|
|
Joined: Oct 2000
Posts: 6,760
Hard-core CEG'er
|
OP
Hard-core CEG'er
Joined: Oct 2000
Posts: 6,760 |
Originally posted by ODC:
If you don't like the cost of gas, buy a more economical car or get a diesel.
I did the later, hence my previous B20 comment.
Ryan
Trollin!
|
|
|
|
|
Joined: Mar 2004
Posts: 1,066
Hard-core CEG\'er
|
|
Hard-core CEG\'er
Joined: Mar 2004
Posts: 1,066 |
Well dude, why complain then ?
|
|
|
|
|
Joined: Oct 2000
Posts: 6,760
Hard-core CEG'er
|
|
OP
Hard-core CEG'er
Joined: Oct 2000
Posts: 6,760 |
Originally posted by ODC:
Well dude, why complain then ?
Why? Because, there is no end insight to the raising gas prices. Companies claim there is a shortage, etc. When, in my eyes, the reason isn't because of shortages or demand, but more because the big oil companies have squeezed out the little guys and in essence gotten rid of competition.
Look at Microsoft, they are always getting hammered for monopolization etc, but oil companies for the most part are not. That might be a stretch, but get my jist?
Ryan
Trollin!
|
|
|
|
|
Joined: Feb 2003
Posts: 4,220
Hard-core CEG\'er
|
|
Hard-core CEG\'er
Joined: Feb 2003
Posts: 4,220 |
Originally posted by RTStabler51:
Originally posted by ODC:
Well dude, why complain then ?
Why? Because, there is no end insight to the raising gas prices. Companies claim there is a shortage, etc. When, in my eyes, the reason isn't because of shortages or demand, but more because the big oil companies have squeezed out the little guys and in essence gotten rid of competition.
Look at Microsoft, they are always getting hammered for monopolization etc, but oil companies for the most part are not. That might be a stretch, but get my jist?
1> the main reason that Microsoft gets hammered while Big Oil does not goes back to that margin thing. There's nothing inherently wrong with a monopoly where the players are only making single-digit margins. MS gets hammered because it's margins are several times larger. To put that difference into perspective, if Exxon-Mobil had the same margin that Microsoft had, Exxon-Mobile would have made over $320 Billion in profit alone last year.
Also, with a half-dozen major players, and hundreds of smaller ones, the industry is far from "monopolized."
The very nature of refined petroleum product refining and distribution in the US makes it virtually impossible for there to even be a monopoly. Prices are largely set by the gasoline and oil futures market (you could try charging more, but there's an incredible amount of competition), the product is distributed via a national pipeline system that anyone can pull from, and can charge whatever they want for it. You can start up a gas station tomorrow if you wanted to and do just fine. You can start up a refinery if you wanted to (and could get through the, literally, 20 years of EPA paperwork) and plug it into the national system and have instant access to every buyer.
2> The consolidation of oil companies, or the "elimination of competition" as you call it, doesn't measurably affect the price you pay at the pump. The market, not Big Oil, sets prices of crude oil and therefore gasoline primarily via the futures market. The consolidation of the US oil industry was a necessary step. Oil companies in early-mid 90s were hurting. It was that consolidation and the resulting reduction in overhead and consolidation of reserves and expertise that allowed those companies to absorb much of the impact of rising crude oil costs in the past few years. If nothing else, those consolidations pleased investors, and happy investors make better, less-rash bets on the futures market. Without that consolidation you'd probably be paying quite a bit more than you are today, both because of weaker oil companies and decreased investor confidence.
In the end, even after all the consolidation in the last 10 years, you likely still have more choices on where to buy gasoline than you have on where to buy a hamburger.
3> The oil industry in the US is a lot more diverse than most people think. There are hundreds of companies that do the exploration, hundreds more do the drilling, tens of thousands of independent gas station operators (even those that are branded are actually largely independent), and dozens of companies that do much of the refining. People just know the "Big Oil" companies because they're the signs they see on every corner. Few people realize how many other companies are involved in getting that oil from the ground to them. They only know the one they deal with when they actually buy it. Few people can list off names like "Tesoro", "Valero", "Schlumberger" or countless others -- but those are all big companies. Valero in fact refines more oil than any other company in North America.
4> For the most part, Big Oil isn't claiming there's a shortage, the market is. The market is afraid that there is one and it's the market that sets prices, not Big Oil. In fact, Big Oil is constantly trying to allay fears that it's reserves are dwindling to the point where they've been accused of over-exaggerating their reserves. Unfortunately, this activity, meant to prevent the fears of shortages actually feeds it on occassion when these figures are revised lower.
2003 Mazda6s 3.0L MTX
Webpage
2004 Mazda3s 2.3L ATX
|
|
|
|
|
Joined: Mar 2006
Posts: 60
CEG\'er
|
|
CEG\'er
Joined: Mar 2006
Posts: 60 |
Okay people gas prices arent even that high.
People say man back in the 60s it was .20 a gallon. Okay .20 back then equals just over $2 nowadays. So what are you bitchen about, its slighty above inflation so what big freaking deal.
People make a big deal out of nothing all the time.
We have to pay what they say, I dont even look at the price, just pull up fill it up, pay and leave.
|
|
|
|
|
Joined: Mar 2004
Posts: 1,066
Hard-core CEG\'er
|
|
Hard-core CEG\'er
Joined: Mar 2004
Posts: 1,066 |
Originally posted by robertchevy:
Okay people gas prices arent even that high.
People say man back in the 60s it was .20 a gallon. Okay .20 back then equals just over $2 nowadays. So what are you bitchen about, its slighty above inflation so what big freaking deal.
People make a big deal out of nothing all the time.
We have to pay what they say, I dont even look at the price, just pull up fill it up, pay and leave.
No kidding.
If you skip on buying one bottle of water, you've negated the price increase at a gas station.
In addition the US has the cheapest gas around ... I filled up on Sunday and gas was 1.14/liter for 92 so that would translate to 4/gal. My gas budget per month is $200 Canadian now ... 
|
|
|
|
|
Joined: Aug 2000
Posts: 3,193
Hard-core CEG\'er
|
|
Hard-core CEG\'er
Joined: Aug 2000
Posts: 3,193 |
The truth of the matter is that gross profit margins are increasing as well as raw profit figures. Even if the price of crude doubles, that does not double the taxes and the other component costs of gasoline. Therefore, the price shouldn't double. If the cost of crude was 50% of the cost of gasoline, and the cost of crude doubles, it should only increase the cost by 50%, not double it.
While the street looks at net profit margins, the way to judge a company's actions is by gross profit figures, as discretionary expenses can impact the actual net figure.
Unfortunately, the oil and gasoline commodities markets are broken in that speculation has been able to impact the price adversely. In a competitive model, they should not carry enough clout to upset the price.
Brad "Diva": 2004 Mazda 6s 5-door, Volcanic Red
Rex: 1988 Mazda RX-7 Vert, Harbor Blue.
|
|
|
|
|
Joined: Feb 2003
Posts: 4,220
Hard-core CEG\'er
|
|
Hard-core CEG\'er
Joined: Feb 2003
Posts: 4,220 |
Quote:
The truth of the matter is that profit margins are increasing as well as raw profit figures.
I don't think I said that the margins weren't going up, just that they're not going up to some heinous amount or even anything close to that. 10 years ago Big Oil was hurting, with extremely low margins of 2-4%. They have increased, but they're still only at a nominal, average level for a healthy company.
And, more importantly for recent events, as I mentioned, refiners are bumping up their margins to more acceptable levels now as well. Perhaps even a tad bit too far. Since the beginning of the year refining costs have almost doubled in some areas, adding an extra 30 cents per gallon. These fluctuations are normal, and time will tell how much this jump sticks around.
2003 Mazda6s 3.0L MTX
Webpage
2004 Mazda3s 2.3L ATX
|
|
|
|
|
Joined: Aug 2000
Posts: 3,193
Hard-core CEG\'er
|
|
Hard-core CEG\'er
Joined: Aug 2000
Posts: 3,193 |
I would still like to see above the main line to determine how much potential profit is being diverted to additional discretionary expenses, which are as much of a use of operating income as leaving it to net profit.
I highly doubt there was a legitimate doubling to the actual cost of refining (cost of goods sold have already been accounted for), versus merely a doubling of the difference. There isn't a logical reason for the costs to vastly increase.
I think the books are being ordered in a way to moderate the appearance of income to both keep street expectations at a longer-term sustainable level and to duck scrutiny.
Brad "Diva": 2004 Mazda 6s 5-door, Volcanic Red
Rex: 1988 Mazda RX-7 Vert, Harbor Blue.
|
|
|
|
|
Joined: Jul 2000
Posts: 443
CEG\'er
|
|
CEG\'er
Joined: Jul 2000
Posts: 443 |
Originally posted by ODC:
Easy answer.
Summer's coming, and with summer comes increased driving. This leads to more gas being used so they up their price.
They're a business. Their job is to make money, they don't owe anybody [censored].
Actually it's not just the higher summer demand that drives prices up. Historically, energy prices always rise during the times of highest demand. Specific to gas prices, they also rise because the percentage of gasoline that must be refined using a more EPA friendly blend increases during periods of higher demand, which means more costly refining, which means higher seasonal prices.
|
|
|
|
|
