Gas prices high - due to supply, so why no shortages?


Karlin
#1
One things not mentioned in the news about the rising and allready huge cost of the price of gasoline is this:
THE ACTUAL COST OF SUPPLY, REFINING, DISTRIBUTION HAVE NOT GONE UP.

The news stories has consumers saying things like "Well, if the price goes up, somebody has to pay for it"
{ brainwashed acceptance...]

They cite short crude oil supply, and the bottleneck at the refineries making gasoline out of crude as being the reason for the increases and high price. Although crude production is maxed out, that doesn't actually raise the cost of production, or price price at the pumps, its just an opportunity to charge more... ITS A CHOICE.

They could cite exploration costs rising due to shortages, but nobody is actually doing substantially more exploration and development. We might wonder whats going on there too, but not here.

STRANGELY, THERE IS NO SHORTAGES at the pumps.
Does anyone see that that is wrong? That if the price is high due to shortages, why can anyone go out and get as much gasoline as they like [and can afford]?

The only reason remaining is that "since there is a supply and demand advantage, we can raise the price and they will have to pay for it, nobody will undercut us"

OPEC agrees to a certain crude price, and shortages themselves do not raise that price. Its just a choice they are making.

Other sides in the global economic picture, even our PM Martin, could demand that OPEC [etc.] bring the price down due to the economic chaos of fuel at this price, chaos that could bring the various economic engines to a halt, and then nobody could afford gasoline. This kind of trade agreement is common, and good for al sides. Yet, nobody is speaking up, and the silence is deafening, as they say.
 
no1important
#2
I believe all oil companies are in cohoots. Funny when a crisis happens gas prices go up right away (even though gas is in tanks at station, and they never sell cheaper paid gas off at normal cost but raise it immediatly)) but when it goes down prices stay up as "they have to clear stock bought at higher prices" .

I know they "investigated" this before but they are very good at hiding things and since political parties recieve donations from big oil, they won't step on their toes.

Funny with so called competition between Gas companies they always seem to have the same price.......
 
p106_peppy
#3
Quote: Originally Posted by no1important

I believe all oil companies are in cohoots.

Yes, they go by the name OPEC.
 
CanadaLoyalty
#4
Gasoline demand is fairly inelastic, but theoretically when the price reaches a certain point for a sustained period consumers will switch to alternatives, putting less stress on the supply chain.
 
Karlin
#5
I was reading the business section...It was talking about how the crude gets to market. I think I made an error in saying OPEC is raising the prices, this sounded a lot more complex.

OPEC doesn't sell oil to the market, there is a whole 'nother layer called marketers.

What happens is they bid as high as they have to to fill their contracts, but they do most of it in advance so it can be gauranteed ion case of supply problems. When they are all bidding for next years oil and it is all being snapped up due to high demand, the price goes up.

It still seems like OPEC is the ones raising the price. THey get as much as they can for futures oil.
Some political leaders might put pressure on them to keep the price down.
not Bush's friends, who get a percentage, based on the price of a barrel of crude, and the higher it is, the more per barrel he gets.

Marketing, Importing, Refining, Pipelining, probably shipping - its all based on a percentage, they get a portion of each barrel. They all get more when its higher.

so what do you think? Is the business section just making confusion so we don't know who to point the finger at?
 

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