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Interesting. So maybe its higher so that the refinery can recupe the loss? I thought Exxon was making billions of dollars in profit?
They are making billions off of crude oil sales. Their refining division is barely making a profit at all. Its refining division, by the way, has to buy crude oil at market rates.
Exxon's profit margins are actually not that impressive - something like 7-8%. Amazon.com has profit margins in the 20% range.
oh, well makes sense, except, how were station owners able to stay alive when prices were rising. I mean if they were charging 4.15 per gallon, making about 3 cents a gallon, how did they survive when the next shipment cost them 4.21 a few days later. It seems like the stations would have to anticipate it going up and artificially bring prices up just for insurance that they could open the doors the following week. Im thinking, on the way down now, maybe they have crated a little breathing room. what do you think?
I don't know the mechanics of the industry well enough to say for sure, but my guess would be that they still have plenty of inventory at the $4.12 gas to mark it up enough to cover the difference. In other words, the pumps are probably far from dry when the next delivery comes, which allows them to always keep the average retail cost about $0.03 above cost.
I would hate to be a service station owner. Not only do they make very little money, they have so many people thinking they're the enemy (not accusing you, by the way) when it comes to high gas prices.
Another reason why prices are slower going down is because inventory is probably less. Demand for gasoline did decline over the summer as a result of higher prices, and the last thing stations want is excess gasoline that's not being sold, as gasoline spoils and costs them money to have just sit there. If they lower prices too quickly, demand would pick up faster than supply could replace it and you'd have dry tanks. A gas station never wants to hang a sign that says "no gas" - barring a natural disaster or something similar that causes EVERYONE to sell out of gas.
well, I thought it was their oil, but it was our refinery's. We turn it into OUR gas dont we? I don't understand why its so drastically differently priced. The Graphic is going down alot slower than it went up, I mean Dramatically.
I understand the futures market, or at least I thought I did. Its going down despite the current hurricane season. Or is that why the refinery price is artificially up, even though the OIL price is way down. Man Im so confused. The way I figure it, we are paying an average (at the pump) of about 5 cents more for ever dollar that is paid for a barrel of oil than we did 5 months ago. Except on the way down. Why has the price of the refined gas separated so far from the price of a barrel of OIL?
You own a refinery?? I do not. The government does not.
Here is the thing. Refiners buy oil and process it and sell it to you as gas. Right now refiners are still working off oil inventory they purchased when oil prices were much higher, so they can't just turn it into gas and sell it to you at a huge loss now can they?
If they did such a thing, how would they make any money?
I'm glad to see at least one person here didn't go to school in Zimbabwe.
I am no math wizard, just an average joe like most of you. Will some economic geek out there please explain why gas prices are still this high. Last March, when has had hit 103 a barrel, my gas stations in the area averaged 2.99 a gallon. Its 104 today, but gas is at 3.49 a gallon. I know its not going down 50 cents in the next couple days. Best I can hope for at this point is that it goes down another nickle. Whats going on,and why is it still so expensive at the supermarket. Gas has been going down for a while now. Time for some relief
We were paying 3.50 a gallon when gas had RISEN ro $121 a barrel. This ratio works out when we are going up, but goes to hell when we are on our way down.
if the powers that be have anything to do with it, they're probably using smaller barrels. lol
am i the only one who has noticed the clandestine shrinkage in quantities on most consumer goods?
well howcome they didnt do that at a cheaper price when it was on its way up. I understand your point, but if they would also have the cheaper oil per barrel when they refined it back in march. Im not sure, did I miss your point?
to be fair when the price per barrel went crazy it took a little time to reflect at the pump if my memory serves me correctly
I'm glad to see at least one person here didn't go to school in Zimbabwe.
oi, i went to school in zim.
let me tell you something there's not much difference in the way of monetary policy. the difference is in foreign policy. mad bob's military isn't strong enough to force commodity producers to accept his paper.
........."20 marlboro and a tank of gas, please bud"
am i the only one who has noticed the clandestine shrinkage in quantities on most consumer goods?
That was done with Ice Cream a few years ago. The packages got smaller while the price stayed the same. It's also happening with potatoe chips. 16 ounce bags are now 15 ounce bags. Sneaky way to make it look like they are not raising the price. I guess they count on few people noticing the slightly smaller package ( but they can't fool you and me ). They are following in the footsteps of the government. Governments rarely raises taxes directly these days. They steal our money via inflation and other governement gimmicks to support the corporate welfare state.
IF there was a direct correllation between the price of a gallon of gas at the pump and the cost of a barrell ( 55 gallons in a barrel ) of oil, a $1.00 move in the price of a barrel of oil would result in a 2 cent change at the pump.
am i the only one who has noticed the clandestine shrinkage in quantities on most consumer goods?
That was done with Ice Cream a few years ago. The packages got smaller while the price stayed the same. It's also happening with potatoe chips. 16 ounce bags are now 15 ounce bags. Sneaky way to make it look like they are not raising the price. I guess they count on few people noticing the slightly smaller package ( but they can't fool you and me ). They are following in the footsteps of the government. Governments rarely raises taxes directly these days. They steal our money via inflation and other governement gimmicks to support the corporate welfare state.
IF there was a direct correllation between the price of a gallon of gas at the pump and the cost of a barrell ( 55 gallons in a barrel ) of oil, a $1.00 move in the price of a barrel of oil would result in a 2 cent change at the pump.
Around here in Phoenix, I figure its running at 3.38 cents per gallon at the pump for ever 1 dollar per barrel it was over 4 cents per gallon at the pump for every 1 dollar per barrel on the way up until it peaked, but on the way down, we are getting screwed.
Couple of misconceptions floating around here, one is that a barrel is 55 gallons - it's actually 42 gallons. Depending on what kind of crude, and how you refine it, according to Google search it looks like you get about 20 gallons of gasoline - of course you also get Diesel, Kerosene, lube oil, etc. See EIA link below:
The price of gasoline depends on a lot of different factors, there is about 50 to 75 cents in state/federal tax, the refining and shipping costs are partially dependent on oil price but not completely.
A barrel of oil yields these refined products (percent of barrel): 47% gasoline for use in automobiles23% heating oil and diesel fuel18% other products, which includes petrochemical feedstock—products derived from petroleum principally for the manufacturing of chemicals, synthetic rubber and plastics 10% jet fuel4% propane3% asphalt(Percentages equal more than 100 because of an approximately 5% processing gain from refining.) Crude Oil FAQs - Energy Information Administration
Frankly "Evil Big Oil" does a damn good job producing useful, salable products from that barrel of oil, and as a motor fuel, gasoline is damn hard to beat. If you have a better idea, the market is open to you...
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). They are following in the footsteps of the government. Governments rarely raises taxes directly these days. They steal our money via inflation and other governement gimmicks to support the corporate welfare state.
47% gasoline for use in automobiles
