THE LOGIC OF GAS PRICES

 

 

Three days ago the price of gas at our local station was $3.54; yesterday it was $3.51 and today it is $3.57.   Can anyone explain this?

In a  normal business model you buy a product at wholesale price, you add a percentage mark-up as a profit margin and sell the product retail at a fixed price.

Now, a gas station buys bulk wholesale gas at the price of $X.00, the owner figures his profit margin and set a price… then the next day he raise it, and the next day the raise it again and that evening he lower it?   This is the same gas that he paid a fixed amount of money to purchase; so, why isn’t the price fixed until his next purchase?  

And, who decides on the price changes? 

I feel like someone is sitting in an office in some corporate behemoth, and to break up the monotony, a couple of times a day, tosses a dart at a string of numbers; then pushes a button and thousands of gas station owners run out and change their prices.

Is this some kind of collusion between the oil giants and the financial section – something to do with gas futures?   If so it is a fuck job on the general public and should be government regulated (but, of course, the lobbyist that actually run this country will insure that regulation of the oil and financial sectors never happen.)

My Toyota RAV-4 has a twelve gallon gas tank, I get twenty-five miles to the gallon and I travel less than seven thousand miles a year; so this isn’t an ISIL terrorism level concern for me.

But I can’t help but ask: What the fuck?

the Ol’Buzzard

FOOL ME ONCE SHAME ON YOU!

FOOL ME ONCE SHAME ON YOU!

Off shore oil drilling again raises concerns with the latest SNAFU from a major oil company.   A Shell drilling rig broke loose during towing and ended up beached on an Alaskan island.   So far no oil spill.    Another oil rig in the arctic seas has all but been condemned by the U.S. Coast Guard inspectors, sighting safety and environmental concerns. 

The major oil companies are the most profitable concerns ever to exist on earth.   The published profits of these companies are obscene when compared to world economies, and yet they operate here in the United States with subsidies, tax breaks and special consideration.   It is a reasonable assumption that oil payola is regularly channeled into the coffers of politicians in the Senate and Congress of the United States and to officials of other countries. 

At present a barrel of oil is selling at $93.19.   But the actual cost of oil is much higher.  When we add in the U.S. military forces assigned to protect oil concerns, foreign aide to third world oil producers, oil spill clean-up cost, tax considerations and subsidies the cost likely sky rockets to $500.00 or more per barrel.   This does not include the environmental damage to the oceans, land and atmosphere.   We can not put a cost of the lives lost in recent military campaigns, oil worker deaths and illnesses resulting from fossil fuel pollution. 

Both Democrats and Republicans protect the oil interest; but, the Republicans go the extra mile denying climate change.  

Here in Maine our energy policy requires that we produce 4% of Maine electricity from alternative methods, and that this increase each year by 1% so that by the year 2017 10% of our electricity will be produced by alternative sources.   This is the law – up until now.  

However, our Republican Governor is pushing a bill that will freeze the alternative energy component at 4%.    He states that alternative methods are more expensive than oil produced electricity; and in true Republican fashion, he says that staying on the oil standard will ‘produce more jobs and attract more business to the state.'  

Micro or Macro - at Both National and State Levels - Oil Rules.

FOOL ME TWICE ( 3,4,5,6… TIMES) SHAME ON ME!

the Ol’Buzzard

A BUZZARD EGG OMELET #13

I am a critical thinking person.  I have a math/science background.  I believe in logic, - cause and effect.   I even understand (to some extent) Chaos Theory.   But there is one thing in my everyday life that I am totally confused by: Gas Prices.

With a business model – a commodity – a grocery store buys a case of peas at wholesale price then figures out the percentage of markup necessary in order to guarantee their retail profit.  The can of peas is then placed on a shelf and sold at that price.

At a gas station the owner buys gas at a wholesale price.   He then figures the percent of markup in order to make a retail profit.   He then sets the price on the pump to resale the gas and extract his profit margin.  Then the next day he raises the price; and that evening he raises the price again; the next day he jumps the price a nickel higher; then the next day he lowers the price a penny:  What the hell is going on here?

If asked about this he may tell you that the next time he has to buy gas the product will cost more.   This doesn’t wash.   The grocery store does not change the price of peas daily in order to adjust to a possible icrease in wholesale pea prices at their next purchase. 

We are told that the oil supply is plentiful.  We know that here in the US oil companies have wells capped and off line in order to regulate prices.   These oil companies pollute our environment, keep oil prices high, collect huge subsidies from the government and buy Senators and Congresspersons in order to slow and disrupt our move to clean, non-fossil fuel energy.   They are the most profitable companies that have ever existed on the face of the earth. 

All that aside, what the hell is going on at the gas pump?

I’m just asking.

The Ol'Buzzard