lower MPG pretty much offsets the cost savings.

I, for one, am just as interested in MY bottom line as is any business is in theirs, and I'm guessing most others are too.

[upnorth]

Quote:

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Until we change our use patterns and come up with a viable alternative to oil, we are going to be stuck paying high oil prices.

---

I don't totally buy that line. We buy more TVs than ever and the price has come down. What about computers? I bought my first computer in 93 and paid $2300 for it you can buy one now for what...$400? If supply and demand holds we should be paying about $7000 for a PC not $400. The suppy and demand theory only goes so far.

And if there was anything resembling the "Oil Shortage" you would see stations actually out of gas. I have yet to see anyone turned away cuz there was a "shortage of gas".

[Dotch]

Quote:

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One country that has done this is Venzuela. When they noticed in the 70's how there dependancy on foreign oil impacted the economy they made a stand. Venzuela is 100% import free and actually exports fuel. What they convert to fuel is actually sugar cane. It is produced clean, burns clean, is renewable, and the cost is like .60 per gallon. Who makes the cars they drive you may ask. While GM, Ford, and the now 2nd largest auto maker in the world Toyota.

I do not know that E85 is the answer in the US but we do need to devote the money and resources to alternatives to crude oil. We need to end the addiction, problem is I am hooked and a gas junkie myself. Truck, boat, lawnmower, etc, etc.....

---

Hmmm...not to pick a fight here but last I checked, Venezuela recently inked a deal with Brazil to develop an ethanol industry in Venezuela. Knowing a little about the country (I've been there twice and my older brother lived there for 10 years in the 70's) and unless you have info to the contrary, I suspect you meant to say Brazil and not Venezuela. Venezuela is self sufficient when it comes to petroleum production, is a major petroleum exporter and likely will be for decades to come.

I agree that E-85 is not and never has been touted as the total answer to our oil addiction but it will help, particularly in the upper midwest. I tire of those who complain of the subsidies for ethanol yet think nothing of the military presence we've maintained for years to protect not only our interests in the Mideast petroleum, but that of most of the free world as well. Sweet deal for them!

[Mr. Pike1]

Dotch, you may have me on the country. You could be right in that it is actually Brazil. I had seen this information one night on the history channel and found it very interesting that an economy took a stand and invested in the infrastructure to be free of oil.

I wish I had the perfect answer. Soon you will see an incease in shipping costs, food, travel, airlines, services etc. All of this while US average income will continue to decrease and US debt increase.

Almost every product has to be moved via air, boat, semi, etc. As those companies are forced to pay more and more for fuel costs there CEO's are going to see the bottom line decrease and what do you think they will do. They will do one thing for sure. They will increase the cost of there product to ensure a profit and you the consumer will pay. Who will win in this game. Well the oil company of course as they can set there price however they see fit. Which again is why Monopolies in the US are illegal as they hurt the indivdual and the country as a whole. Just like a drug the company needs oil and they will pay for it. The next thing the CEO will do is look to reduce labor costs to save money and stay in business. This will lead to that neibor and then maybe your friend or maybe even you being unemployeed. The other option is to decide they can no longer operate a profitable business model in the US and move the company out of the US to simply survive. When this happens like when Ford or GM closed plants in different areas in the US the communities they were in basicly shut down as the local economies were driven by this.

The oil companies are a huge driving force in the overall US economy and they need to make a profit but need to be a good corporate citizen as well. Don't blame high prices on the middle east, hurricanes, or the ability to refine the crude oil into gasoline. Those things will impact fuel costs but the key driving factor is corporate greed.

In a free market you could chose something else to "show" them you do not approve or maybe someone else could come into the market place and do it better or cheaper. In this case they will not. The Oil companies have the money and control the decisions.

Not even congress, the senate, or the President can stand up againts them. They all need money to gain office and if they are againts this group the lobbiest will get the money and the votes to get who they want to act on their behalf.

If you do gain political office the only way you will get some of things that you believe in to pass you will have to conceade to big oil.

There I have stirred the pot the best I can. Again I am one little man in a world of billions and know I can not change this.

However, I can get on the water enjoy life and set the hook !!!!!!!!!

[cold one sd]

These CEOs only care as long as their company has a good bottom line. It's easy for them, because when the company starts going down the tube they simply take their several hundred million dollar "Platinum Parachute" and bail out. Their reputation is tarnished and they are set for life. The funny part is that they are worth hundreds of millions and they look for another job. Evidentally they don't know to fish.

[snatcher20]

Another way to rationalize gas prices.

128 oz./gallon

288 oz/case of Miller Lite, which equals 2.25 gallons/case.

Case of Miller Lite/$18.00 or $8.oo/gallon

Or.....

Red Bull $2/8 oz. which equals $32/gallon

Or.....

20 oz. Mountain Dew/$1.30 is $8.32/gallon

I'd guess nobody is leaving one of the beverages mentioned above, behind on fishing trips.

PS: +/- 3% on chance of a math error!!

[castmaster]

snatcher,

thankfully i dont have to use 70+gallons of miller lite/red bull/mountain dew just to get to work each week. to go along with the whole pay decrease or at the very least freezes many people are suffering.

[idratherbefishing]

Why do all gas stations sell fuel for about the same price (+or- a couple cents)? Are their margins that slim? Any gas station owners or managers out there that can chime in on this?

[garage_logician]

Quote:

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I don't totally buy that line. We buy more TVs than ever and the price has come down. What about computers? I bought my first computer in 93 and paid $2300 for it you can buy one now for what...$400? If supply and demand holds we should be paying about $7000 for a PC not $400. The suppy and demand theory only goes so far.

And if there was anything resembling the "Oil Shortage" you would see stations actually out of gas. I have yet to see anyone turned away cuz there was a "shortage of gas".

---

The problem with your computer analogy is that you seem to have forgotten about the supply side. With the demand came more vendors, and more competition. Prices will drop.

Gas prices are not high because of a shortage but because of demand. China and India are consuming more oil than ever. When they are willing to pay $75 a barrel then we have to as well or not get the oil we need.

[upnorth]

There is no shortage of gas!!! Everytime we go to the gas pump there is just as much gast offered as there are computers. This not like the oil imbargo days.

This has more to do with a necessary comodity and greed than supply and demand.

And with all the mergers and buyouts there is no competition in the oil industry. This is exacltly why monopolies are typically against the law or they are regulated.