Gas Crisis? Huh?

[dieziege]

Storm the parliament!

Last time they tried that was Germany, 1933...well, they set fire to it which is close enough.... they're a little gunshy now....

[NorthernPete]

gas is around 1.15 a litre here (canadian funds...and metric...we loooooove metric!)

[Ninja Geoff]

Gas is up 25 cents to a national average of 2.91. This is being hailed as a crisis, the public is writing in to the news saying they have been changing their lifestyles just to buy gas. The democrats are crying fowl claiming price gouging.

Whether the gas prices should be as high as they are or not, I fail to understand the impact. If you're driving a gas-sucking SUV every day and spending $200 a month on gas, the 'two week' price increase now costs you $217.18, $17.18 more, or 3 Grande Iced Mocha Non-Fat No-Whip Upsidedown Cappuccinos.

To spend $200 you have to be driving around 1200 miles a month, or 38 miles a day, so 19 miles each way (commuting only) - in a 15mpg SUV.

So the 'lifestyle' cost of an SUV driver is 3 trips to Starbucks, less for the average car driver.

Yet they have videos of people going into pawn shops to buy gas money, crying they cant afford to drive to work anymore, and generally complaining that life is going to end because of skyrocketing gas prices.

Am I missing something?

When I started driving, gas was around $1.80/Gal for 87 Octane. I remeber getting pissed when gas hit $2.00. At the time it was one of those "Oh "poo poo", i got 5 bucks, time to gas up" things, so every bit count.
So at the time (old car, 25mpg) $139.68 a month to get gas at $2.91/gal. Compared to the old $86.4/gal per month when it was $1.80. That's $21.6/wk vs $34.92/wk. I woulda been screwed if gas was $2.91/Gal back then, as i needed that $53.28 for part of my insurance. Now that i have a truck, i get 18 mpg. So over the 1200 miles a month at 18 mph that's 66.6 gallons of gas. At $2.91, that's $193.81/month. At the old $1.80, that's $119.88/month. I wonder what that extra $73.93/month would get me, other than just under half my insurance payment. Well, lesse, bike payment? Or maybe save it up. that is $887.16/yr, assuming it stops rising. That sounds like a downpayment and then some on an apt so i can move out of dad's house (gotta happen sometime) or as cushion money, so i can move in with a friend in an apt and look for a job back in western MA (which i REALLY want to do, but can't afford it, yet. May have to put off getting a road bike ANOTHER year to do this). Also, this is usually what i eat during the day: 2 sodas, water (lots at work), some sort of food item before work, MAYBE during work if i'm lucky, and something after work. I would be paying for less, if my schedual didn't keep me out from 1pm to 10+ pm almost every day (another reason i want a new job) so I don't have much else to cut down on. I also havn't gotten gas for the XR. My gas can is 5 gallons. Super is $3.15/gallon. That's $47.25 for maybe a weeks worth of riding (assuming i had the extra energy/time to ride).

[Wizzard]

Imagine how the old Wizz feels . When I first started driving I paid 18¢ a gal.
Ya could cruise all week on a $1.00 worth doncha know ......
Personally I think the oil companies and the ditto heads in D.C. are just shoving it to us sans K.Y.
Regards, Wizz

[MrGompers]

An interesting topic to say the least. As for the media those mean latch onto anything to sensationalize the subject to get more viewers & ad revenue. Personnally, I gave up on local/network news years ago.

The Oil & Gas industrys are among the most unethical businesses to ever exist. Consider the following;

Oil & Gas companies are recording the biggest profits in corporate history.
If I remember correctly, ExxonMobil had a profit of 55% in 2004. That is unheard of in any industry. ExxonMobil surpased Walmart in total sales in 2004 (maybe 2005 also) making them the biggest company in terms of sales on the planet.

Gas, Oil, and natural gas are traded on worldwide exchanges daily. If the prices rise on the exchanges the companies raise the prices immediatley.
To see how this affects you consider this.

If your local gas station sells 10,000 gallons of gas a week there is no way they can pay for that upfront. The oil & gas companies deliver the inventory without a set price. The price is determined by the oil & gas companies themselves at some later time.
Now it would make sense that the gas station should be able to buy the gas at a set price then pay the bill at the end of the period (maybe 7 days) regardless of what the price does during the period. Oh no doesn't work that way.
I have actually seen gas stations with digital price readouts that change during the day. Now the oil & gas industry leaders come back and say that if the price falls on the exchanges that the price of gas at the pump will also fall immediately. I HAVE NEVER SEEN A GAS STATION LOWER PRICES DURING THE DAY I CALL BS ON THAT. I'm not saying its not possilbe I'm just saying I have never personally seen it happen.

This is so wacky because no other industry that I know of sets prices this way. And don't get me started on regional pricing either.

As a counter example, consider how inventory is managed in retail.
Typically in the retail environment stores buy inventory on margin (credit) at the beginning of a period (usually 30 days) and pay 1% or 2% for that privilege. The store expects to sell the inventory within the 30 days and payoff the supplier. Remember the price has already been agreed on here. This is also why stores usually have sales at the end of the month. They are looking to make thier "margin". If a store doesn't actually make thier margins they can't get more supplies and go bankrupt. A recent casualty would be Ames dept stores.

Now that was a little rant on the pricing scheme of oil & gas. Heres some other things to consider as I see it.

Canada our neighbor has started extracting oil from "oil sands" in the province of Alberta. Canada also has a new natural gas pipeline off the coast of Nova Scotia which is currently in operation. (not sure if its at full capacity tho) From what I've read Canada is exporting these two new resources to the US. Altho I don't know quantities. Yet the price of gas & oil continue to rise. Gasoline has risen at least 100% within the last 2 yrs and natural gas has risen at least 50% during the same time. Now wouldn't it make sense if you have more supply the demand would fall and so would the price ? Not to mention the lower transportation costs from Canada as opposed to getting it imported from the middle east or south america.

Now I know you economists will say MrGompers natural resources have an "inelastic demand" which is true. That only affects demand not prices tho. IOW, a supplier of a product that has an inelastic demand can set the price to whatever they want. If the oil companies were willing to set a lower price the demand would stay the same. However, they don't want to set a lower price as that would lower their profits as well. I call BS on the whole thing.

I could get into alot more detail regarding these industries, but I'll leave it at that. Just don't get me started on the rx industry.

[Myself002]

Imagine how the old Wizz feels . When I first started driving I paid 18¢ a gal.
Ya could cruise all week on a $1.00 worth doncha know ......
Personally I think the oil companies and the ditto heads in D.C. are just shoving it to us sans K.Y.
Regards, Wizz

wow... i really cant even imagine paying that for gas..

[NorthernPete]

Imagine how the old Wizz feels . When I first started driving I paid 18¢ a gal.
Ya could cruise all week on a $1.00 worth doncha know ......
Personally I think the oil companies and the ditto heads in D.C. are just shoving it to us sans K.Y.
Regards, Wizz

Walk to school up hill in the snow both ways wizz?

[camthepyro]

I agree with the original post. Most people I know complain about how the rising gas prices are running them broke, boo hoo hoo. Well, if instead of going to McDonalds everyday on your lunch break, try going eating at Taco Bell or something. There, problem solved. I think for the most part, people don't realize how much they spend on "poo poo" they don't need. Everyday, my girlfriend complains to me about how she can't afford gas, and it's just like "well, then don't go out to eat every "procreating" day, then you'll have money for gas and then some." It's all about managing your money.

[TechTMW]

Cam, you are absolutely right. What pisses me off about all of this is the biggest complainers are the biggest consumers. Dumbasses in Congress are busy spending millions in committee to find out all the evils of the Oil Industry, when all they have to do is ask MrGompers!

Seriously, If congress spent as much on conservation research (More efficient engines) and if Americans themselves drove more fuel efficient vehicles -
(Like the diesels that are everywhere in Europe - getting 50mpg on average)
the higher gas prices wouldn't be such a big deal.

And yes, I know things aren't perfect here in Europe - and Yes, much of the price of gas here IS indeed Taxes - But here in Italy (for ex.) you can go to an emergency room and get treated for free - so depending on your beliefs, the taxes are worth it... (trading one evil for another, higher regular prices for less emergency treatment costs)

[Wizzard]

Imagine how the old Wizz feels . When I first started driving I paid 18¢ a gal.
Ya could cruise all week on a $1.00 worth doncha know ......
Personally I think the oil companies and the ditto heads in D.C. are just shoving it to us sans K.Y.
Regards, Wizz

Walk to school up hill in the snow both ways wizz?

Nope , drove my self to school ..........