Get those V8 pickups while you can.

[il Padrino Ute]

Prices aren't set by station owners like your friend. Chevron and Shell (and the rest) set those prices, and local owners aren't allowed to add or subtract a penny without breaching (and losing) their contract. The gougers are the big corporations.

Perhaps you ought to talk to my friend about that, as he sets the prices for his station. His only requirement is that because he sells Phillips 66 gas, he has to have the Phillips 66 logo everywhere.

[il Padrino Ute]

Someone will figure out a way to give vehicles the same power with better gas mileage and get rich doing it. Increased mileage will only come with higher gas prices or a mandate from the government. They could easily put a $3.00 tax on gasoline and solve this thing within two years. They won't do it that way because they don't want to have to deal with voters. By putting the responsibility on the automakers, they shift the blame.

The thing that bothers me most about the taxes on gasoline is that the government does nothing to earn the money. What the feds take in by way of taxes dwarfs the profits of the oil companies, but people like to blame the oil companies for the high cost of fuel.

[RobinFinderson]

IPU, you should watch this Sixty Minutes piece about oil prices.

[il Padrino Ute]

IPU, you should watch this Sixty Minutes piece about oil prices.

And you should have a chat with my friend.

[il Padrino Ute]

IPU, you should watch this Sixty Minutes piece about oil prices.

I saw that when it first aired. It was good to watch it again, though it was talking about speculation pushing the price of oil up, not who decides how much gas stations will charge for gas.

[RobinFinderson]

I saw that when it first aired. It was good to watch it again, though it was talking about speculation pushing the price of oil up, not who decides how much gas stations will charge for gas.

Yes, I realize it doesn't talk about who decideds how much gas stations charge. I had recalled something I watched in the last year that featured gas station owners complaining about how rigidly fixed the cost of gasoline is by the manufacturers. Those owners talked about how their pump prices were tied in to a computer that reported directly to the manufacturer (in your friend's case, Phillips 66) to make sure that prices were consistent.

As for the 60 Minutes piece, it does a good job talking about the market environment in which price is ultimately determined. It was a good review, and a reminder that something as simple as 'price fixing' doesn't explain the whole situation. What the piece describes is a chaotic and unsupervised market in which price manipulation could occur and in which it has occurred in the past.

[venkman]

You didn't really expect the new king to give back the powers King Bush took, did you?

No, I didn't. Obama has taken the executive power to a whole new level. They just keep building off of each other.

[venkman]

Someone will figure out a way to give vehicles the same power with better gas mileage and get rich doing it. Increased mileage will only come with higher gas prices or a mandate from the government. They could easily put a $3.00 tax on gasoline and solve this thing within two years. They won't do it that way because they don't want to have to deal with voters. By putting the responsibility on the automakers, they shift the blame.

Incredibly high mileage vehicles are a ways off and likely very expensive. The way automakers will achieve the new standards is through smaller engines and lighter, less safe vehicles. CAFE costs lives.

[TripletDaddy]

Prices aren't set by station owners like your friend. Chevron and Shell (and the rest) set those prices, and local owners aren't allowed to add or subtract a penny without breaching (and losing) their contract. The gougers are the big corporations.

lol. who told you this?

[RobinFinderson]

Incredibly high mileage vehicles are a ways off and likely very expensive. The way automakers will achieve the new standards is through smaller engines and lighter, less safe vehicles. CAFE costs lives.

Is safety really a concern to you? Or are you just using safety as a convenient justification to support the continued accommodation of your lifestyle preferences? Because the roads could be made instantly safer by many degrees by simply decreasing the speed limit to 35 mph, everywhere.

[RobinFinderson]

lol. who told you this?

Good question. I saw a piece on this some time in the last 12 months. It may have been 60 Minutes, or something else, but it was all about how gas station owners operate on thin margins, and how their parent corporations determine their pricing, which doesn't give them the wiggle room they need to compete. I have done a quick look for this piece, but haven't been able to find it, which admittedly makes my contention difficult to defend.

[happyone]

If I remember my econ 301 right, the main problem with energy prices in general and gasoline in particular is that they have a very steep demand curve. Basicly the producers can charge any price they want and it doesn't effect demand much. That is until a certain price is reached. When I was in school that price was about $2 a gal (It was a loooong time ago) It seems that in todays market it is about $4.50 - $5/gal.

As long as that is true we will have high energy price.

I remember last year some "experts" and Saudi royals were talking that the demand for crude justified about a $70/bbl price and the speculators where the ones pushing it up to $150/bbl. Obvisouly demand has fallen sharply since then.

Question, how closely does the cost of crude predict the cost of gasoline? I know this like seasonal demand and shutting down for maintenance can effect the price. It seems lately that crude has been fairly stable, but the cost at the pump has been rising again.

[TripletDaddy]

Good question. I saw a piece on this some time in the last 12 months. It may have been 60 Minutes, or something else, but it was all about how gas station owners operate on thin margins, and how their parent corporations determine their pricing, which doesn't give them the wiggle room they need to compete. I have done a quick look for this piece, but haven't been able to find it, which admittedly makes my contention difficult to defend.

Gas stations are not subs of ChevronTexaco or any other big oil company. Therefore, the Big Oil companies are not parents. You are correct, though....they operate on razor thin margins.

Without going into too much detail, gas corporations do not set prices at the pump, at least not in the manner in which you describe.

A few simple examples of this:

1. On your way to work, check out the prices at every Chevron you pass. They are not identical, but vary. The best place to purchase gas is almost always at what is referred to as a "clover," or 4 gas stations on hard corners opposite each other. Pricing is usually most competitive at clovers.
2. Every so often, there is some gas station owner that does a promo with a radio station....come on down and fill up for 99 cents a gallon...that sort of thing.
3. Costco sells gas at a different price than downstream pumps. It purchases gas from the local wholesaler.

If what you are saying is true, that would mean that ChevronTexaco has a master grid of every gasoline source in the country, with the corresponding price at which said station is allowed to sell its gasoline. I can tell you this much, at least about Chevtex.....they have no such grid or practice.

[venkman]

Is safety really a concern to you? Or are you just using safety as a convenient justification to support the continued accommodation of your lifestyle preferences? Because the roads could be made instantly safer by many degrees by simply decreasing the speed limit to 35 mph, everywhere.

I'm not one of those safety trumps all people (your 35 mph analogy reminds me of a Walter Williams column). Reducing CO2 emissions to combat a non-existent, manufactured crisis is not a compelling reason to mandate more expensive, less safe cars.

[cougjunkie]

The technology to make V8s that get 30+ miles to the gallon is out there, the problem is the oil companies are paying big money to keep it under wraps.