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Old 08-10-2012, 06:29 PM
 
Location: Bothell, Washington
2,800 posts, read 5,019,377 times
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I have a question about how the gas prices are spiking now here on the west coast. I know about the oil refinery fire in California and the strain that will now put on supply until the refinery comes back online. But an expert on the news two days ago said they expect this will cause a 30 cent increase in prices.

However, in the 2-3 days since this happened most stations in my area have already gone up 30 cents or more. The price went up twice in one day at two stations I go by, which seems to make no sense since they don't take delivery of new gas twice in a day, so that higher cost wouldn't have hit them yet.

The conspiracy theorist in me says this is just the stations using this latest excuse to squeeze as much money out of all of as quickly as they can. Does that seem to be truly the case in these situations, or would there be a valid reason for spikes twice in a day?
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Old 08-10-2012, 06:57 PM
 
Location: The Triad (NC)
31,387 posts, read 69,894,293 times
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Quote:
Originally Posted by jm31828 View Post
The conspiracy theorist in me says this is just the stations using this latest excuse to squeeze as much money out of all of as quickly as they can.
No! That can't possibly be the *real* reasoning. Could it?
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Old 08-10-2012, 07:53 PM
 
3,335 posts, read 2,709,398 times
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Fuel suppliers love money more than people? Say it ain't so Bobby! Say it ain't so!
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Old 08-10-2012, 08:49 PM
 
Location: Bothell, Washington
2,800 posts, read 5,019,377 times
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Haha look, I know likely that greed is the answer, but I was just curious if there was any other real, valid reason.
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Old 08-10-2012, 08:51 PM
 
Location: Business ethics is an oxymoron.
2,169 posts, read 2,614,736 times
Reputation: 4851
Remember. When prices are low, the free market has spoken. When prices go up, we're getting ripped off.
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Old 08-10-2012, 09:02 PM
 
Location: Planet Eaarth
8,955 posts, read 18,769,970 times
Reputation: 7193
Quote:
Originally Posted by jm31828 View Post
I have a question about how the gas prices are spiking now here on the west coast. I know about the oil refinery fire in California and the strain that will now put on supply until the refinery comes back online. But an expert on the news two days ago said they expect this will cause a 30 cent increase in prices.

However, in the 2-3 days since this happened most stations in my area have already gone up 30 cents or more. The price went up twice in one day at two stations I go by, which seems to make no sense since they don't take delivery of new gas twice in a day, so that higher cost wouldn't have hit them yet.

The conspiracy theorist in me says this is just the stations using this latest excuse to squeeze as much money out of all of as quickly as they can. Does that seem to be truly the case in these situations, or would there be a valid reason for spikes twice in a day?
With corn crop coming in a much, much lower yields than anyone ever expected not only will food prices jump up so with the cost of making ethanol for use in blended gasolines.

Midwest Drought Hits Gas Pump As Ethanol Prices Rise

Gasoline Prices Rise as Drought Weighs on Ethanol - WSJ.com

E85 Prices

Tax credit for ethanol is set to expire which will add to gas cost/prices..........
Expiring ethanol credit to add to gas price jump :: WRAL.com
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Old 08-10-2012, 10:08 PM
 
5,609 posts, read 9,900,805 times
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The gas marketplace is based on real world economics. What if someone told you due to a little problem that isn't publicly known Apple is going to have a hard time selling iphones exactly 3 months from now and that is when the marketplace will hear why for the first time. Would you short Apple's stock today or would you wait 3 months? Fuel suppliers operate on the same logic, this well known supply shortage is common knowledge and everyone is reacting. If supply is about to decrease the market needs to have a higher price to create reduced consumption or else things get even worse.
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Old 08-11-2012, 05:19 PM
 
Location: Volcano
12,971 posts, read 25,277,046 times
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Even more directly, if you knew your gas delivery tomorrow would cost 30 cents a gallon more than the delivery you got yesterday, would you wait until tomorrow to raise your retail prices on the gas you have in your tank now?

I believe most business owners would raise the prices today. No conspiracy, just normal market economics at work.
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Old 08-11-2012, 05:40 PM
 
Location: The Triad (NC)
31,387 posts, read 69,894,293 times
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Quote:
Originally Posted by jm31828 View Post
Haha look, I know likely that greed is the answer, but I was just curious if there was any other real, valid reason.
California formulation is different than the other states.
The already reduced capacity hit by -any- hiccup in refining or shipping will be felt.
The fungible international oil price plays a part but a small part relative to these CA specific factors.
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Old 08-11-2012, 08:35 PM
 
3,335 posts, read 2,709,398 times
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Quote:
Originally Posted by Des-Lab View Post
Remember. When prices are low, the free market has spoken. When prices go up, we're getting ripped off.
When prices are low, it is to hedge regulation. The prices would be high all the time, if that threat were to wane.

Study the Oil Markets as they are tied to the military industrial complex.
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