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View Full Version : Beware the Gas price spike


Mr. Laz
12-13-2005, 09:18 AM
gone up about 30 cent per gallon in the last few weeks in my area(overland park,ks)


jumping up another 12 cent per gallon or so at several places this morning.


you might wanna top of ye tank before the price jumps again. :cuss:

Saulbadguy
12-13-2005, 09:30 AM
you might wanna top of ye tank before the price jumps again. :cuss:
Which just exacerbates the problem.

Fried Meat Ball!
12-13-2005, 09:32 AM
Heh... heh... exacerbates. Heh... heh.

Donger
12-13-2005, 09:46 AM
gone up about 30 cent per gallon in the last few weeks in my area(overland park,ks)


jumping up another 12 cent per gallon or so at several places this morning.


you might wanna top of ye tank before the price jumps again. :cuss:

Cool. Nothing like panic buying to keep the price down.

Donger
12-13-2005, 09:49 AM
gone up about 30 cent per gallon in the last few weeks in my area(overland park,ks)


jumping up another 12 cent per gallon or so at several places this morning.


you might wanna top of ye tank before the price jumps again. :cuss:

BTW, laz, what were you paying a few weeks ago?

Mr. Laz
12-13-2005, 09:50 AM
Which just exacerbates the problem.
Cool. Nothing like panic buying to keep the price down.
ya know ... i try and do a good thing by letting people know that gas prices are going up ... maybe help them save a few buck.



and all i get is a bunch of pole smokers giving me crap about it.



all ye bastiges can just **** off

Fried Meat Ball!
12-13-2005, 09:53 AM
This is a typical almost-holiday gas hike. After New Years it'll miraculously start going down again.

BOHICA - Bend Over, Here It Comes Again

Mr. Laz
12-13-2005, 09:53 AM
BTW, laz, what were you paying a few weeks ago?
why, so you find yet another wanker ass comment about it.



no thanks

Donger
12-13-2005, 09:57 AM
why, so you find yet another wanker ass comment about it.



no thanks

I was actually curious. If you've seen a jump of $.40 over the last few weeks, it would be an anomaly. Here are the numbers from KC:

Kansas City

Today = $2.076
Yesterday = $2.066
One Week Ago = $2.042
One Month Ago = $2.023
One Year Ago = $1.625

So, if prices really have gone up by ~$.40 over the last few weeks, then you were right around $1.65/gallon then.

Is that correct?

Donger
12-13-2005, 10:02 AM
This is a typical almost-holiday gas hike. After New Years it'll miraculously start going down again.

BOHICA - Bend Over, Here It Comes Again

What's miraculous about prices going up with increased demand?

Donger
12-13-2005, 10:03 AM
It's jumped from $1.99 to $2.17 here over the last week or so. I wonder what lame-ass excuse the oil companies are using this time. Oh wait, I bet I know, they need to gouge those who want to travel to be with their families during the holidays!

Good lord.

Where is 'here?'

JohninGpt
12-13-2005, 10:06 AM
In the Hampton Roads, VA area it has went from 1.95 to 2.13 in the last four days. I'm taking leave and staying home next week, so hopefully I won't need gas until after the holidays.

Fried Meat Ball!
12-13-2005, 10:06 AM
What's miraculous about prices going up with increased demand?
What's miraculous is two-fold... first, the demand has not gone up yet. People won't be traveling for another two weeks. Second (and this may be the thing that irritates me the most), the oil industry will NEVER sack up and say, "Yeah, we're raising prices because of the holiday." They always blame it on something else. It's the principle of not wanting to be lied to... I'd more willingly accept the hike if they'd come out and say why they're doing it rather than lie about it.

Donger
12-13-2005, 10:08 AM
What's miraculous is two-fold... first, the demand has not gone up yet. People won't be traveling for another two weeks. Second (and this may be the thing that irritates me the most), the oil industry will NEVER sack up and say, "Yeah, we're raising prices because of the holiday." They always blame it on something else. It's the principle of not wanting to be lied to... I'd more willingly accept the hike if they'd come out and say why they're doing it rather than lie about it.

You're aware that the price of crude has been increasing over the last few weeks, yes?

Fried Meat Ball!
12-13-2005, 10:11 AM
Good lord.

Where is 'here?'
Hooked on Phonics worked for me!!!

.

Donger
12-13-2005, 10:12 AM
Hooked on Phonics worked for me!!!

.

Just wanted to be sure. I'm not really in Frankenstein, MO so maybe he's not really in Omaha.

Donger
12-13-2005, 10:15 AM
Is the increase proportionate to the 9% increase in pump prices?

That, and getting ready for the holiday season, yes. Bunny can explain this better than I. Perhaps he'll hop along. But, it has to do with the stations anticipating the increase in wholesale gasoline pricing coming. Economically speaking, I forget what the exact definition is.

Skip Towne
12-13-2005, 10:19 AM
Just wanted to be sure. I'm not really in Frankenstein, MO so maybe he's not really in Omaha.
All indications are that you don't know where you are.

Donger
12-13-2005, 10:20 AM
All indications are that you don't know where you are.

Behind enemy lines in Colorado, actually.

Fried Meat Ball!
12-13-2005, 10:42 AM
That's what I don't understand, how can they raise the price "in anticipation"? IMO it should be based on what they paid for the gas that you're pumping in your car.
The argument is that it works both ways. When gas prices go up, they're selling higher than what they paid for it.... when gas prices go down, they're selling lower than what they paid for it. It averages out.

Donger
12-13-2005, 10:55 AM
That's what I don't understand, how can they raise the price "in anticipation"? IMO it should be based on what they paid for the gas that you're pumping in your car.

Here's probably the best explanation that I've found. If Bunny shows up, he can explain it very well too.

(4) There is no rational reason why retail gas prices at the local pump should skyrocket before a hurricane or immediately after a natural disaster, since the retail gasoline at the pump was purchased in a previous period and at a lower wholesale cost. That retail gas prices do rise during such events is merely more evidence of price gouging and exploitation. Fiction.

Here is another common misconception about gasoline prices that desperately needs dispelling. As before, our good friends supply and demand may be able to help, along with an understanding of how expectations influence markets.

First, the supply-side component. As mentioned above, cost does not justify prices, and the retail price of gasoline is not determined by the price of wholesale gasoline at the time it was purchased and pumped into the tanks at the local gas station. Instead, the retail price of gasoline at the pump is based upon expected replacement costs relative to current demand. In technical terms, the cost of the wholesale gasoline already in the reservoir at the local pump is a "sunk cost" (literally and figuratively), while parting with it by selling it to retail gasoline consumers is an "opportunity cost." In economics and in business, opportunity costs matter more than sunk costs.

Gasoline companies, knowing that Gulf Coast hurricanes can destroy oil rigs, damage underwater pipelines, and disrupt oil refining capacity, will expect that a hurricane-induced oil and gasoline shortage will push up the wholesale cost of gasoline. Expecting an increase in the future price of gasoline, local gas stations will logically pass some of that anticipated increase on to current retail petrol consumers. And, the opportunity cost of selling that gasoline will be reflected in the demand and willingness to pay for it among competing buyers, along with the anticipated cost of replacing it with higher-priced wholesale supplies.

Think about it this way: If you are a homeowner looking to relocate, would you sell your current home for the exact amount of money you paid for it, plus repair and improvement expenses incurred during the time of ownership? If the cost of something in one market determines the price at which it is sold in another market, then yes, you would. But, that is not the case, as the example should make clear.

The price you paid for your home does not typically even enter into the resale price decision because it is a sunk cost; it is historical, in the past, based upon market conditions that were different at the time of purchase. The price you ask for it when you want to sell it is based upon new market conditions, new developments, changes in supply and demand in the housing market that have occurred since you purchased the home, meaning that you might sell the home for much more or for much less than you paid at the time you bought it.

The same goes for the petrol in the tanks at gas stations, and the analogy to home sales is appropriate even when we recognize that the time duration between the purchase and resale of a home is usually much longer than between the purchase and resale of gasoline. Market price is based upon the (opportunity) cost of replacing that wholesale gasoline, plus the changes in the demand conditions that have occurred since the wholesale gasoline was pumped into the retailer's tanks. If that opportunity cost is expected to rise, the retail price will rise immediately to reflect that expectation.

Additionally, there is a demand-side component that is even more important. It, too, is related to expectations. Consumers, knowing that Gulf Coast hurricanes can retard oil and gas production and restrict supplies by knocking out refining capacity, will also expect prices to rise. On the basis of these expectations, and even before a hurricane makes landfall, consumers will increase their demand for gasoline immediately, hoping to buy some gasoline and top off their tanks before prices rise.

However, when all consumers act in tandem based upon similar expectations of rising prices, overall market demand will increase. And, because the supply of gasoline at the retail pump is fixed, at least momentarily, the increase in market demand based upon expectations of a future price hike leads to a self-fulfilling prophecy: prices rise immediately, even before the hurricane has had a chance to damage the supply chain, simply because demanders are more intensely bidding for the scarce supply of petrol at the local gas pump. This rise in price is an unmitigated good from the perspective of the market as a whole. It is precisely this rise in price that forestalls or prevents a shortage of gasoline and forces consumers to economize on its consumption, ensuring that there is enough gasoline to go around.

So, there certainly are rational reasons why the price at the pump jumps immediately when some change occurs in the global oil and gas markets, and the laws of supply and demand do a good job of explaining this connection. Now, admittedly, we may not like this fact, and we may complain loudly about the higher gasoline prices that result. But, we should at least take some comfort in understanding why.

Skip Towne
12-13-2005, 11:15 AM
I hate the government but it is time for somebody to keep the oil companies in check.

Donger
12-13-2005, 11:17 AM
I hate the government but it is time for somebody to keep the oil companies in check.

What would you like done to them?

Calcountry
12-13-2005, 11:18 AM
ya know ... i try and do a good thing by letting people know that gas prices are going up ... maybe help them save a few buck.



and all i get is a bunch of pole smokers giving me crap about it.



all ye bastiges can just **** offI appreciate the spirit in which you posted, however, people can save themselves more money, by avoiding jackrabbit starts off red lights, properly inflating tires, tuning the engine, and cruising at 60 mph than you ever can save by trying to beat a price increase. The stations are going to charge what they charge, and you are going to buy it when your tank is empty. Lets get the most out of our tanks shall we?:

Skip Towne
12-13-2005, 11:20 AM
What would you like done to them?
99 years in the electric chair.

Calcountry
12-13-2005, 11:20 AM
I hate the government but it is time for somebody to keep the oil companies in check.Its time for somebody to put Directv in check, greedy motha fuggers. Charging me for a whole season of Chiefs football, and not showing me games that are moved to Friday.

Donger
12-13-2005, 11:22 AM
99 years in the electric chair.

Why?

Calcountry
12-13-2005, 11:24 AM
99 years in the electric chair.BTW, California put someone to death, I am so proud of them.

Donger
12-13-2005, 11:42 AM
That's the best post on this subject. It's disturbing that many people don't think about conservation until gas hits $3/gal.

And, we still pay considerably less per gallon of fuel than do other industrialized countries.

Donger
12-13-2005, 11:54 AM
Heck, if you want to attack it from that direction, you could point out that a gallon of gas costs less than a gallon of beer.

I'm not attacking anything. Merely pointing out a fact.

asdf
12-13-2005, 11:57 AM
mmmm......gallon of beer.... :drool:

Calcountry
12-13-2005, 11:59 AM
The Europeans are more sophisticated because they pay 6 bucks pre gallon and ride the trains everywhere. Everyone that I talk to, that visits Europe, thinks that it is so chique to pay 6 a gallon or ride the train in Europe.

Calcountry
12-13-2005, 12:37 PM
That's the best post on this subject. It's disturbing that many people don't think about conservation until gas hits $3/gal.What would you expect from a conservative?

Simply Red
12-13-2005, 12:53 PM
gone up about 30 cent per gallon in the last few weeks in my area(overland park,ks)


jumping up another 12 cent per gallon or so at several places this morning.


you might wanna top of ye tank before the price jumps again. :cuss:

Yeah, I drive an ARMADA!!!!!!!!!!