Then why is it illegal for a gas station to charge whatever they want? Its called gouging, and they get fined..
That's only in times of emergency.
Gas stations can price their fuel at any price they want.
But thanks to capitalism, we have the option of going to the station down the street to pay less for it. So it's a competitive market, which keep prices as close to wholesale cost as possible.
This may surprise you, but gas stations make very, very little money. selling gas.
gouldc wrote: Wow, 9 billion net income in 3 months with a profit of 7.5 billion. These are net numbers here. I know this topic has been hashed out many times but this is simply outrageous.
Their gross profit after investment is a little over 7%; almost as good as the pharmaceutical companies.
Then why is it illegal for a gas station to charge whatever they want? Its called gouging, and they get fined..
That's only in times of emergency.
Gas stations can price their fuel at any price they want.
But thanks to capitalism, we have the option of going to the station down the street to pay less for it. So it's a competitive market, which keep prices as close to wholesale cost as possible.
This may surprise you, but gas stations make very, very little money. selling gas.
I feel for gas prices as much as the next person but doesn't it seem strange that everyone hits on this subject only? everyone blames the president? I don't agree with a lot of things that goes on but however if you look at the majority of the people in this world that make these statements they are either saying it because the cost really hurts them in the wallet or they drive these huge vehicles. I don't care what anyone says you can charge us $10.00 a gallon and we will BUY it period. gas is a necessity not a commodity. for all the complaints for gas why isn't there just as many complaints about our employers not paying us more to make the difference or food cost or the cost to replace a car?? I think gas is just something easy to pick on when the big picture has everything in it. furthermore if gas is such a issue why do we keep trading in for larger vehicles and trailers???? I might be off base but its my opinion.
2008 Jayco 1207
2002 Suzuki XL-7 "Surprisingly Powerful Little Engine That Could "
Tekonsha P3 Brake Controller
" still maintain that gas/diesel prices are not yet high. When one eliminates all driving other than for work, food and medical services then the price has reached a point of being "too high".
As long as you turn the key to go camping/RV'ing, or to see a movie, or to visit the theater, or watch a sporting event, or whatever you do when you're not working, getting food, or seeking medical attention, then the price is not yet high."
Questiion for ya, since a/c was invented in the fifties , would you consider elec necessary? Would you consider the telephone necesssary?
If Enron was punished for manipulating prices, what do you think the oil companies are doing ? When you go buy gas today at 3.55 and that night, they raise the price to 3.60 because their supplier told them when they bought next time, the price was goin gup 3 cents, who do you think is paying for their gas? Just about every service station will admit to this and the good ole govt says it is ok. Is it?
Isnt gasoline and diesel a necessary public utility , just like elec, nat gas, and water? Should it be ?
Or you just happy because your 401K made a good choice years ago?
Perhaps we , as voters, should examine our priorities and make a few changes, like may all the senators and congress.
Pretty simple if you ask me. Think gas prices are to high, then dont buy it. Think your wages are to low, look for another job. Isnt America great. For the record this post was influenced by American made beer that was priced at what they thought the market could bear, not what you think its really worth.
ljr wrote: As one of the owners I'd like to thank everybody for the contribution to my retirement fund.
Me too, to a very small degree. One of the more silly comparisons on this post is comparing the oil company(ies) to utilities. Yes, utilities are regulated and in most jx, a utility has to show that it has incurred costs in order to justify a rate increase....
....but the difference is, if the utility does indeed show that increased costs justify a rate increase, then the utility gets the rate increase.
Are all of those who are so vocal about attacking oil co. profits (which as a % of revenue are lower than many industries) equally vocal and willing to guarantee a certain profit....no matter the cost to continue to find and produce oil & gas?....and willing to guarantee that profit with users money?
After all, that is the regulated utility model.
YES - I am. Stockholders would be guaranteed a profit, which would make a great stock for little old ladies who need guaranteed income. JUST LIKE THE ELECTRIC UTILITIES.
But it would be a REASONABLE rate, and not the butt *&^% we are getting now....
pronstar wrote: This may surprise you, but gas stations make very, very little money. selling gas.
This is where I'm confused.
The oil companies' revenue comes from the sale of fuel at gas stations. The stations have to pay more for their product, and have to pass the cost along to us. But, they're making little profit no matter what the cost to the consumer. But, the price of gas is much higher than it used to be, so there's a lot more cash coming into the station. Therefore, more money must be going to the gasoline supplier - the guy who brings it to the station. Somehow I don't think it's he who's making all the money.
Now, the price of a barrel of oil is higher, which means that Shell is paying more for their raw materials. It seems obvious there's way more money going to our oil suppliers like Canada and Saudi Arabia.
If the gas station isn't making much, and the oil well owner is making way more, how is Shell making more?
pronstar wrote: This may surprise you, but gas stations make very, very little money. selling gas.
This is where I'm confused.
The oil companies' revenue comes from the sale of fuel at gas stations. The stations have to pay more for their product, and have to pass the cost along to us. But, they're making little profit no matter what the cost to the consumer. But, the price of gas is much higher than it used to be, so there's a lot more cash coming into the station. Therefore, more money must be going to the gasoline supplier - the guy who brings it to the station. Somehow I don't think it's he who's making all the money.
Now, the price of a barrel of oil is higher, which means that Shell is paying more for their raw materials. It seems obvious there's way more money going to our oil suppliers like Canada and Saudi Arabia.
If the gas station isn't making much, and the oil well owner is making way more, how is Shell making more?
Most of the major oil companies are also on the other side of the lucrative market. . . exploration and production of unrefined crude. This is what a "barrel of oil" is - unrefined crude oil. This is what is available on the futures / commodities markets for speculation and investment.
After production, they can sell it, sell part of it, send it to their own refineries (if they operate any), and move it down the road to the various oil products and byproducts that they will eventually have. Out of this, only a percentage becomes gasoline and gets trucked to the local convenience store. . . where, yes, the local owner of the gas station has to respond to the fluctuating prices that are basically pushed on them - they cannot choose their vendor for each shipment, so they have to accept the price they are given.
Because of the commoditization of oil, some investors are buying it and storing it like you would gold. . . expecting the price to continue to increase. This has a negative impact on quantity supplied which in turn raises prices.
*I am not in the oil business, so there could be a few words I use synonymously that are "reserved" words within the industry.
2005 Chevrolet Silverado 2500HD Crew Cab SB LS 6.0L 4x4 4.10
DW, DD (May, 2007), DS (October, 2008), and me
the_vfox wrote:
Follow the money. What drives the price of oil up is the speculators bid ding the price up on the world market. Neither the oil companies or the government controls that. If you want to be peeved at someone, go take some of those speculators to task.
I'm a speculator, but contrary to popular belief, I don't control the price. I merely buy, and when the price goes up I sell. If I think the price is going to go down, I sell for future delivery, and when the price goes down, I buy it back. That is called "speculating" - If I am wrong about whether the price is going up or down in the future, I lose. Where in that do you see me setting the price. The current market sets the price, I merely buy and sell at the market price.
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