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Old May 12th, 2006, 03:12 PM   #1
TJrockdogg
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recieved this email today from local congress men, figured I would share it maybe everyone recieved it.

I write to update you on recent legislative activities in the United States Congress. I appreciate the opportunity to contact you.


Gas Prices:

When we are driving our children to school, going to work, or making any of the many other trips in our busy lives, we ought not to worry whether some criminal is stealing our money at the gas pump; and in a state like Michigan where we have pretty cold winters, we should not have to mortgage our house to afford to heat it. Price gouging in the sale of gasoline, diesel fuel, crude oil, home heating oil must be punished severely.

That is why earlier this week I voted for and cosponsored the Federal Energy Price Protection Act, which emphasizes a national commitment to prevent price gouging and sets tough, enforceable civil and criminal penalties for the practice. The legislation creates new penalties for wholesale and retail sellers, sets civil penalties at triple the amount of ill-gotten gains, adds additional penalties for continuing violations, and major criminal fines of up to $150 million for wholesale or $2 million for retail price gouging. Finally, both wholesale and retail violators are subject to imprisonment for up to two years.

I believe that America can solve the problem of rising gasoline prices by tackling the challenge head-on. While most of the solutions are long range, I know we need short-term solutions too. That is why I have compiled on my website information that I believe will be helpful to you during this summer's driving season.

On my webpage you will find a one-stop location information on the lowest gasoline prices in the area, tips on how to reduce fuel consumption and a tip-line for possible price gouging. You will also find more complete summary of my work to address America's near-term and long-range fuel needs, including reducing dependence on unstable foreign oil markets, and moving quickly to alternative fuel sources.

For more information on this issue, please visit my website at http://www.mikerogers.house.gov/Legi...spx?Section=88

Lobbying Reform:

You may be interested to know that earlier this week the House of Representatives, with my support passed, legislation, H.R. 4975, The Lobbying Accountability and Transparency Act. This legislation creates stronger lobbying oversight, timely and more transparent reporting rules for lobbyists, and tighter requirements on lobbying by former members of Congress and Congressional staff. In particular, the legislation will:

Reform of the Congressional earmark system, to make it more transparent
Repeal the federal pensions of Members of Congress convicted of federal crimes
Create new disclosure rules for lobbyists
Require ethics training for all Members of Congress and their staff
As public servants, our responsibility is to respect the people we represent, dignify the office we hold, and honor the nation we serve. When we accept that public responsibility, we must be able to sit at the kitchen tables of America or walk with the soldiers defending freedom around the world, and be able to look each one in the eye, and have them know that we hold the honor of our office in the highest regard. Closing the loopholes and turning the lights on in the world of lobbying will restore the trust of Americans whose faith in their leaders has been shaken by recent scandals. I believe with all my heart that these reforms are absolutely essential to restore and protect the integrity of the offices we hold in this nation.

Net Neutrality:

Today's internet stands in stark contrast to the heavily regulated telecommunications services such as telephone and television services. Keeping government regulators away from the internet has been essential to the growth and success we have experienced in the past decade. For that reason, I am deeply concerned about both the possible unintended consequences of any new government regulation, including net-neutrality rules. However, there is also reason to be concerned that the handful of dominant internet service providers could radically change the internet as we know it. For that reason, I supported legislation that would grant the Federal Communications Commission (FCC) the authority to enforce the following net neutrality principals:

Consumers are entitled to access the lawful Internet content of their choice
Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement
Consumers are entitled to connect their choice of legal devices that do not harm the network; and
Consumers are entitled to competition among network providers, application and service providers, and content providers
The legislation guarantees net-neutrality by allowing the FCC to fine any offending company $500,000 per consumer, a considerable sum considering the number of consumers who would be impacted by any violation.

I appreciate your continued interest in the legislative activities of the U.S. Congress. As always, if you should have questions or concerns, please do not hesitate to let me know.

Sincerely,

Mike Rogers
Member of Congress
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Old May 12th, 2006, 04:07 PM   #2
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got the same letter.......all talk they dont care about the lil man
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Old May 12th, 2006, 04:36 PM   #3
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current 2005 profits as reported by exxon ALONE would cover then for 364 days of price gouging out of the standard...year...
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Old May 12th, 2006, 05:26 PM   #4
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I want to know who is price gouging and how they are doing it, with proof, not blind accusations.
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Old May 12th, 2006, 06:12 PM   #5
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with proof, not blind accusations.
Big Oil's $16 Billion 2006 first quarter profits!?! That's Billion, with a B! In only 90 days!?!

No blind accusations here.
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Old May 12th, 2006, 06:29 PM   #6
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I challenge someone to truely define price gouging. Is 20 cents more every Thursday price gouging? Or is upping the price $2 a gallon after a natural disaster price gouging? Or is it all just good old supply and demand?

Prices go up. Oh damn. Drive less, buy smaller cars, or earn more. These are good solutions that everyone can do without the governments involvement.

Why don't they just get it over with and switch this country to communism since thats where we are headed anyway.
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Old May 12th, 2006, 06:48 PM   #7
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Quote:
Originally Posted by Kane
Big Oil's $16 Billion 2006 first quarter profits!?! That's Billion, with a B! In only 90 days!?!

No blind accusations here.
Sorry, but that still isn't proof of price gouging. They sell enourmous amounts of products every year. They are still only making about a 10% profit margin. Gross and net revenue numbers are meaningless, I don't care how many Billions with a "B" that they make every year. So when Joe down the street makes a 10% profit, people don't think he is a very good business man. But, when a large corporation makes the same 10% profit, they are the devil and are out to screw over every human on earth?

Keep trying. You still haven't proven anything even remotely close to price gouging. Price gouging is the practice of intentionally increasing the price in the face of serious emergencies with the intent to profit from others' misfortune or need. A 10% profit doesn't equate to that. :miff:
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Old May 12th, 2006, 06:50 PM   #8
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Originally Posted by mschaffer66
Why don't they just get it over with and switch this country to communism since thats where we are headed anyway.
I am going to attempt to coin a new term in the English language. We aren't headed towards Communism. It is more like Coporatalism. The US government is owned by US Corporations.
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Old May 12th, 2006, 07:11 PM   #9
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I don’t have proof but I suspect there is real price gouging and they are all in collusion when ever there is the slightest delay in oil production real or perceived. The big oil companies do not seem competitive in terms of price at all, only compete on delivering more oil to a agreed upon price. For example if 1% of oil delivery is delayed or disrupted you often see a 10-15 % increase in price. You see price increases on things THAT MAY HAPPEN, and when they don’t happen you never see the prices reduced to below original level. Military action raises prices, military inaction raises prices, and exploration raises prices, lack of exploration raises prices. Best example was in the late 1990s some oil /gas distribution center in (I think greater Jackson area) a pipe burst and they lost something in the tens of thousands of gallons of gas. In metro Detroit the price shot up immediately even though the gas in the ground tanks at the stations was already paid for. .... and despite that tens of thousands of gallons is basically nothing in a regional economy of metro Detroit they shot up like 30 cents (this was when gas was like in the $.95 -$1.25 range) and stayed up for darn near a week. Total bullshit that gas could have been brought in from other great lakes states no problem….. and when you divide all that “missing” gas by all the stations and all the gas sold each day its not really missed. There is more difference in sales on a nice day to poor weather day regional than that. If its shitty weather for 2 days, no one goes and buys gas unless they need it. YOU NEVER SEE THE GAS STATIONS LOWER PRICES BY 30% WHEN SALES TAKE THE MOST MINUTE DECREASE!!! The price variation is only upwards.

There definitely is price fixing and gouging on all levels from back room deals involving CEOS to local dealers screwing us over like the Jackson dist. scam.


(i realise my example is overly specific to our area and not the greater problems in the industry but it clearly shows ANY disruption no matter how minor has IMMEDIATE price increase. More major changes never lower the price. Thats all i need to see to call it. And it only gets dirtier and dirtier when you exam the industry on the global level.)

Last edited by jamiesann; May 12th, 2006 at 07:29 PM.
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Old May 12th, 2006, 07:43 PM   #10
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Wrong, wrong, wrong. How is the price of oil determined day to day.

Read up on it.:miff:
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Old May 12th, 2006, 08:47 PM   #11
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Come on. You are smarter than this.

Quote:
Originally Posted by jamiesann
I don’t have proof but I suspect there is real price gouging and they are all in collusion when ever there is the slightest delay in oil production real or perceived. The big oil companies do not seem competitive in terms of price at all, only compete on delivering more oil to a agreed upon price. For example if 1% of oil delivery is delayed or disrupted you often see a 10-15 % increase in price.
But, who actually creates the increase? It is the traders and brokers all over the world that transact in the forward future markets, not the oil companies. This is a freely traded open market. These prices are not fixed by any single entity in the world. Ever.

Quote:
Originally Posted by jamiesann
You see price increases on things THAT MAY HAPPEN, and when they don’t happen you never see the prices reduced to below original level.
I will concede this point. Price do rise more rapidly than they decrease. But, again, this can not be pinned on the oil corporations. This is handled primarily at the local supplier/retailer level.

Quote:
Originally Posted by jamiesann
Military action raises prices, military inaction raises prices, and exploration raises prices, lack of exploration raises prices. Best example was in the late 1990s some oil /gas distribution center in (I think greater Jackson area) a pipe burst and they lost something in the tens of thousands of gallons of gas. In metro Detroit the price shot up immediately even though the gas in the ground tanks at the stations was already paid for. .... and despite that tens of thousands of gallons is basically nothing in a regional economy of metro Detroit they shot up like 30 cents (this was when gas was like in the $.95 -$1.25 range) and stayed up for darn near a week. Total bullshit that gas could have been brought in from other great lakes states no problem….. and when you divide all that “missing” gas by all the stations and all the gas sold each day its not really missed.
This is where you lost some of my confidence in your thinking.

As quoted from the FTC Bureau of Economics working paper titled, "MICHIGAN GASOLINE PRICING AND THE MARATHON-ASHLAND AND ULTRAMAR DIAMOND SHAMROCK TRANSACTION" Dated July 2005. http://www.ftc.gov/be/workpapers/wp278.pdf

"On June 7, 2000, the Wolverine Pipeline ruptured outside of Jackson, Michigan. As a consequence, no refined products were shipped on the Wolverine Pipeline between Jackson and Detroit from June 7 to June 16. After June 16, the Wolverine Pipeline operated at a reduced capacity until the end of August. The rupture of the Wolverine Pipeline caused a shortage of gasoline in eastern Michigan, which caused gasoline prices to rise to over $2 per gallon. The effects of this shortage spilled over into neighboring areas as purchasers of refined products sought to secure supplies. By the end of August, the effects of the Wolverine Pipeline rupture had largely passed."

The Wolverine Pipeline is the main supply line running from the Chicago Hub to Detroit. Oil and gas from the Gulf flow from the Henry Hub to Chicago, then thru the Wolverine Pipeline to the Detroit area. Somewhere around 100,000 gallons of gasoline were spilled due to the rupture. True, this is a small amount of the fuel used in SE Michigan over the course of a week. But the rupture was only spilling fuel for a very short period of time. The major impact was the closure of the pipeline for 10 days in the peak driving time of the year. Possibly several MILLION gallons of fuel were kept from flowing into Detroit. The main supply artery into SE Michigan was turned off. You don't just replace that capacity with a few semi's driving back and forth to the terminal in another state. You are completely wrong with your comment about being able to just get the supply from elsewhere. Supply was lowered so the price had to go up to curtail demand. I point out simple supply vs. demand fundamentals. Once the pipeline was fully restored and fuel was flowing again at 100%, the price immediately returned to normal levels. In the power business, we call this congestion on the grid, forcing local power prices to spike even though surrounding areas are still relatively cheaper.

Your comment about the fuel already being payed for that is in the ground astounds me. The price you are paying for fuel today isn't based on what they paid for the last load of fuel. It is based on what they are going to need to pay for the NEXT load. If the price of fuel on the market rises, they must increase their current price so that they have the required cash flow to pay the higher price for the next delivery. If they don't do this, they either need to dip into their reserve funds, or secure credit to pay for the additional cost of the fuel they need to purchase. If they continue to charge less than what it costs them to replace the fuel, they will eventually run out of cash and go out of business.

Quote:
Originally Posted by jamiesann
There is more difference in sales on a nice day to poor weather day regional than that. If its shitty weather for 2 days, no one goes and buys gas unless they need it. YOU NEVER SEE THE GAS STATIONS LOWER PRICES BY 30% WHEN SALES TAKE THE MOST MINUTE DECREASE!!! The price variation is only upwards.

There definitely is price fixing and gouging on all levels from back room deals involving CEOS to local dealers screwing us over like the Jackson dist. scam.


(i realise my example is overly specific to our area and not the greater problems in the industry but it clearly shows ANY disruption no matter how minor has IMMEDIATE price increase. More major changes never lower the price. Thats all i need to see to call it. And it only gets dirtier and dirtier when you exam the industry on the global level.)

You are absolutely correct in that any disruption in supply is going to have an immediate impact on current and future fuel prices. But, it is all part of the freely traded commodity market. This is not some right or left wing conspiracy by some big bad corporation to screw the world.

If people want to make a difference in this whole mess, they should call their legislators to have them repeal all of the tax subsidies that the big oil companies recieve. They were needed back in the 80's when the price of oil was dirt cheap and oil companies were going bankrupt. They were given to some extent as part of a national security issue. We had to give them incentives and tax breaks in order to maintain our domestic production. Those days are over and the subsidies should be eliminated as well.
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Old May 12th, 2006, 09:02 PM   #12
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Originally Posted by 84Scrambler
Come on. You are smarter than this.


But, who actually creates the increase? It is the traders and brokers all over the world that transact in the forward future markets, not the oil companies. This is a freely traded open market. These prices are not fixed by any single entity in the world. Ever.



I will concede this point. Price do rise more rapidly than they decrease. But, again, this can not be pinned on the oil corporations. This is handled primarily at the local supplier/retailer level.



This is where you lost some of my confidence in your thinking.

As quoted from the FTC Bureau of Economics working paper titled, "MICHIGAN GASOLINE PRICING AND THE MARATHON-ASHLAND AND ULTRAMAR DIAMOND SHAMROCK TRANSACTION" Dated July 2005. http://www.ftc.gov/be/workpapers/wp278.pdf

"On June 7, 2000, the Wolverine Pipeline ruptured outside of Jackson, Michigan. As a consequence, no refined products were shipped on the Wolverine Pipeline between Jackson and Detroit from June 7 to June 16. After June 16, the Wolverine Pipeline operated at a reduced capacity until the end of August. The rupture of the Wolverine Pipeline caused a shortage of gasoline in eastern Michigan, which caused gasoline prices to rise to over $2 per gallon. The effects of this shortage spilled over into neighboring areas as purchasers of refined products sought to secure supplies. By the end of August, the effects of the Wolverine Pipeline rupture had largely passed."

The Wolverine Pipeline is the main supply line running from the Chicago Hub to Detroit. Oil and gas from the Gulf flow from the Henry Hub to Chicago, then thru the Wolverine Pipeline to the Detroit area. Somewhere around 100,000 gallons of gasoline were spilled due to the rupture. True, this is a small amount of the fuel used in SE Michigan over the course of a week. But the rupture was only spilling fuel for a very short period of time. The major impact was the closure of the pipeline for 10 days in the peak driving time of the year. Possibly several MILLION gallons of fuel were kept from flowing into Detroit. The main supply artery into SE Michigan was turned off. You don't just replace that capacity with a few semi's driving back and forth to the terminal in another state. You are completely wrong with your comment about being able to just get the supply from elsewhere. Supply was lowered so the price had to go up to curtail demand. I point out simple supply vs. demand fundamentals. Once the pipeline was fully restored and fuel was flowing again at 100%, the price immediately returned to normal levels. In the power business, we call this congestion on the grid, forcing local power prices to spike even though surrounding areas are still relatively cheaper.

Your comment about the fuel already being payed for that is in the ground astounds me. The price you are paying for fuel today isn't based on what they paid for the last load of fuel. It is based on what they are going to need to pay for the NEXT load. If the price of fuel on the market rises, they must increase their current price so that they have the required cash flow to pay the higher price for the next delivery. If they don't do this, they either need to dip into their reserve funds, or secure credit to pay for the additional cost of the fuel they need to purchase. If they continue to charge less than what it costs them to replace the fuel, they will eventually run out of cash and go out of business.




You are absolutely correct in that any disruption in supply is going to have an immediate impact on current and future fuel prices. But, it is all part of the freely traded commodity market. This is not some right or left wing conspiracy by some big bad corporation to screw the world.

If people want to make a difference in this whole mess, they should call their legislators to have them repeal all of the tax subsidies that the big oil companies recieve. They were needed back in the 80's when the price of oil was dirt cheap and oil companies were going bankrupt. They were given to some extent as part of a national security issue. We had to give them incentives and tax breaks in order to maintain our domestic production. Those days are over and the subsidies should be eliminated as well.






Also reduce the state and federal gas tax.:tonka:
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Old May 12th, 2006, 09:38 PM   #13
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The rupture of the Wolverine Pipeline caused a shortage of gasoline in eastern Michigan, which caused gasoline prices to rise to over $2 per gallon.

I personally have never been turned away from any station because they had no fuel. When you stop getting fuel at one plant they just go to another. Its not as big of a deal as its made out to be and happens on a daily basis for all sorts of reasons.

I have hauled millions of gallons of propane out of St. Clair and Port Huron. Back about 5 or 6 years ago propane shot up to over $2.50 a gallon. The price at the rack NEVER got above $1.26. During normal times, if propane is say $1.29 most dealers pay about $.75/.80 a gallon at the rack. Now if they bought it in the off season and placed it into storage they can get it for about $.45-$.60 a gallon plus storage and shrinkage. Then when in the winter when the "shortage" comes about they sell you the same $.45-$.60 a gallon gas for whatever the market will get them NOT a standard 10%. They sit on millions and millions of barrels of fuel that is already bought and paid for and on hand.

Propane is a by product of Natural Gas and used to be blown off into the air to get rid of it. Now it costs more then Natural Gas because the market allows it. Diesel is a by product of Gasoline. Atm gas is $2.88 and Diesel is $2.99. Must be a shortage of Diesel some where.

As far as the BILLIONS that they posted for profit in a freakin quarter. That is what they can't hide, write off or give away for a retirement bonus.

Bottom line is that there is no real shortage then or now and no excuse to raise prices. They raise prices because they can and we will pay it.
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Old May 13th, 2006, 01:51 AM   #14
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Originally Posted by SuperBeast
I personally have never been turned away from any station because they had no fuel. When you stop getting fuel at one plant they just go to another. Its not as big of a deal as its made out to be and happens on a daily basis for all sorts of reasons.

I have hauled millions of gallons of propane out of St. Clair and Port Huron. Back about 5 or 6 years ago propane shot up to over $2.50 a gallon. The price at the rack NEVER got above $1.26. During normal times, if propane is say $1.29 most dealers pay about $.75/.80 a gallon at the rack. Now if they bought it in the off season and placed it into storage they can get it for about $.45-$.60 a gallon plus storage and shrinkage. Then when in the winter when the "shortage" comes about they sell you the same $.45-$.60 a gallon gas for whatever the market will get them NOT a standard 10%. They sit on millions and millions of barrels of fuel that is already bought and paid for and on hand.

Propane is a by product of Natural Gas and used to be blown off into the air to get rid of it. Now it costs more then Natural Gas because the market allows it. Diesel is a by product of Gasoline. Atm gas is $2.88 and Diesel is $2.99. Must be a shortage of Diesel some where.

As far as the BILLIONS that they posted for profit in a freakin quarter. That is what they can't hide, write off or give away for a retirement bonus.

Bottom line is that there is no real shortage then or now and no excuse to raise prices. They raise prices because they can and we will pay it.
In my mind, you cannot compare the price of oil to propane. I say that because I buy propane 1-2 times per year for my grill, while I purchase gasoline 2 times per week or so. The majority of people are the same way....thus there is higher demand in the oil market then there is in propane.

As far as the BILLIONS is concerned, good for them. If this was GM posting these numbers, SE Michigan would be loving it. They are in business to make a profit....bottom line. They are not a humanitarian organization with the best interest of the people in mind.
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Old May 13th, 2006, 07:42 AM   #15
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Quote:
Originally Posted by SuperBeast
I personally have never been turned away from any station because they had no fuel. When you stop getting fuel at one plant they just go to another. Its not as big of a deal as its made out to be and happens on a daily basis for all sorts of reasons.
During normal operations this is the case. However, when the Wolverine was shut down, the market reacted exactly as it should have. In order to reduce demand, the market price went up. People bought less. I remember. I was living in Ann Arbor at that point. It was a great example of supply and demand. As prices went up, people used less. This is the function of the market, to allocate resources to where they are most valued. Nobody knew at the start of the disruption how long the shutdown would last. The risk the market was trying to hedge against was a longer term outage. If the price of fuel in SE Michigan had stayed at a fixed level, consupmption would have continued at a high level, eventually resulting in serious fuel shortages. At this point, going to another plant for fuel that isn't there would have done nothing. The market worked, yet people that refuse to understand the market scream they were screwed due to their "entitlement" to something they don't own.


Quote:
Originally Posted by SuperBeast
I have hauled millions of gallons of propane out of St. Clair and Port Huron. Back about 5 or 6 years ago propane shot up to over $2.50 a gallon. The price at the rack NEVER got above $1.26. During normal times, if propane is say $1.29 most dealers pay about $.75/.80 a gallon at the rack. Now if they bought it in the off season and placed it into storage they can get it for about $.45-$.60 a gallon plus storage and shrinkage. Then when in the winter when the "shortage" comes about they sell you the same $.45-$.60 a gallon gas for whatever the market will get them NOT a standard 10%. They sit on millions and millions of barrels of fuel that is already bought and paid for and on hand.
Refer to my statement above. During the period leading up to times of high demand, the price of fuel is going to rise. The market players are buying up future deliveries, forcing the prices to rise, due to higher demand. Here I go again on that darn supply vs. demand crap. Since no one knows what the weather is going to do before it happens, the market has to evaluate and price in the risk of every possible eventuality in the market. Last winter's natural gas spike is a perfect example of this. In November you have EXTREMELY cold weather that lasts for 2-3 weeks. Record gas demand made suppliers go out and buy up more natural gas for delivery in January-April out of fear that the record setting cold weather would continue as predicted. But, what happened? January turned around to be the warmest January on record. At that point, suppliers realized that they had over bought and turned around and sold the extra amount that they bought. Now their was too much supply, they sold, and holy cow the prices went DOWN. Suppliers did exactly what they needed to do. The risk was that natural gas prices would hit $20-30 in the spot market. (Gas bought today for delivery tomorrow, which is the most volatile market.) Instead of taking the risk that prices would hit $20-30, they bought forward supplies at $15-16. You know why? To save YOU money in the event the prices spiked even further. But, yep, they are out to screw you. Now that we are in the spring, demand is low, so nat gas prices are low, back down in the $6-8 range for the next few months. But, as it gets hotter and demand goes back up, the price will go up. But, you know what? You can go out right now and buy some stock in energy companies right now at a discount because the price of energy is low. But, as energy prices go up, so does the value of their stock. It's a cycle that happens every year. Then when the prices are high, you can sell for your very own profit from the energy market.

Quote:
Originally Posted by SuperBeast
Propane is a by product of Natural Gas and used to be blown off into the air to get rid of it. Now it costs more then Natural Gas because the market allows it. Diesel is a by product of Gasoline. Atm gas is $2.88 and Diesel is $2.99. Must be a shortage of Diesel some where.
No, not a shortage. The supply side of the equation hasn't changed. Demand for the product has risen. As demand goes up, supply has to go up with it, or prices WILL rise to induce less demand.


Quote:
Originally Posted by SuperBeast
As far as the BILLIONS that they posted for profit in a freakin quarter. That is what they can't hide, write off or give away for a retirement bonus.
Why should they hide the fact that they made money? That is what they are in the business of doing. They aren't there to provide you what you want for nothing. The market works. The world is using more energy. The granola eating tree huggers refuse to allow a realistic domestic drilling and refining program, so artificially limiting the supply to the market. If you can get them out of the picture and allow increased drilling and allow new refineries to be built, the price of energy will go down. But, only for as long as the oil and gas is available to extract. We have gotten most of the easily extracted fuel out of the ground. Now we are drilling holes in rocks, fracturing them, inserting massive heaters underground, and trying to literally suck oil and gas out of rock formations out in Wyoming, Utah, and Colorado. The cost to do that is insane. One single natural gas well in Wyoming currently costs about $4 MILLION dollars to drill. 5-6 years ago, that figure was $1.5 to $2 Million because they were still going after nice big easily drilled pools of underground oil and gas.

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Originally Posted by SuperBeast
Bottom line is that there is no real shortage then or now and no excuse to raise prices. They raise prices because they can and we will pay it.
There is no current shortage because the market is doing what it is meant to do. If gas was still $1 a gallon, do you think people would be willingly buying the hybrids, diesels, and small economy cars that are selling like crazy now? No. We would still all be driving huge V-8 land yachts like we did in the 80's. But, because the market price has risen, people are slowly taking very active steps to reduce their demand. This is called an economic market incentive. So, no, in one way you are correct, there is no current shortage. But, if demand were allowed to increase like it would have with no price increases, we would be facing shortages. People would use their price limited fuel all the way to the last drop with no concern that we would be running out.
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Old May 13th, 2006, 08:31 AM   #16
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True, oil is a much larger market, but propane is a much larger industry then just filling 20lb cylinders.

My point was that prices rise and fall based on the market more so then on the supply. Very few gas stations wait until they get their next load of fuel to raise prices. All they need to see is the guy down the street raise his, then they raise theirs. Not because they have to send $.10 a gallon more to the gas company for the stock they already bought and have sitting in their tanks at the station. Dropping the price on Tuesday (everybody is home) so they can raise it on Thursday (everyone leaving for the weekend). Always seems to be a shortage before holiday weekends also.

The fact is that everyone pays more for everything now. Since everything requires fuel/energy to be transported or manufactured. I haven't seen to many pack mules running up and down the road with a FEDEX sticker on the side or hooked to a 53' van trailer.

So yeah, they are making great profits and from a business stand point they are doing great.
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Old May 13th, 2006, 10:36 AM   #17
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Originally Posted by SuperBeast
True, oil is a much larger market, but propane is a much larger industry then just filling 20lb cylinders.
Yes, I completely understand this. There is a 1,000 gallon tank buried in our yard. We heat with propane.

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Originally Posted by SuperBeast
My point was that prices rise and fall based on the market more so then on the supply.
You have no concept of how a market works and what drives prices. The market price is driven by supply and demand. Anything that affects either of those two parameters is going to have some impact on actual prices.

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Originally Posted by SuperBeast
Very few gas stations wait until they get their next load of fuel to raise prices. All they need to see is the guy down the street raise his, then they raise theirs. Not because they have to send $.10 a gallon more to the gas company for the stock they already bought and have sitting in their tanks at the station. Dropping the price on Tuesday (everybody is home) so they can raise it on Thursday (everyone leaving for the weekend).
Like I posted earlier in this thread. If the price of refined gasoline increases, the station MUST increase their price now to pay for the future delivery costs. If they wait till the next load to increase their price, they are going to have negative cash flow (less money when they are done than when they started).Gas stations typically make very little profit on gas sales. From what I have read it is normally in the $0.02-0.03 per gallon that they actually make per gallon. Their profit is on the extras they sell in the convenience store. If they don't charge what it is going to cost to replace their fuel, then they will eventually run out of cash and close shop.

Quote:
Originally Posted by SuperBeast
Always seems to be a shortage before holiday weekends also.
Again, think of supply and demand. When are retail gas sales volumes at their highest? During holidays when huge numbers of people are driving longer distances. More demand, same supply, equals higher prices. Simple economics.

Quote:
Originally Posted by SuperBeast
The fact is that everyone pays more for everything now. Since everything requires fuel/energy to be transported or manufactured. I haven't seen to many pack mules running up and down the road with a FEDEX sticker on the side or hooked to a 53' van trailer.

So yeah, they are making great profits and from a business stand point they are doing great.
No, the aren't making "great" profits. Based on the enormous sales volumes, they aren't making huge profits. Still like I have posted before, they make about 10% profit margins.
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Old May 13th, 2006, 01:45 PM   #18
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nice explaination of things 84Scrambler.
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Old May 13th, 2006, 02:02 PM   #19
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nice explaination of things 84Scrambler.
Sometimes I wonder why I even bother explaining this stuff over and over.
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Old May 13th, 2006, 02:34 PM   #20
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Sometimes I wonder why I even bother explaining this stuff over and over.
heh, hey, some of us understand it. Multiple times. :p
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