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« on: March 05, 2008, 03:45:05 AM » |
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In talking to some people I've heard it repeated from time to time that the oil companies are ripping people off with their record profits. Price per barrel goes up and they're quick to raise them but when the prices go down they take their time, if they lower them at all.
I never abided by this line of thinking for several reasons. For one, the individual stations themselves in large part due to staunch competition, make very little actual profit off of the sale of gasoline. I don't know if it's actually true but knowing a smidge about business I've equated it to acquiring and selling widgets on the stock market. You buy at $2.00/widget and dependant upon the market value of that widget you'll either make money on the sale or loose money. If the value of the widget goes up then you stand to make money on the sell. If the value goes down you'll loose money on the sell. However, whether or not the value of that widget goes up or down, you still have the choice to continue selling at whatever price. If the value goes up and you choose to sell at a discount, that's your choice and you may move more product than the competition. If the value goes down it is still your choice as to whether to sell and break-even, at a profit or at loss.
Since the value of oil has been sonsitently going up versus down, with shorter supply due in part to higher demand, needless to say they're going to be in the position of selling at a profit far more often than loss.
Do you believe we're being scruged, swindelled, ripped the h off by oil companies ? Unless someone can solidly prove otherwise, I don't think that's necessarily the case.
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ScutMonkey
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« Reply #1 on: March 05, 2008, 05:00:38 AM » |
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Well since OPEC largely sets the price and the oil companies are largely at their mercy, no I don't think they're necessarily gouging us. And nobody's going to bail those companies out or give two sh*ts about them when/if the prices plummet and their profits dry up. They never have in the past.
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Reflex
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« Reply #2 on: March 05, 2008, 05:44:08 AM » |
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The biggest change has been demand, our consumption is rising and thus the prices are going up. We have a fixed amount of refining capacity, there is a fixed supply of oil, but we continue to consume it at record levels, so why are people suprised at a rising price?
As for oil company profits, much of that is due to their divestment of infrastructure, namely countries have nationalized thier oil production, and oil companies have largely sold off their refining capacity, leaving them simply as distributers. Thats a method of putting them into a profit position regardless of where the market goes, including towards other products like biofuels. They have also made tremendous investments in the distribution infrastructure, which is very forward looking, there is a reason the mom and pop stations are now major oil branded, it gives them complete control of the distribution infrastructure, replacing what they used to make on the production side...
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Caffeine Cemetary
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« Reply #3 on: March 05, 2008, 06:23:35 AM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now..
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GTX
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« Reply #4 on: March 05, 2008, 06:57:41 AM » |
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Do you believe we’re being scruged, swindelled, ripped the h off by oil companies ? I've always thought gasoline, diesel, heating oil, kerosene, propane, natural gas and electric were underpriced. Same with food, water, land etc. Speculators drive the prices of some of these things higher, but they're still a good value. (Minus E10 and E85 gasoline). |
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Reflex
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« Reply #5 on: March 05, 2008, 11:14:21 AM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. Well oil is priced globally, so if it costs 'x' amount here, it will cost the same over there. The only thing that makes it more expensive in the EU is taxes, they tax the hell out of it. If you take the taxes off however the price is exactly the same as the US(minus taxes). |
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Intuit
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« Reply #6 on: March 05, 2008, 05:01:03 PM » |
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Volume discounts ? We buy (way) more of it so shouldn't it be sold to the US cheaper ? China is now becoming the largest consumer. I had seven widgets to sell. The first guy wanted to buy two widgets for $3/per widget. The second guy wanted to buy all seven. I saw an opportunity to get rid of all seven so I sold to the second guy at a reduced price. It's not always first come first serve. However if demand for this paritcular widget had been strong enough and the value of that widget high enough, I would've been content to sell them off at a higher price individually versus altogether.
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Babar
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« Reply #7 on: March 05, 2008, 05:19:27 PM » |
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Well since OPEC largely sets the price and the oil companies are largely at their mercy, no I don't think they're necessarily gouging us. And nobody's going to bail those companies out or give two sh*ts about them when/if the prices plummet and their profits dry up. They never have in the past. Clarification... Well since the countries possessing half of the world's underground oil reserves set their own prices, the oil companies are largely at their mercy, no I don't think they're necessarily gouging us. And nobody's going to bail those companies out or give two sh*ts about them when/if the prices plummet and their profits dry up. They never have in the past. |
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VorLonUK
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« Reply #8 on: March 05, 2008, 07:31:08 PM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. I think our gallons are slightly different to US gallons. Roughly our fuel costs around $8 a US gallon, or as the way it's purchased over here £1.05 a litre ( $2.10 xe.com calculator) Working it out a US gallon = 3.785 litres, so (3.785 x 2.10) = $7.94 per US gallon. Our UK pump prices:- http://www.petrolprices.com/CC, this will show where the UK motorists money goes when he/she buys fuel, ie the bulk of it is tax. http://www.petrolprices.com/price-of-petrol.htmlAs you can see we pay "Duty" and "VAT" which are both essentially taxes. |
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ScutMonkey
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« Reply #9 on: March 05, 2008, 07:55:47 PM » |
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Well since OPEC largely sets the price and the oil companies are largely at their mercy, no I don't think they're necessarily gouging us. And nobody's going to bail those companies out or give two sh*ts about them when/if the prices plummet and their profits dry up. They never have in the past. Clarification... Well since the countries possessing half of the world's underground oil reserves set their own prices, the oil companies are largely at their mercy, no I don't think they're necessarily gouging us. And nobody's going to bail those companies out or give two sh*ts about them when/if the prices plummet and their profits dry up. They never have in the past. I really don't see your point. I'm a capitalist and don't see anything wrong with what they do if that's what you're implying. At any time we can clean up our own act domestically and wean ourselves off their products, but we don't. OPEC typically sets a price for their oil and other oil producers follow their lead. It's just business. |
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ScutMonkey
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« Reply #10 on: March 05, 2008, 07:58:23 PM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. I think our gallons are slightly different to US gallons. Roughly our fuel costs around $8 a US gallon, or as the way it's purchased over here £1.05 a litre ( $2.10 xe.com calculator) Working it out a US gallon = 3.785 litres, so (3.785 x 2.10) = $7.94 per US gallon. Our UK pump prices:- http://www.petrolprices.com/CC, this will show where the UK motorists money goes when he/she buys fuel, ie the bulk of it is tax. http://www.petrolprices.com/price-of-petrol.htmlAs you can see we pay "Duty" and "VAT" which are both essentially taxes. So yeah, basically cut out the 47% Duty and you'd have the equivalent price compared to the US. |
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ScutMonkey
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« Reply #11 on: March 05, 2008, 08:07:31 PM » |
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Volume discounts ? We buy (way) more of it so shouldn't it be sold to the US cheaper ? China is now becoming the largest consumer. I had seven widgets to sell. The first guy wanted to buy two widgets for $3/per widget. The second guy wanted to buy all seven. I saw an opportunity to get rid of all seven so I sold to the second guy at a reduced price. It's not always first come first serve. However if demand for this paritcular widget had been strong enough and the value of that widget high enough, I would've been content to sell them off at a higher price individually versus altogether. That's how it works when there's competition and plenty of supply. Because demand outstrips supply, OPEC and other oil producers can set their own price and get it. The only thing they're careful about is making sure they don't raise the prices so high it causes a recession. That's my take on it anyway. |
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VorLonUK
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« Reply #12 on: March 05, 2008, 08:13:36 PM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. I think our gallons are slightly different to US gallons. Roughly our fuel costs around $8 a US gallon, or as the way it's purchased over here £1.05 a litre ( $2.10 xe.com calculator) Working it out a US gallon = 3.785 litres, so (3.785 x 2.10) = $7.94 per US gallon. Our UK pump prices:- http://www.petrolprices.com/CC, this will show where the UK motorists money goes when he/she buys fuel, ie the bulk of it is tax. http://www.petrolprices.com/price-of-petrol.htmlAs you can see we pay "Duty" and "VAT" which are both essentially taxes. So yeah, basically cut out the 47% Duty and you'd have the equivalent price compared to the US. It certainly looks that way Scut. It makes motoring really expensive and it's the chunk of money it costs to fill up a near empty tank taht makes the taxes even more noticeable. |
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ScutMonkey
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« Reply #13 on: March 06, 2008, 02:10:15 AM » |
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It certainly looks that way Scut. It makes motoring really expensive and it's the chunk of money it costs to fill up a near empty tank taht makes the taxes even more noticeable.
You could always rewrite the lyrics to "Freedom isn't Free" and call it "Healthcare isn't free!" Sorry, I had to tweak you there. I'm glad I'm in the employment situation I'm in if this sort of thing happens in the US. I work from home exclusively now and use less than 30 gallons of gas a month. |
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agogley
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« Reply #14 on: March 06, 2008, 09:51:58 PM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. Well oil is priced globally, so if it costs 'x' amount here, it will cost the same over there. The only thing that makes it more expensive in the EU is taxes, they tax the hell out of it. If you take the taxes off however the price is exactly the same as the US(minus taxes). Refining and various eco additives can changes prices locally too (but agree that taxes are the biggest difference between Europe and here). Also, even if profit margin goes down but consumption goes up you can still have huge profits. |
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Caffeine Cemetary
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« Reply #15 on: March 06, 2008, 11:03:55 PM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. I think our gallons are slightly different to US gallons. Roughly our fuel costs around $8 a US gallon, or as the way it's purchased over here £1.05 a litre ( $2.10 xe.com calculator) Working it out a US gallon = 3.785 litres, so (3.785 x 2.10) = $7.94 per US gallon. Our UK pump prices:- http://www.petrolprices.com/CC, this will show where the UK motorists money goes when he/she buys fuel, ie the bulk of it is tax. http://www.petrolprices.com/price-of-petrol.htmlAs you can see we pay "Duty" and "VAT" which are both essentially taxes. Perhaps the UK gas tax is slightly different than in Germany? That is where I was getting my roughly $9+/per gallon estimation. Last year I did the math (to include the litre to gallon conversion), and that's what I came up with.. |
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VorLonUK
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« Reply #16 on: March 07, 2008, 02:27:20 AM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. I think our gallons are slightly different to US gallons. Roughly our fuel costs around $8 a US gallon, or as the way it's purchased over here £1.05 a litre ( $2.10 xe.com calculator) Working it out a US gallon = 3.785 litres, so (3.785 x 2.10) = $7.94 per US gallon. Our UK pump prices:- http://www.petrolprices.com/CC, this will show where the UK motorists money goes when he/she buys fuel, ie the bulk of it is tax. http://www.petrolprices.com/price-of-petrol.htmlAs you can see we pay "Duty" and "VAT" which are both essentially taxes. Perhaps the UK gas tax is slightly different than in Germany? That is where I was getting my roughly $9+/per gallon estimation. Last year I did the math (to include the litre to gallon conversion), and that's what I came up with.. Did you check it with the US Gallon vs the Imperial Gallon CC? 1 Imperial gallon = 4.546 09 litres 1 US gallon = 3.785411784 litres |
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Caffeine Cemetary
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« Reply #17 on: March 07, 2008, 07:10:57 AM » |
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I tend to agree with Reflex on this, oil prices have everything to do with consumption. Though I can't say the same for Europe.. Even with superior public transportation they seem to have $9+ per gallon. Not sure what's going on there? (Maybe someone could explain?)
In any case, that's always helped me get by when everyone in the US whines about $3/gal. I mean, come on now.. I think our gallons are slightly different to US gallons. Roughly our fuel costs around $8 a US gallon, or as the way it's purchased over here £1.05 a litre ( $2.10 xe.com calculator) Working it out a US gallon = 3.785 litres, so (3.785 x 2.10) = $7.94 per US gallon. Our UK pump prices:- http://www.petrolprices.com/CC, this will show where the UK motorists money goes when he/she buys fuel, ie the bulk of it is tax. http://www.petrolprices.com/price-of-petrol.htmlAs you can see we pay "Duty" and "VAT" which are both essentially taxes. Perhaps the UK gas tax is slightly different than in Germany? That is where I was getting my roughly $9+/per gallon estimation. Last year I did the math (to include the litre to gallon conversion), and that's what I came up with.. Did you check it with the US Gallon vs the Imperial Gallon CC? 1 Imperial gallon = 4.546 09 litres 1 US gallon = 3.785411784 litres Vorlon- The original price I was looking at was at various Arals/Shells in DE. The prices advertised were in liters. So what I did was convert those liters to gallons and calculate the price from Euros to US dollars. Am I still off? |
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Intuit
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« Reply #18 on: March 11, 2008, 07:51:23 AM » |
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If you've never seen the History Channel's Mega Disasters documentary titled, "Oil Apocalypse", you know very little. Can't recommend it enough. Look for it on your local schedule. (TitanTV.Com & a DVR/VCR may be helpful) I see where this venomous "OPEC are crooks" attitudes originate from... http://en.wikipedia.org/wiki/1973_oil_crisis<
On October 6, 1973, Syria and Egypt launched military attack on Israel starting the Yom Kippur War. [1] The persistence of the Arab-Israeli conflict finally triggered pressure on the West over its support of Israel (in part because of operations such as Operation Nickel Grass). Egypt and Syria, though not major oil-exporting countries, joined the latter grouping to help articulate its objectives. On October 17, 1973, Arab states placed an embargo on oil as punishment for U.S. support for Israel in the Yom Kippur War. [2] During the war the Arab world imposed an oil embargo against the United States, Western Europe, and Japan for their support of Israel. By the early 1970s the great Western oil conglomerates suddenly faced a unified bloc of producers.
The Arab-Israeli conflict triggered a crisis already in the making. The West could not continue to increase its energy use 5% annually, pay low oil prices, yet sell inflation-priced goods to the petroleum producers in the Third World. This was stressed by the Shah of Iran, whose nation was the world's second-largest exporter of oil and the closest ally of the United States in the Middle East at the time. "Of course [the world price of oil] is going to rise," the Shah told the New York Times in 1973. "Certainly! And how...; You [Western nations] increased the price of wheat you sell us by 300%, and the same for sugar and cement...; You buy our crude oil and sell it back to us, refined as petrochemicals, at a hundred times the price you've paid to us...; It's only fair that, from now on, you should pay more for oil. Let's say ten times more."[3]>>[/size] Hmm... |
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GTX
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« Reply #19 on: March 11, 2008, 10:51:13 PM » |
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Seems like many people are becoming so accustomed to hyper fuel inflation that they're not complaining as much as in the past. We have $4.20 to $4.40 diesel in some areas, but it doesn't seem to bother people as much as when fuel first hit $3.00.
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