[Vision2020] Gas prices [was: Can we not find...]

[Andy Boyd]

I am curious if anyone can answer this about gas prices:
Why when the price of oil per barrel goes up we see an immediate increase in price at the pump but when the price of the barrel goes down the price of gas drops ever so slowly and may never get back down to where it was before the increase?
Thanks,
Andy Boyd
----- Original Message ----- 
  From: Jay Borden 
  To: Ralph Nielsen ; vision 2020 
  Sent: Friday, August 19, 2011 11:26 AM
  Subject: Re: [Vision2020] Gas prices [was: Can we not find...]


  Aside from taxes, it doesn't matter what party is in office, they have very little (if any) control over the cost of gasoline.  (Foreign wars and unrest in the middle east not withstanding).  The BIG OIL companies that many on here love to bash so heavily also have very little to do with the cost of fuel at the pump.  If you take a peek at their model, it's a pretty straight-forward "cost-of-goods to produce + markup" business.  Yes, a VERY BIG BUSINESS, but one that makes the profit on VOLUME, not on price gouging.

   

  The two largest driving forces in the cost of oil?  OPEC and taxes.

   

  The government makes more in taxes on a single gallon of gasoline than the BIG OIL company that refined it and delivered it to your local gas station.  (If I remember reading it correctly, this has been true for the past 25 years, with only 1 or 2 years being an exception).

   

  The other driving force, OPEC, is just unified enough to keep the supply/demand metric at a price point JUST above the break-even point for alternative forms of energy to become economically viable. and they damned well know it.  (They produce something like 45% of the world's crude oil supply. so they are the 800 pound gorilla in the market).   If indicators show that suddenly a new form of wind technology or solar energy design can be made for cheaper, by some MIRACLE the cost per barrel of oil goes down just a tad.    OPEC is business collusion in its WORST form.

   

  Think about it this way:  a 42-gallon "barrel" of oil sold on the market today is right around $84 (rounding to make the math easy).

   

  That means that the COST of the oil is $2 a gallon before it goes to any refining process. tack on a refining cost, tack on transportation/distribution costs and then tack on taxes. and now you're starting to approach the current cost of a gallon of gasoline.

   

  This is why I roll my eyes when morons like Bachman declare "when I'm president, I'll return to $2.00 a gallon gasoline" [to paraphrase]. (yah, good luck with that).

   

   

  Jay

   

  From: vision2020-bounces at moscow.com [mailto:vision2020-bounces at moscow.com] On Behalf Of Ralph Nielsen
  Sent: Friday, August 19, 2011 10:32 AM
  To: vision 2020
  Subject: [Vision2020] Gas prices [was: Can we not find...]

   

  Have a look at the cheapest gas in Canada -- in Edmonton AB, at $3.94/gal. And below, the cheapest gas in Fort McMurray AB, where the tar sands are, costs $4.66/gal.

   

  For metrically challenged Americans, divide liters and price-per-liter by 0.264 for per-gallon equivalents. For liter-gallon equivalents multiply by 0.264.

   

  In 2005, when I was in England, petrol was a pound per liter = $2/liter = $7.58/gal. I'm sure it's higher now. Don't count on the Conservatives to lower it.

   

  http://www.albertagasprices.com/

   

  Ralph

   

   

  On Thursday, August 18, 2011 10:53:56 AM Steven Basoa wrote:

  > Yeah, but the gallons will be smaller...

   

  Sure, and the new gallons at $2 each will have a new name -- liters.

   

  A $2 bill is what one will pay for a demonstration flask of fuel from the old-

  fashioned pre-electric vehicle days.

   

  A $20 bill is what one will pay for just enough fuel for Junior to get the old 

  hot rod from home to the prom and back home again -- and nowhere else.

   

  A $200 bill will be necessary to fill up the old hot rod -- and even then only 

  for deductible business uses -- assuming fuel expenses are still deductible.

   

  Yes, indeed, the coming days of fuel at $20 per decaliter (before inflation) 

  will allow an electric vehicle purchase decision to be really easy to approve.

   

  I wonder whose face will be chosen for the two-hundred-dollar bill. Ideas?

   

   

  Ken [Marcy]



------------------------------------------------------------------------------


  =======================================================
   List services made available by First Step Internet, 
   serving the communities of the Palouse since 1994.   
                 http://www.fsr.net                       
            mailto:Vision2020 at moscow.com
  =======================================================
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mailman.fsr.com/pipermail/vision2020/attachments/20110819/c6b1023c/attachment.html