Hurricane and gas prices

[granpa in Cincy]

Took a ride this AM. In the morning I saw gas prices 3.59, 3.69, 3.79 on East side of Cincinnati.

One Kroger store had 3.25.

All that time, I didn't need gas.

Getting closer to home and about 1:30 PM I'm seeing 3.85, 3.89 and 3.99.

Shell took the cake at 4.01.

Didn't fill up yet.

[Grandpa Spyder]

Prices around here jumped $.30 per gal. today Reg. 3.78 high test 4.16

[Bob Denman]

We're pretty much in the mid $3.90s right now back here...
I'm waiting for the strategic oil reserves to get tapped in order to lower fuel prices for the elections...

NOT meant as a political statement; just a fuel price statement...

[ARtraveler]

As I have stated many times: The petroleum companies use anything and everything as an excuse to gouge the customer. The hurricane has not hit yet, we do not have a gas shortage, and the gas in the underground tanks was probably paid for at a pre-hurricane price. There is no excuse for raising the price other than gouging.

RE: Alaska: I paid 3.84 for premium the other day. Regular going for $3.64. That's Eagle River. Currently in Anchorage--3.79-3.81 for regular. Premium 20 cents per gallon higher.

Someone from the state legislature suggested an investigation into gas prices in AK about 3 months ago--result--gas went down from the 4.30's to current prices. Go Figure!

[Bob Denman]

Could you please send them down here to investigate?

[zrc]

When gas bottomed out here, at 2.87 it then skyrocketed back to 3.20, and they blamed the corn drought. A drought that will effect absolutely NOTHING until next year. But on the "news" and I call news in our country 99% bull$h!!, they reported the corn shortage (which isnt happening yet, at all) was the cause. Due to regulatory necessity of ethnol. I mean really.

So basically now big gas companies are blaming corn for their prices going up, when at one point at time they blamed the inclusion of oil for having to raise prices. If we didnt have it and went to no corn gas wouldnt it go back down?

[Tomite]

I don't understand it going up like it has. It's $3.97 today. I need gas in my car and spyder and refuse to buy it. Hope it goes back down soon or I'm gonna run out. lol

[shelbydave]

You haven't seen the trend since Katrina? They raise prices by large increments until people start to really complain, then they drop them a tiny bit to appease us.... It stays there until they have another opportunity.

Since our infrastructure has obviously been fixed over the last 7 years, I'm still waiting for the pre-Katrina prices...

[shelbydave]

I'm waiting for the strategic oil reserves to get tapped in order to lower fuel prices for the elections...

[bruiser]

Stopped this morning to fill up the company truck. The price on the pump was 3.68 for regular. While there, they came out and changed it on the sign to 3.75. As soon as I finished filling up they shut off the pump to change it to the new price. I agree, how can they change the price on fuel already in the ground??? That's gouging for sure IMHO. Fuel is a commodity and as with all commodities is traded by speculators. They control the prices. I read where Hugo Chavez said that the price of fuel in Venezuala will stay the same even after the major fire that put one of their refineries out of business. So we get a hurricane, a refinery fire and corn shortage and we get a raise in the price of fuel already in the tanks.

[grumpybob]

When gas bottomed out here, at 2.87 it then skyrocketed back to 3.20, and they blamed the corn drought. A drought that will effect absolutely NOTHING until next year. But on the "news" and I call news in our country 99% bull$h!!, they reported the corn shortage (which isnt happening yet, at all) was the cause. Due to regulatory necessity of ethnol. I mean really.

So basically now big gas companies are blaming corn for their prices going up, when at one point at time they blamed the inclusion of oil for having to raise prices. If we didnt have it and went to no corn gas wouldnt it go back down?

Gas with no corn around Syracuse is $.30 higher than gas with corn.

[Cal777]

My dad runs a small country store and gets an email giving wholesale gas prices every morning. Yesterday 87 went up .10 per gallon and today it went up another .20 per gallon.
Rudy

[Dizneyman]

We need to do like they recently did in Europe, and all the trucks pulled over to the side of the road for a day. Amazingly enough, gas prices dropped.

[Pennyrick]

It is based on Replacement Cost of the gasoline.

Assume you run a station with 10,000 gallons underground and you have paid $3.00 a gallon for that inventory. You have $30,000 invested in that.

If you know that gas is going to start jumping in price in the next week to ten days, you can figure the public is going to have a 'run' on your supply and you are going to have to fill the tanks sooner than usual.

So, the price to re-fill is going to cost you $3.25 a gallon or, $2,500 more.

If the strategic reserve releases or some other OPEC move causes the price to drop and gasoline prices drop... how are you going to cover your losses if that stuff in the ground that you own is now worth less than you paid for it?

Or it just may drop down so that in order to be competitive in the market you have to sell it at a price that may not be less than you paid but is still too low to cover your overhead on operations.

When the price begins to drop demand eases off but when it starts to rise, demand increases. This can put the retailer in a real squeeze if he gets stuck with high priced stuff underground.

[coz]

i find it hilarious how everybody bitches about an extra 1.50 to fill the tank of their 30 THOUSAND DOLLAR TOY. Just park it for a week until gas comes back down or buy one less ice cream.
This is the double gouge, hurricane and holiday weekend

[boborgera]

It is based on Replacement Cost of the gasoline.

.

Exactly, But most people will never get it,

[d.o.spyder-rts]

It is based on Replacement Cost of the gasoline.

Assume you run a station with 10,000 gallons underground and you have paid $3.00 a gallon for that inventory. You have $30,000 invested in that.

If you know that gas is going to start jumping in price in the next week to ten days, you can figure the public is going to have a 'run' on your supply and you are going to have to fill the tanks sooner than usual.

So, the price to re-fill is going to cost you $3.25 a gallon or, $2,500 more.

If the strategic reserve releases or some other OPEC move causes the price to drop and gasoline prices drop... how are you going to cover your losses if that stuff in the ground that you own is now worth less than you paid for it?

Or it just may drop down so that in order to be competitive in the market you have to sell it at a price that may not be less than you paid but is still too low to cover your overhead on operations.

When the price begins to drop demand eases off but when it starts to rise, demand increases. This can put the retailer in a real squeeze if he gets stuck with high priced stuff underground.

I understand your point however, it does not justify raising the price on current inventory. When your cost increases, then raise the price to the consumer. Nothing more than greed. The oil companies will always get the price they want for their product. Dale

[Firefly]

I'm going to raise the price of printing for my customers every time there's a forest fire..... because obviously paper will go up......

[btcherm]

gas here is at 4.10 a gal. for reg

[ARtraveler]

d.o.spyder--rts said it best I think. The rise of a price is not justified on what's in the tank now. The price was adjusted to cover the profit margin when that batch of gas was put in the storage tank. When your new batch arrives at a new price--then raise the price to cover your profit margin. Otherwise, plain and simple--its gouging.

I think I should have a raise this week in pay so that I can cover the new costs that I will be facing next week--good luck on that one too!

[Pennyrick]

Exactly, But most people will never get it,

Based on subsequent responses, it looks like you are correct. They just don't get it.

Here's another way of looking at it.

You are investing your money in a product with volatile pricing that is not controlled by you? If the retailer buys several thousands of dollars worth of product that subsequently drops in price, forcing the price down lower than what he has invested... he will get burned... big time! He cannot pass the increase along on the back end or he will not be competitive in the marketplace. He must price the product based on replacement cost or he won't be in business very long.

l

[TimPeck]

$4.25 for 87 octane.

[jScotD]

anybody ever watch Harley Davidison and the Marlboro Man and his reaction to the high fuel prices?

jumped 20¢ in 2 days here .. speculators.. gotta love 'em

[boborgera]

I have a 5 gal can of gas that i keep in my barn , I bought it @325 a gal. To replace it now @375 a gal.
Some guy wanted to buy the 5 gal's and pay me @325 a gal.
If i charged him @375 a gal would i be price gouging,
I mean it's been setting in my tank at @325 a gal.

[MarkLawson]

As I understand it, that fire at the refinery in Venezuela, is at the largest refinery in the world. Since the US imports at least 11% of the refined gasoline we use each day, that fire very likely is impacting what we pay at the pump. That along with about 78% of the oil platforms in the gulf being shut down due to the storm.

When you see the price of a barrel of crude oil (42 gallons per barrel), today it closed @ $96.06, that comes to about $2.29 a gallon of crude oil before the ship leaves the dock. It then has to be transported half way around the world to a refinery and eventually to a retailer near you & who knows how many stops in between. After the enormous investment, much of it at significant risk, the oil company has about a 7% return on their investment. When gasoline cost $0.25, that means they made a touch over 3-cents a gallon. Today, if a gallon costs $4.00 a gallon, that 7% works out to be about 28-cents. Oil companies make record profits because they make record investments. 7% of a trillion dollars is a lot more than 7% of a single dollar, but still only 7%.

We pay much more in taxes than we do in profits. But in our society, taxes are good and profits are evil...