TurbosAmongUs

I dunno what it could be but my hot shotting business is taking a HUGE hit at $2.00/gallon ...i hope the Prez does something about it, or at least sees us little guys down here waving the white flag

phox_mulder

This is how I believe it happens:

Price of fuel is based on conjecture.

Yes, the 1,000 gallons the station has sitting in the underground tank was bought for X amount of dollars.
Station has to sell it at at least X price to make that money back.

They have to guess what they will have to pay for the next 1,000 gallons they have delivered,
so they raise the price of what they are currently selling to make sure they have X+ amount in reserve to pay for the next shipment.

Say the next shipment is a little less than they guessed it would be,
do they then lower the price to break even again?
No, they figure they'll have to pay more for the next shipment, so they leave it the same, and pocket a little profit for once.

I've had station owners tell me they sell fuel at cost or less, making no money,
and rely on the snacks, drinks, car washes, oil, washer fluid, etc to make a profit.

I'm guessing the refineries work on the same principle.
They have to guess how much that next barrel is going to cost, so they adjust the cost of the current reserve accordingly.


phox

PapaPerk

Two Words ....... George Bush.

Sidewinder

I find it hard to believe that they would sell something and not make any money on it. I have a friend that works at a car dealer and he swears that they don't make any money on new cars only on the parts and service. I personally don't buy it!

Mexstan

Huh????????? This was happening way before Mr. Bush became president. In what way do you figure he is responsible? Please explain in detail.

12valve@heart

Someone (definitely not yours truly) apparently thinks that since President Bush used to be in the oil business, he controls the fuel prices. Somehow I seriously doubt that.

I have been told that the increased production of home heating oil for the northern states affects the price of diesel. I can also see where a hurricane may increase demand to a certain extent but what we're seeing currently is ridiculous.

Texas Pride

Im gunna have to support my fellow texan an say that that statement is BS. How in the world could it be possible for george bush to control the fuel prices? Bein in the oil buisness does not have anything to do with him "controling fuel prices" like my other fellow texan has said Do you thank that if kerry was president that fuel prices would drop???

Floorman

im a salesman at a chrysler/ jeep dealership there is money in new cars but not as much as people think there is.

graphitecumnz

Crude prices rose because of Hurricane Ivan disrupting oil production in the Gulf of Mexico... they continued to rise with the increased terrorist activity in Iraq... OPEC is making a killing off of Western dependancy.

Ask the Euro's how much fuel costs...

I helped build a house for a fella who owns fuel stations and he had related the info that he makes most of his profit from the sale of drinks and snacks as opposed to gouging fuel prices...

John Kerry supported a $.50 fuel tax(which was thankfully defeated in Congress) so don't go blaming Bush for fuel prices...

Mexstan

[QUOTE]Originally posted by graphitecumnz
[B]Crude prices rose because of Hurricane Ivan disrupting oil production in the Gulf of Mexico...]

That is my point. Explain why. I can understand up to a point why the price would go up when the price of crude increases, but for the price to increase just because of a hurricane .....???

phox_mulder

It's the anticipation of the speculation.

Speculation that the hurricane may disrupt production causes the rise in price.
Whether or not that speculation pans out remains to be seen.

Like the prediction of a drought next year in wine country will cause the price of wine currently sitting on the shelf to rise.

They figure they might lose money next year, so lets offset it by making a little more this year.


phox

graphitecumnz

In the context of the Gulf of Mexico, those oil rigs were shut down in anticipation of Ivan. That took oil off the market. Oil production wasn't increased in other places to account for the decrease felt from Ivan. This creates a small shortage in crude to be refined. It's supply and demand economics. If there is a decreased supply and the same demand the base price goes up.

In the case of Iraq... like Phox said, when people anticpate a decreased supply( or a more costly supply) they pass that on to the consumer through a price increase.... so when they fear terrorist attacks on supply pipelines they anticipate that they will buy crude at a higher price than usual passing the increase on to you and everyone else on the board.

OPEC isn't the worlds supplier of oil... they are a body of oil producing nations that set the worlds price for crude oil. They can in effect determine the price of a barrel of oil by determining the output of oil from their group. There are plenty of non-OPEC countries out there that produce oil and supply countries such as the US and Mexico with raw crude... Canada and Russia for example...

kingofdodge7131

well, only cost 200 bucks in iowa to get caught running the undyed fuel. 1000 after your 3rd violation within 3 years of the first.

Might be worth it

xp8103

OK.... Back to my question above then: K1 v. No. 2D (the apparent designation of consumer grade diesel). You'd run it without a thought and Haulin' says it lacks the proper lubrication.

According to the Chevron website from the link above, JetA and K1 are similar enough to each other (with JetA probably having a more stringent set of regulations surrounding it's manufacture to ensure uniformity) and both are similar to No. 1D which is a lighter, less viscous grade of No. 2D. Chevon's FAQ states that No. 1D is actually blended with No. 2D in colder weather and can be run by itself. However:

"The lubricity of No. 1-D is likely to be slightly lower than that of No. 2-D because of its lower viscosity. Its lubricity is unlikely to be low enough to cause catastrophic failure. However, a steady diet of No. 1-D in equipment designed for No. 2-D may result in greater long term wear in the fuel delivery system."

So, lots of "coulds" and "mays" in there but it would seem that, were someone to mix, say 5 or 10 gallons of K1 (at some $.30 cheaper per gallon) now and then would do nothing but lower your fuel costs a little. Be careful tho and do the math. Since No. 1D is less dense, it will have less energy potential and thus decrease fuel economy. There has to be a break even point in there somewhere tho.

MikeyB

Don't forget that refineries in the storms path was also shutdown. And it takes a week or so to bring them backup online.
I saw some pics of offshore rigs that was damage by Ivan. Pretty bad, also some drilling platforms are missing.

MikeyB