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Last time oil was $100 a barrel was March 2008. Now gasoline is about $3.70 a gallon down from $4.40 earlier this summer but not down 40% like the cost of oil. Somethings wrong! What is up?
Prices are sticky going down. I concur, I'd love to see the $3/gallon charge at the pump. The less I spend on fuel, the better. Now, if we could just get fuel down to $2.50/gallon, I think we would be in a sweet spot for commerce, taxes and general revenue re-distribution. I could actually afford to drive to places.
I think that behind the scenes the government wants gasoline prices to stay up so that people will continue to work towards alternative energy and reduced energy use. If gasoline gets below $2.50 a gallon there will be alot of SUV's back on the road and there will be less action that alternative energy and high MPG cars.
Gas jumped 20-25 cents a gallon in florida when they had a hurricane threat back up to $3.75 for the 87 octane. Storm threat passes and the price of oil drops $15 a barrel and yet the gas prices are stuck at $3.75 Its all a price fixing scheme in my area. There is no way 100s of stations of all different brands would have the exact same price whether its moving up or down.
Im all for businesses making money but damn, exxon makes 12 billion dollars in 3 months and I cant get my quarter back off the price.
Last time oil was $100 a barrel was March 2008. Now gasoline is about $3.70 a gallon down from $4.40 earlier this summer but not down 40% like the cost of oil. Somethings wrong! What is up?
Absolutely nothing is wrong.
Oil is traded in futures, purchased months in advance. That oil sits in storage until it can be refined into gasoline, which then sits in storage for 3-6 months depending on inventory levels.
Gasoline prices are averaged against cost to eliminate wild price fluctuations. That's why when oil prices rise, the price of gasoline rises immediately, but only slightly. They're actually doing you a big favor. By averaging the price of gasoline relative to current and future supplies, the price is actually lower over the long term.
Exactly! Do you calculate what your tennis shoes should cost? Oil and Gas prices are related but do not have to be in a fixed proportion.
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