$5.00 Gasoline... Here we go again

Here we go again...

I suppose everyone remembers what gasoline prices were, in the summer preceding the 2008 economic decline. (That word just doesn't seem to convey the seriousness of the situation, does it)

It's just an opinion, but I still believe that was the final push of our economy, which was already teetering on the cliff. I think all of the rest of the excuses, i.e. mortgage issues, etc. were just a result of the fuel prices. The way I see it, every single cent of Americans' disposable income went into their car's fuel tank. With no money to spend on "stuff", the economy took a nose dive.

In the 12 month period, July 2007 to July 2008, gasoline prices rose over 50%, to $4.12 per gallon. In my family's situation, with three vehicles on the road everyday, it is significant. At about a tank of fuel per vehicle per week, or 50 gallons per week, That's $400 extra per month. It wasn't easy for us and I know it was extremely difficult for many.

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www.GasBuddy.com... Average&city2=&city3=&crude=n&tme=48&units=us

Crude oil peaked at just over $145 per barrel at the end of July 2008.

And, now we're on the rise again, with speculation of $5 per gallon, this summer. Crude is now at about $97 per barrel.
www.nyse.tv...

A barrel of oil is 42 gallons. Less than half of that, 19.5 gallons, goes to the production of gasoline. So, about half the cost of a barrel of oil is for the production of gasoline, or approximately $2.50 per gallon at $100.00 per barrel.

$0.65 per gallon are taxes, which is a significantly higher margin than the retailer, usually less than $0.10 per gallon.
energyalmanac.ca.gov...

Now to my question for you all. If you agree the potential for economic disaster is imminent, due to rising fuel prices, what should be done about it? I've read numerous comments demanding the government control pricing by regulating the oil companies. I know I do not want that. I, also, do not think it would be wise for the governments to suspend or even decrease taxes, at this time. But, what is the answer?

In the past, here on ATS, I've discussed boycotting oil companies to force a price decrease. As a matter of fact, since the summer of 2008, I have stopped purchasing gasoline from Exxon-Mobil stores. My reasoning was Exxon's obvious disregard for the pain of the people, by bragging about their record setting profit during that period.

Some have claimed my idea would not have an effect, due to the fungibility of gasoline. However, I still disagree. Though the boycott of the branded gasoline may not affect Exxon-Mobil, the loss of profits by the retailer would cause a backlash and put pressure on the oil company. Exxon-Mobil makes a lot of money from their franchised stores. If the retailers, unfortunately hurting from decreased sales, begin abandoning the Exxon-Mobil franchises, that should bring some pain to the oil company. What will be the effect on Exxon's stock prices, when their brand name begins disappearing.

Here is an interesting article, regarding Exxon-Mobil franchisees, from May 2008. While Exxon was announcing record profits, they were starving out retailers, to increase their profits even more. www.washingtonpost.com.../components

From the article

Even some of Exxon's successful and loyal dealers complain. Jerry Daggle owns five Exxon stations in Northern Virginia, and even though they have different competitive conditions and prices, "Exxon magically lets me make about 8 cents a gallon" at each one, he said.

And, this interesting tidbit...

Daggle, who has been an Exxon dealer for two decades after working his way up from pumping gas, said he has done well. But he still cannot fathom how the oil company can charge him different wholesale gasoline prices for each of the five Northern Virginia stations he owns. The stations all sell the same Exxon-branded gasoline, delivered from the same terminal in Newington, where it arrives via the same pipeline. Sometimes, Daggle said, it's even dropped off by the same truck and driver hours apart on the same day.

And I thought this comment tells the story of from where the real money is made.

Three years ago, when Daggle bought the Gainesville station, a share of Exxon stock was about $50. Buying and fixing up the station has cost him $800,000, and he hasn't yet drawn a profit from it. "If I had bought the stock," he said, he would have nearly doubled his money and would have "never lifted a finger."

So, what say you ATS? Consumer driven price regulation? Or do you have a better idea.

Well... guys... another reason to buy yourself a bicycle

reply to post by WTFover


Not trying to be rude, but outside of the USA a lot of us pay much higher than $5 a gallon, at times in australia regular petrol has been $1.50 per litre and thats in major cities.. In my 4wd we had to pay $1.77 per litre out west for diesel so its defenitely worse in other places. Although we all know that oil has fallen in price by a huge margin yet we are still paying extremely high prices for it which is why we need someone to fast track making that water powered car

I just sold my car to a junkyard and bought a horse, bought 300 dollars in feed,what else needs to be said,tell obama to keep his aid to egypt for himself

The only good thing with $5 gasoline prices is people will drive less. That means the freeways will be less jammed and commute times will improve drastically. Which will mean better gas mileage on the commute and less gas consumed.

There are many downsides though, it drives the prices of everything else up. Fuel surcharges will skyrocket and prices of everything will rise within weeks.

It will be interesting watching the direct and indirect after effects of more expensive oil.

reply to post by Farnhold


Good thought and acceptable for short distances, but so many in my rural area have longer commutes. And, in my business, I must have a pickup available for towing boats.
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reply to post by BigBruddah


True and definitely not rude, but may countries pay even less than us. And, the U.S. is the third highest oil producing country in the world. Shouldn't we benefit from that?

I'm curious about your prices though. Do you know how much of that is taxes?
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Originally posted by wiredamerican
The only good thing with $5 gasoline prices is people will drive less.

Unfortunately, that's never been the case. Also, you would think people would slow down, but they don't.

Fuel surcharges will skyrocket and prices of everything will rise within weeks.

Thanks for bringing that up. I'm sure most people are not aware that, when fuel prices rise, fuel surcharges are added to freight charges. And, I'll bet even fewer realize that those surcharges seldom go away.

It will be interesting watching the direct and indirect after effects of more expensive oil.

I'm afraid we already know that outcome...

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notmytribe.com...

I can scarcely bear to read it. No matter what source of the oil~abiotic is my guess~it is a crusher. Some random thoughts: In the '08 campaign john mccain promised to try to make it possible for Americans to 'drive a little further on their vacations'. A perusal of used cars coughed up a LOT of old pontiacs and such, well maintained but no longer affordable to operate, and a great hulking mass of rolling stock tonnage was systematically destroyed by the saboteur in chief, with the brilliant, diabolical, 'cash for clunkers' plan. What troubles me is that for small car drivers, and bikers, especially when using electrical vehicles which run silent, given that everyone's tweeting and looking at their lap, never using signals etc..., that there may be no way to survive economically, or physically. The roads are ruined by man's harvesting of 'technology'. It would be bad if it were just a few links in the chain, but everyone's doing it, so a driver cannot trust the landscape except to NOT trust it, and be prepared for anything.... Now add to this the price of gas and the only positive change would be less bad drivers...maybe some canceled cellular accounts....

And yet many of the other G labelled nations suffer much higher pricing. Fact is the US has relatively cheap gas so forgive me if can't extend any sympathy. I laugh at the guy whining on the news in New York City that it costs $40 to fill up his car....that's a bargain by today's standards.

Some prices to compare US$/US gallon

Italy - 6.97
Germany - 7.46
France - 6.89
Denmark - 7.84
Netherlands - 8.37
Sweden - 7.19
UK - 7.50

src

brill

I had the same theory about the crash, it was the gas which provided the tipping point.

As it was in 2008, the president of Shell stated under oath that it was speculation that created the pricing.
There is an old MM thread here that has all the details... In the end it is speculation, this practice of treating America like a urinal and a casino is a step too far, I am done with it. I hope we learn, we are free, we are free to
be screwed because of our attitude towards business and the sanctity of it all.

I am done


Thats WTF, great work,

In the end I have no idea

Free to take it I suppose

GBA

Originally posted by brill
And yet many of the other G labelled nations suffer much higher pricing. Fact is the US has relatively cheap gas so forgive me if can't extend any sympathy. I laugh at the guy whining on the news in New York City that it costs $40 to fill up his car....that's a bargain by today's standards.

Some prices to compare US$/US gallon

Italy - 6.97
Germany - 7.46
France - 6.89
Denmark - 7.84
Netherlands - 8.37
Sweden - 7.19
UK - 7.50

src

brill

And you are aware of what happens when this nation tanks???

What ever the case this place cannot sustain it, the EU cannot sustain an American free fall

reply to post by brill


What about Kuwait @ $0.85, Libya @ $0.64, Jordan @ $1.17, Qatar @ $0.83, UAE @ $1.82 ?

Like I said earlier, the U.S. is the third highest oil producing country in the world. We should be benefitting from that.

ETA:

According to Wikipedia, the UK has an effective fuel tax rate of 175% and the Netherlands 68.84%.
en.wikipedia.org...

I'd really be raising some hellwith that.

As much as I want to slam Exxon, I have to slam the legislators the most. They are the ones who have vowed time and time again to reduce our dependency on oil and to close the loopholes that these companies take advantage of. Furthermore, the policies of this President/ former Presidents plus legislators concerning the Middle East over the past years has IMO contributed to the problems we are facing today.

Exxon is merely playing the games the way legislators have written it. You and I would do the same. If government offered us an opportunity to miss out on paying thousands of dollars on taxes, we would be fools not to jump on it. That's the reason why many investors are buying Exxon's stocks because they know there is money to be made.


As for people who have no sympathy for the US because your gas prices are higher, we are not asking for your sympathy. We know we are part of the problem. But as others have stated, your future depends on us. If we fall, you guys won't be too far behind.

Originally posted by Janky Red
And you are aware of what happens when this nation tanks???

What ever the case this place cannot sustain it, the EU cannot sustain an American free fall

I dunno, have a party I suppose. I'd really like to see how many people are complaining percentage wise about this, but still manage to buy plasma TVs and maintain priorities like iphone subscriptions. Not painting everyone the same but I'd bet it would be an interesting figure.

brill

Originally posted by WTFover
reply to post by brill

 

What about Kuwait @ $0.85, Libya @ $0.64, Jordan @ $1.17, Qatar @ $0.83, UAE @ $1.82 ?

Like I said earlier, the U.S. is the third highest oil producing country in the world. We should be benefitting from that.

Good point. One of the benefits of a 'global community' is that prices are speculated upon in a global fashion. Nevermind that there's so much oil in the states that they had to 'walk away' from the gulf find. They are punishing us, pure and simple.

Originally posted by WTFover
reply to post by brill

 

What about Kuwait @ $0.85, Libya @ $0.64, Jordan @ $1.17, Qatar @ $0.83, UAE @ $1.82 ?

Like I said earlier, the U.S. is the third highest oil producing country in the world. We should be benefitting from that.

Ok so what, I would fully expect those nations to have much lower gas prices. I agree there should be benefiting from your statement but then again this isn't something that's occurring over night either, the problem is far reaching no question there. Point is others pay more, the US has fairly cheap pricing, I think the US just needs to deal with it.

brill

reply to post by brill

I normally avoid using Wikipedia as a source, but here's some info you might consider

Germany - 7.46 €0.6545 ($0.90 USD) per litre plus Value Added Tax (19%) on the fuel itself and the Fuel Tax

Netherlands - 8.37 68.84% tax

UK - 7.50 "175% effective tax"

Originally posted by WTFover
reply to post by brill

 

I normally avoid using Wikipedia as a source, but here's some info you might consider

Germany - 7.46 €0.6545 ($0.90 USD) per litre plus Value Added Tax (19%) on the fuel itself and the Fuel Tax

Netherlands - 8.37 68.84% tax

UK - 7.50 "175% effective tax"

Yes the taxes are unbearably high and disgusting, no argument there but in the end the consumer still has to pay a higher price regardless. It sounds to me that if the majority of US people are unhappy then they need to do something about it, like a general strike. If what is being alleged is the case (US produces a lot of oil and they are being pinched) no one else is going to fight their battles for them so time to do something.

brill

Currently in my area, for regular it's around $3.79/gallon. The price of gas increased by 0.20 within about week and a half, it's definitely a drastic change. But, people don't seem to slow down when it comes to purchasing gas, that's what I've been noticing anyway.

If the price keeps going up, which I think it most likely will, I'm not going to be driving any longer. It would be cheaper traveling to work via public transportation.

I'm also seriously contemplating whether or not I should try to protest next to a nearest gas station, doubt that will do much but maybe I can get some people rowdy. But I'm pessimistic so I don't think there is a point in doing so.

Originally posted by jam321
We know we are part of the problem. But as others have stated, your future depends on us. If we fall, you guys
won't be too far behind.

Ok so what are you proposing then? Do other countries make efforts to ensure that your people have cheap gas to put in their cars? Please elaborate. It sounds more like your problem (and youve outlined some of that) is predominantly a domestic problem, hence it requires a US solution of and by its people ?

brill

reply to post by jam321


Ansolutely. Another head scratcher for me is why our government gives billions of dollars in research grants to the oil companies for development of "alternative fuels"? Ludicrous!