Gas prices

[gounion]

I don’t recall ever being is a meeting where supply and demand was discussed when it came to pricing. We always looked at profit margins. If our cost went up eventually we had to raise out prices to offset be it labor, direct materials, overhead, etc. when you go to the investment community, they don’t look at supply and demand curves. The bank doesn’t look at supply and demand curves.

That's simply bullshit. Look at what's happening in autos right now. Because there's been a shortage of new cars due to the global shortage in computer chips, the dealers have been charging way above the MSRP:

“The fact that an overwhelming majority of consumers are paying above sticker price would have been unthinkable even just a year ago,” said Jessica Caldwell, Edmunds’ executive director of insights. “This is, in part, driven by affluent consumers being willing to shell out more cash to get the vehicles that they want, but there’s also a vast population of individuals who are being forced to do so simply because they need transportation.”

On average, a car buyer paid $728 above MSRP in January.

Last year at this time, a car buyer would have gotten a new car at an average discount of $2,152. In January 2020, the average transaction price was $2,648 below sticker.

Both Ford and GM have tried to mitigate the practice of tacking on excessive surcharges for popular and hard-to-get new vehicles.

In early January, Ford warned its dealers not to upsell reservations for the popular Ford Lightning F-150 EV truck. Some were charging more than $10,000 surcharges above sticker. The automaker also wanted customers to sign a contract preventing them from reselling it within a year.

OF COURSE prices are set by supply and demand. That's why Pharma Bro was charging hundreds of dollars for a Epi-Pen that cost $5 to make. That's why drug companies charge exorbitant prices for their drugs while they have patent protection, because you can't get it from anyone else. And that's why the prices go way down when they lose that protection and other companies can provide the same drug.

So let's be clear: you are going to try to tell us that when gas reaches seven bucks a gallon, that's because the cost of production by our domestic oil companies have risen that much, right?

When fuel costs go up, we generally see a general increase in prices. When labor rates go up, we generally see an increase in prices. It isn’t because supply and demand were affected. Ask Glenn about fuel surcharges.

No. The increase in the minimum wage has never caused inflation. For one thing, that's because for things like fast food, which relies on minimum wage workers, the food companies compete heavily on price.

And you can go into a unionized grocery store, with higher labor costs, and you'll find their prices are basically the same as non-union stores. And actually, I pay more if I go to the local non-union Publix than I do when I go to the local unionized Kroger.

[JoeMemphis]

That's simply bullshit. Look at what's happening in autos right now. Because there's been a shortage of new cars due to the global shortage in computer chips, the dealers have been charging way above the MSRP:



OF COURSE prices are set by supply and demand. That's why Pharma Bro was charging hundreds of dollars for a Epi-Pen that cost $5 to make. That's why drug companies charge exorbitant prices for their drugs while they have patent protection, because you can't get it from anyone else. And that's why the prices go way down when they lose that protection and other companies can provide the same drug.

So let's be clear: you are going to try to tell us that when gas reaches seven bucks a gallon, that's because the cost of production by our domestic oil companies have risen that much, right?
No. The increase in the minimum wage has never caused inflation. For one thing, that's because for things like fast food, which relies on minimum wage workers, the food companies compete heavily on price.

And you can go into a unionized grocery store, with higher labor costs, and you'll find their prices are basically the same as non-union stores. And actually, I pay more if I go to the local non-union Publix than I do when I go to the local unionized Kroger.

In your auto example, the supply of chips is down while the demand for autos has not changed. So dealers are able too sell their cars at sticker or above. However, there is a limit to which you can raise prices in the marketplace depending on the elasticity of demand. If you raise auto prices too high, it will affect the demand for autos as people will be priced out of the market. The demand for epipens is not elastic. However, overtime other competitors have entered the epipen market and have driven the price down.

My point is that supply and demand is macro economic theory that explains how the market works over time. Individual companies don’t set pricing on the supply and demand curve. There are numerous other factors that affect that decision. I can tell you for a fact that a general increase in the cost of labor or materials will generally result in increases in prices as companies will seek to maintain their margins. If you don’t believe that, ask Glenn about fuel surcharges. Trucking companies don’t just eat the increase in fuel costs, they pass it along to the consumer.

[gounion]

In your auto example, the supply of chips is down while the demand for autos has not changed. So dealers are able too sell their cars at sticker or above. However, there is a limit to which you can raise prices in the marketplace depending on the elasticity of demand. If you raise auto prices too high, it will affect the demand for autos as people will be priced out of the market. The demand for epipens is not elastic. However, overtime other competitors have entered the epipen market and have driven the price down.

My point is that supply and demand is macro economic theory that explains how the market works over time. Individual companies don’t set pricing on the supply and demand curve. There are numerous other factors that affect that decision. I can tell you for a fact that a general increase in the cost of labor or materials will generally result in increases in prices as companies will seek to maintain their margins. If you don’t believe that, ask Glenn about fuel surcharges. Trucking companies don’t just eat the increase in fuel costs, they pass it along to the consumer.

Really? Then why do I still get free delivery from Amazon?

Glenn gets fuel surcharges, because he is paid by the mile (which I wouldn't work for). If his fuel costs him more than he gets per mile for the load, then he simply parks his truck, because as much as you owners would like it, Glenn's not going to work for free. So, they have to increase their pay to him if they want him to continue to work.

Supply and demand is real. You guys just want to pretend it's not, so that you can pretend that labor costs will raise prices. I mean, when CEO wages double every year, do you say THAT is inflationary? Of course not.

Prices are set based upon supply and demand. Period. If the unionized grocer tries to set their prices higher because of higher wages, they lose customers. And the reality is, labor isn't the biggest cost anyway, there are other costs that are bigger. The price of products is the biggest cost.

That's why Costco can pay their workers double plus far better benefits what Sam's Club does, but their prices are quite competitive.

Why don't you explain that? One company can pay double, but it doesn't result in higher prices to the consumer?

Go ahead, Joe.

[Libertas]

I wanna hear this answer too.

[JoeMemphis]

Really? Then why do I still get free delivery from Amazon?

Glenn gets fuel surcharges, because he is paid by the mile (which I wouldn't work for). If his fuel costs him more than he gets per mile for the load, then he simply parks his truck, because as much as you owners would like it, Glenn's not going to work for free. So, they have to increase their pay to him if they want him to continue to work.

Supply and demand is real. You guys just want to pretend it's not, so that you can pretend that labor costs will raise prices. I mean, when CEO wages double every year, do you say THAT is inflationary? Of course not.

Prices are set based upon supply and demand. Period. If the unionized grocer tries to set their prices higher because of higher wages, they lose customers. And the reality is, labor isn't the biggest cost anyway, there are other costs that are bigger. The price of products is the biggest cost.

That's why Costco can pay their workers double plus far better benefits what Sam's Club does, but their prices are quite competitive.

Why don't you explain that? One company can pay double, but it doesn't result in higher prices to the consumer?

Go ahead, Joe.

I already explained it to you. Individual companies do not set their prices on the supply and demand curve. Your Costco versus Sam’s comparison demonstrates that. How a company sets its prices is a strategy and it varies depending on industry and product. Businesses will try to maintain or improve their margins. If there is an overall increase in labor or materials, businesses will try to pass those increases along to their customers.

[gounion]

I already explained it to you. Individual companies do not set their prices on the supply and demand curve. Your Costco versus Sam’s comparison demonstrates that. How a company sets its prices is a strategy and it varies depending on industry and product. Businesses will try to maintain or improve their margins. If there is an overall increase in labor or materials, businesses will try to pass those increases along to their customers.

They will TRY. Key word try. They can’t raise their prices just because their costs go up if their competitors don’t. Thank you for admitting that rises is wages don’t necessarily mean prices go up. But in the case of oil companies, they collide and everyone raises their prices.

[JoeMemphis]

They will TRY. Key word try. They can’t raise their prices just because their costs go up if their competitors don’t. Thank you for admitting that rises is wages don’t necessarily mean prices go up. But in the case of oil companies, they collide and everyone raises their prices.

As I stated earlier, the ability to pass along price jncreases varies by company and market. It isn’t that simple. Not every 8oz bar of soap is the same price. Not every box of cereal is the same price. Depending on what you sell, your ability to increase price will depend on the perception of the consumer. If there is a general increase in the cost of labor or a general increase in the cost of fuel or materials, consumers expect to pay more and it’s easier to pass along those price increases. Fuel is a prime example. If you have strong brand loyalty, you generally will find it easier to maintain your margins. It’s not all based on some theoretical homogenous supply curve. It just doesn’t work that way.

[gounion]

As I stated earlier, the ability to pass along price jncreases varies by company and market. It isn’t that simple. Not every 8oz bar of soap is the same price. Not every box of cereal is the same price. Depending on what you sell, your ability to increase price will depend on the perception of the consumer. If there is a general increase in the cost of labor or a general increase in the cost of fuel or materials, consumers expect to pay more and it’s easier to pass along those price increases. Fuel is a prime example. If you have strong brand loyalty, you generally will find it easier to maintain your margins. It’s not all based on some theoretical homogenous supply curve. It just doesn’t work that way.

The way it doesn’t work is what you’re trying to sell. No one cares about what brand of gas they use. That’s why I used Gas Buddy the other day to get gases for $3.99 instead of $4.29.

But the oil companies aren’t passing along rising costs. It takes two months to get gas from the ground to the pump. They are gouging. But there’s nothing they can do that you won’t defend.

[JoeMemphis]

The way it doesn’t work is what you’re trying to sell. No one cares about what brand of gas they use. That’s why I used Gas Buddy the other day to get gases for $3.99 instead of $4.29.

But the oil companies aren’t passing along rising costs. It takes two months to get gas from the ground to the pump. They are gouging. But there’s nothing they can do that you won’t defend.

I was speaking generally. You mentioned Costco versus Sam’s. If you suspect collusion amongst the oil companies then that is something you would have to prove in court. They are regulated industries and I imagine their pricing is scrutinized by a number of agencies as well as Congress. I’m not defending them. I’m just not buying unsupported allegations either.

[gounion]

I was speaking generally. You mentioned Costco versus Sam’s. If you suspect collusion amongst the oil companies then that is something you would have to prove in court. They are regulated industries and I imagine their pricing is scrutinized by a number of agencies as well as Congress. I’m not defending them. I’m just not buying unsupported allegations either.

Untrue. Their prices aren’t regulated. Of course, you’re not honest enough to admit that their costs for the gas they are selling now hasn’t risen two bucks over the last two weeks. And BTW, the President has pointed out their gouging already.

A d yes, you ARE defending them. So how high can the prices go before you admit they’re gouging? Another question you won’t answer.

[gounion]

[gounion]

I was speaking generally. You mentioned Costco versus Sam’s. If you suspect collusion amongst the oil companies then that is something you would have to prove in court. They are regulated industries and I imagine their pricing is scrutinized by a number of agencies as well as Congress. I’m not defending them. I’m just not buying unsupported allegations either.

It's hilarious to re-read this! I thought Joe was an educated adult, and is a professional in the business world.

His third sentence is the funniest. No collusion in oil? I guess he never heard of the oil cartel OPEC, which was formed with the 60's with the express goal of fixing oil prices. Is he pretending not to know this, and hoping he can fool us, or is he just that stupid?

Then he tries to tell us that oil prices are regulated by the federal government!

Those of us who, unlike Joe, remember the history, knows that in 1980-88 there was a windfall profits tax on the oil companies, in a situation just like this, where OPEC had driven the prices up, and the cost of oil out of the ground in the USA hadn't risen, and the oil companies were gouging the American people.

Futures buyers and speculators are driving the price of oil up because of the war, and the oil companies are shoving it all into their pockets. They don't care about the country, the consumer, the Ukraine, or the world.

They are crooks gouging the American people, and Joe and Green Grass are their apologists.

[JoeMemphis]

It's hilarious to re-read this! I thought Joe was an educated adult, and is a professional in the business world.

His third sentence is the funniest. No collusion in oil? I guess he never heard of the oil cartel OPEC, which was formed with the 60's with the express goal of fixing oil prices. Is he pretending not to know this, and hoping he can fool us, or is he just that stupid?

Then he tries to tell us that oil prices are regulated by the federal government!

Those of us who, unlike Joe, remember the history, knows that in 1980-88 there was a windfall profits tax on the oil companies, in a situation just like this, where OPEC had driven the prices up, and the cost of oil out of the ground in the USA hadn't risen, and the oil companies were gouging the American people.

Futures buyers and speculators are driving the price of oil up because of the war, and the oil companies are shoving it all into their pockets. They don't care about the country, the consumer, the Ukraine, or the world.

They are crooks gouging the American people, and Joe and Green Grass are their apologists.

I don’t disagree that we are too dependent on OPEC. One way to put downward pressure on their prices is to produce more oil ourselves.

As far as regulated industries I was referring to the oil and gas companies that operate in the USA. I can’t remember buying unleaded from OPEC.

[Number6]

In your auto example, the supply of chips is down while the demand for autos has not changed. So dealers are able too sell their cars at sticker or above. However, there is a limit to which you can raise prices in the marketplace depending on the elasticity of demand. If you raise auto prices too high, it will affect the demand for autos as people will be priced out of the market. The demand for epipens is not elastic. However, overtime other competitors have entered the epipen market and have driven the price down.

My point is that supply and demand is macro economic theory that explains how the market works over time. Individual companies don’t set pricing on the supply and demand curve. There are numerous other factors that affect that decision. I can tell you for a fact that a general increase in the cost of labor or materials will generally result in increases in prices as companies will seek to maintain their margins. If you don’t believe that, ask Glenn about fuel surcharges. Trucking companies don’t just eat the increase in fuel costs, they pass it along to the consumer.

The oil companies don't set the price at the pump and that can vary depending upon local conditions such as how much the gas station has to pay for leasing the land they're on, how much they pay in property taxes, wages, etc.... The thing oil companies do control is the amount of gas they produce and they can affect the wholesale price by "tweaking" production. I agree that oil companies cost increase due to oil producers price increases, transportation costs, salaries/wages, etc.. but much of this is covered by a small ( a few cents increase) increase in the wholesale price.

[Number6]

There are a number of person's who complain about the rising price of gas but how have they changed their driving habits to save gas? I remember the long gas lines in the early 70s because OPEC reduced production which caused a gas shortage in the U.S.. Back then, speed limits were changed to 55 MPH and we were encouraged to consolidate and/or reduce our trips to conserve gas. Is anyone advocating or doing that today? How many people with gas guzzling pickup trucks/SUVs are still driving above the speed limit?

Back in the 70s, I reduced my speed to 55 on the highways and after the oil embargo ended I went back up to the posted speed limit which was 65 - 75 MPH. For the past 20 years, I've kept my speed between 55 and 60 MPH, consolidated/reduced the number of trips I make and now I fill up my car about ever 25 - 28 days. Even when I've driven to Las Vegas, which I did last January, I kept to my speed between 55 and 60 MPH and I can make the 350 mile drive on between half and 3/4 of a tank. I'll be returning to Las Vegas in May and August for bowling tournaments and I have no doubt I'll get the same mileage.

So, what are you, especially those complaining about high gas prices, doing to conserve gas?

[JoeMemphis]

There are a number of person's who complain about the rising price of gas but how have they changed their driving habits to save gas? I remember the long gas lines in the early 70s because OPEC reduced production which caused a gas shortage in the U.S.. Back then, speed limits were changed to 55 MPH and we were encouraged to consolidate and/or reduce our trips to conserve gas. Is anyone advocating or doing that today? How many people with gas guzzling pickup trucks/SUVs are still driving above the speed limit?

Back in the 70s, I reduced my speed to 55 on the highways and after the oil embargo ended I went back up to the posted speed limit which was 65 - 75 MPH. For the past 20 years, I've kept my speed between 55 and 60 MPH, consolidated/reduced the number of trips I make and now I fill up my car about ever 25 - 28 days. Even when I've driven to Las Vegas, which I did last January, I kept to my speed between 55 and 60 MPH and I can make the 350 mile drive on between half and 3/4 of a tank. I'll be returning to Las Vegas in May and August for bowling tournaments and I have no doubt I'll get the same mileage.

So, what are you, especially those complaining about high gas prices, doing to conserve gas?

I work remote so I don’t drive that much and when I do it’s city driving. If I drive on the interstate, I go with the flow which is mostly 65 to 75 miles per hour. Our vehicles are a whole lot more energy efficient than they were in the 70’s and 80’s. Even the trucks are more efficient. I suppose I could get better mileage in a Mini Cooper but I’m not going to pay to drive a Mini Cooper. I’m all for building better more efficient cars. I’m fine with electric vehicles but I think it will take time to build out the infrastructure and to transition to such a fleet. In the meantime, we have the capacity to produce as much or more energy than we consume. It only makes sense to do so and to minimize our dependence as a nation and the dependence of our allies in the free world on oil and gas produced by people who would use that as a weapon.

JMO

[gounion]

I don’t disagree that we are too dependent on OPEC. One way to put downward pressure on their prices is to produce more oil ourselves.

We don't have enough oil to do that, even if we drilled every possible well.

And are you so damned short-sighted that you think it would be a good idea to drill as much oil as possible and deplete our oil reserves as quickly as possible?

As far as regulated industries I was referring to the oil and gas companies that operate in the USA. I can’t remember buying unleaded from OPEC.

Oil prices aren't regulated in the United States. Are you REALLY that stupid that you think they are?

Conservatives are a special kind of stupid.

[JoeMemphis]

We don't have enough oil to do that, even if we drilled every possible well.

And are you so damned short-sighted that you think it would be a good idea to drill as much oil as possible and deplete our oil reserves as quickly as possible?

Oil prices aren't regulated in the United States. Are you REALLY that stupid that you think they are?

Conservatives are a special kind of stupid.

Are you suggesting that oil and gas production in the US isn’t regulated. That’s a new one. Are you suggesting that members of Congress don’t pay attention to the price at the pump? You can call a hearing these days on just about anything if you control the house or senate. You can supeona witnesses. You can refer cases to the DOJ. So it isn’t the Wild West. Folks do pay attention. States also have laws against price gouging.

[gounion]

I work remote so I don’t drive that much and when I do it’s city driving. If I drive on the interstate, I go with the flow which is mostly 65 to 75 miles per hour. Our vehicles are a whole lot more energy efficient than they were in the 70’s and 80’s. Even the trucks are more efficient. I suppose I could get better mileage in a Mini Cooper but I’m not going to pay to drive a Mini Cooper. I’m all for building better more efficient cars. I’m fine with electric vehicles but I think it will take time to build out the infrastructure and to transition to such a fleet. In the meantime, we have the capacity to produce as much or more energy than we consume. It only makes sense to do so and to minimize our dependence as a nation and the dependence of our allies in the free world on oil and gas produced by people who would use that as a weapon.

JMO

It's too bad that the people you vote for are against the idea of developing alternative energy sources than oil.

We have a finite amount of oil available in the world. We don't know how much is really available, it could be a lot, or we could be using the last of it up. Be we need oil for medicines and many things besides just burning it up in gas tanks. Wouldn't it be smart to save it for these other things and use renewable energy instead?

Oh, hell. I keep trying to talk sense to a conservative. That's like teaching a pig to sing.

[gounion]

Are you suggesting that oil and gas production in the US isn’t regulated. That’s a new one. Are you suggesting that members of Congress don’t pay attention to the price at the pump? You can call a hearing these days on just about anything if you control the house or senate. You can supeona witnesses. You can refer cases to the DOJ. So it isn’t the Wild West. Folks do pay attention. States also have laws against price gouging.

Prices are not regulated, and you show your ignorance to suggest they are. Oh, they pay attention. For instance, the GOP has been hounding Biden to stop buying oil from Russia, and now that he has done as they demanded, they are attacking him for the rise in gas prices this will cost.

And the Congress has went after oil companies in the past, with a windfall profits tax from 1980-88. Something you don't know about as you are proudly also ignorant of history.

But go ahead, defend the oil companies. After all:

[Libertas]

Prices are not regulated, and you show your ignorance to suggest they are. Oh, they pay attention. For instance, the GOP has been hounding Biden to stop buying oil from Russia, and now that he has done as they demanded, they are attacking him for the rise in gas prices this will cost.

And the Congress has went after oil companies in the past, with a windfall profits tax from 1980-88. Something you don't know about as you are proudly also ignorant of history.

But go ahead, defend the oil companies. After all:

Your con pal here admires a corp which is able to overcharge people.

[Bludogdem]

Basic fundamental of the oil market is that it is a futures market.

You see price increases at the pump today because the cost of that next supply of gas delivered is going to be more expensive and the filling station owner operator will need more money to pay for it.

And that ripples through refinery costs. The next tanker of oil is going to cost more. Price increases are more immediate because you need more money for the next batch.

Production costs increase because of the cost of bringing extraction rigs out of mothballs. Those rigs were mothballed because they cost the most to operate and often cost more to produce than the price on the market. Also, labor cost and equipment costs have increased on oil production just like everything else.

There are many independent oil production companies and many independent refineries. Those refineries are buying on the open market so the much higher input commodity cost will drive up prices thru the production network. Need to raise prices immediately to meet future price increases.

Major producers like Exxon, BP, Chevron, refine more oil than they produce so they are also impacted by open market oil costs.

They aren’t gouging. They just want to keep those net profit margins in the 5%-10% range.

[Libertas]

[gounion]

Basic fundamental of the oil market is that it is a futures market.

You see price increases at the pump today because the cost of that next supply of gas delivered is going to be more expensive and the filling station owner operator will need more money to pay for it.

And that ripples through refinery costs. The next tanker of oil is going to cost more. Price increases are more immediate because you need more money for the next batch.

Production costs increase because of the cost of bringing extraction rigs out of mothballs. Those rigs were mothballed because they cost the most to operate and often cost more to produce than the price on the market. Also, labor cost and equipment costs have increased on oil production just like everything else.

There are many independent oil production companies and many independent refineries. Those refineries are buying on the open market so the much higher input commodity cost will drive up prices thru the production network. Need to raise prices immediately to meet future price increases.

Major producers like Exxon, BP, Chevron, refine more oil than they produce so they are also impacted by open market oil costs.

They aren’t gouging. They just want to keep those net profit margins in the 5%-10% range.

The oil companies aren’t buying futures. They sell oil, they don’t buy it. Dumbass.

Again, this is nothing but gouging. It’s not new, they’ve done it every time some world event drives up the cost of oil. We’re getting fucked, and you defend the indefensible, Green Grass.

[Libertas]

The oil companies aren’t buying futures. They sell oil, they don’t buy it. Dumbass.

Again, this is nothing but gouging. It’s not new, they’ve done it every time some world event drives up the cost of oil. We’re getting fucked, and you defend the indefensible, Green Grass.

The CEO's go on CNBC and admit they are gouging, but brainwashed/braindead cons still wont see it, they worship these criminals because they too want to gouge people.