Jump to content
Washington Football Team Logo
Extremeskins
Forum Rules and Guidelines

Why is the price of fuel rising when the price for a barrel of oil is dropping?

ljs

By ljs
in The Tailgate

Recommended Posts

ljs

ljs

Posted
Posted

I'm hoping someone can help me understand this. I believe it's just more greedy companies suckering us for money, they know we have to drive places.

Last July a barrel of oil was $147 and I was paying roughly $4.15 per gallon.

I have been paying attention lately, and until today, the price for a barrel of oil has been dropping, and is right about $45 per barrel. It's about a third less, which should make fuel $1.38/gallon.

So...if in the last month, the price of oil has steadied (slight rise and fall each day, but has not gone over $50 per barrel)...then why do gas prices keep rising? I was paying approx $1.75 per gallon last month, while now it is at $2.06. (in Washington state it is approx 30 cents higher per gallon.)

I just cannot figure out a legitimate reason for this, other than the weather is getting nicer, more driving is going on and fuel companies are being *******s.

I would love someone with knowledge on this to help explain.

Link to comment
Share on other sites
Dictator

Dictator

Posted
Posted

I just cannot figure out a legitimate reason for this, other than the weather is getting nicer, more driving is going on and fuel companies are being *******s.

I would love someone with knowledge on this to help explain.

January-March: Cold Weather. High Demand for Heating Oil. Southerly winds.

April-June: Preperation for Summer Gas Blends. Rain.

July-Mid Sept: increased demand during vacation driving season. Hurricane Threat. someone dropped a toaster strudel on the oil platform.

Mid-Sept-Dec: Preperation for Winter Blends, demand for home heating oil. Seal Eaten by shark in the middle of the ocean.

Link to comment
Share on other sites
ljs

ljs

Posted
  • Author
Posted
January-March: Cold Weather. High Demand for Heating Oil

April-June: Preperation for Summer Gas Blends

July-Mid Sept: increased demand during vacation driving season/Hurricane Threat.

Mid-Sept-Dec: Preperation for Winter Blends, demand for home heating oil.

I'm confused at how the fuel for my car rising is related to the price for heating oil rising during the winter?

Link to comment
Share on other sites
The Evil Genius

The Evil Genius

Posted
Posted
You are leaving out the whole refinery process. Gas is tied to oil, but also has its own set of variables.

In saying that, I still believe companies collude in the oil business. Just no way to prove it.

Of course the collude - hello, OPEC. They cut production to drive prices up.

That said, it has little to do with what you pay at the pump. Last I read, about 1/6 of your cost comes from refining costs and additives.

Link to comment
Share on other sites
ljs

ljs

Posted
  • Author
Posted
They go up every spring and peak in summer. Thats called demand.

right, I know. But do you think it's very ethical to raise the price on goods, that you as an owner have not had to pay more for? Considering the "state of the union" right now, I would hope that somone has some sort of ethical bone in their body. Glad I didn't hold my breath.

Link to comment
Share on other sites
JMS

JMS

Posted
Posted
I'm hoping someone can help me understand this. I believe it's just more greedy companies suckering us for money, they know we have to drive places..

Actually I would say it's fewer greedy companies which know control the majority of gas pumps in this country and can effectively act as a monopoly and set prices independent of their underlying raw materials like oil...

Other than that I think you understand what is going on pretty wall....

2000 mergers in the oil industry from 2000 through 2004, and today a handful of companies control and centrally set the price of gass as 80% of the pumps in the country are under their direct control.

The laws which were put in place to keep this from happening are basically useless because they only control the price of gass refined in this country. Since we haven't built a new refinery in this country in 40 years and our oil companies have built all our refineries in the Caribean or Mexico; we basically have zero controls in place to track or stop the gaoging.

Link to comment
Share on other sites
PleaseBlitz

PleaseBlitz

Posted
Posted
right, I know. But do you think it's very ethical to raise the price on goods, that you as an owner have not had to pay more for? Considering the "state of the union" right now, I would hope that somone has some sort of ethical bone in their body. Glad I didn't hold my breath.

Every company in every industry prices their goods based on supply AND demand. If you are asking for charity from an oil company, i suggest that you not hold your breath and consider purchasing a bicycle.

Link to comment
Share on other sites
PleaseBlitz

PleaseBlitz

Posted
Posted
Of course the collude - hello, OPEC. They cut production to drive prices up.

That said, it has little to do with what you pay at the pump. Last I read, about 1/6 of your cost comes from refining costs and additives.

OPEC is a monopoly, which is only illegal in some countries, and certainly isnt illegal internationally. So yes, of course OPEC does whatever they can to maximize profits.

The OP's point was that the price of a gallon of crude has gone DOWN, meanwhile the price for a gallon of gas has gone UP.

For the record, about 60% of the price of a gallon of gas is for the crude, 20% is refining costs (this includes the oil companies profit), 10% is running the gas stations, and 20% is taxes (depending on state).

Link to comment
Share on other sites
ljs

ljs

Posted
  • Author
Posted
Every company in every industry prices their goods based on supply AND demand. If you are asking for charity from an oil company, i suggest that you not hold your breath and consider purchasing a bicycle.

Considering their CEO's make millions a year, they rake in billions of profit each year...if we ask them to be fair- I don't consider that a charity. It's called doing the right thing, imo. (I do believe in capitalism, just wish people weren't so greedy)

Would love to ride a bike to work, but I live 25 miles from my job. And I have to dress up, so if I did ride a bike, I'd need another shower:D

Link to comment
Share on other sites
The Evil Genius

The Evil Genius

Posted
Posted
OPEC is a monopoly, which is only illegal in some countries, and certainly isnt illegal internationally. So yes, of course OPEC does whatever they can to maximize profits.

The OP's point was that the price of a gallon of crude has gone DOWN, meanwhile the price for a gallon of gas has gone UP.

For the record, about 60% of the price of a gallon of gas is for the crude, 20% is refining costs (this includes the oil companies profit), 10% is running the gas stations, and 20% is taxes (depending on state).

Talk about giving 110%.

;)

Link to comment
Share on other sites
PleaseBlitz

PleaseBlitz

Posted
Posted
Considering their CEO's make millions a year, they rake in billions of profit each year...if we ask them to be fair- I don't consider that a charity. It's called doing the right thing, imo. (I do believe in capitalism, just wish people weren't so greedy)

Would love to ride a bike to work, but I live 25 miles from my job. And I have to dress up, so if I did ride a bike, I'd need another shower:D

Again, they are setting prices where supply meets demand. Just like everyone else. Their product just happens to be one of the most highly demanded products you will find anywhere in the world.

Link to comment
Share on other sites
PleaseBlitz

PleaseBlitz

Posted
Posted
Talk about giving 110%.

;)

:rotflmao:

Taken from here:

http://autos.aol.com/article/hybrid/why-does-gas-cost-so-much/20070831142609990001

Blame Ted Leonsis. :)

Crude oil -- 57%

Finding the crude oil

Getting the crude oil out of the ground

Transporting the crude oil to the refinery

Maintaining a reserve capacity of crude oil

Profit

Refining the crude oil into gasoline -- 18%

Producing special blends of gasoline to meet local clean air government regulations

Transporting the gasoline to the gas station

Profit

Selling the gasoline at a station -- 11%

Operational costs

Marketing costs

Profit

Taxes, federal and state -- 20%

Link to comment
Share on other sites
ljs

ljs

Posted
  • Author
Posted
i heard on the news that a cow in Calcutta sneezed today.

Expect gas prices to rise accordingly.

:hysterical: exactly. good thing I carpool though. And I get sweet discounts on fuel where I do my grocery shopping..so that helps.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Go to topic listing

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...