OT: But Pertinent- BEST explanation of gas prices yet

Drumstyx7a

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Okay,

So I'm putting my old dirty sweat stained gasoline cap from the 50's back on again.

As some of you may remember in a previous life I was in the gasoline wholesale business. Grew up in it. Family had it from 1925 till about 1990 when I sold out my side to my uncle.

This story from yahoo news has THE BEST and most factual and real world information about how gasoline prices are determined. From the pipeline all the way to the pump where you pick up the nozzle.


There are NO MYTHS here. Forum member komodobob is still in the business and I'm sure that he will back up all the facts as they are presented as the real thing.

Hopefully, this will help those who have often wondered or speculated in thought about gasoline pricing.

Again, this is the way it really works gang. With an homage to an old Humble (now Exxon catch phrase ...) Happy Reading !!! * *(Happy Motoring!)



Robb

http://news.yahoo.com/s/ap/us_pricing_gas
 

DrumminLefty

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Excellent article. I've been watching this since the "oil crisis" of '74. Wait until oil goes above $150 a barrel.
 

Drumstyx7a

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I've tried more than a few times to "s'plain it all" but it's difficult at best because I there are nuances involved in all the different aspects and I tend to want to try to tell it all.


This article puts it all out there and covers all the major bases. I figure that it there are any "detail" questions I can address those.

And this is a good article because it's well researched, uses a good example and it's not written by someone from an oil company ..... And it explains the accounting method that is used most commonly in the industry, LIFO (last in first out).


Robb
 

curotto

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Yep, 4.29 a gallon here in sunny San Carlos, CA....we are soooo special out here in the SF Bay Area.
Still not going to keep me from my appointed rounds though....


Mike Curotto
 

Drumstyx7a

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Mike,

One thing that the article didn't really go into detail a lot is that the street price can also be affected by state and federal and even some local taxes. There's a lot of tax in New York and I'm sure that there's a similar thing in California. Gotta pay the state workers to check out the Stage II Emission Controls out there!!

Over all of the CONUS though there really isn't a lot of difference in the rack price from NY to CA.

Robb
 

Tenatious P

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Yep, 4.29 a gallon here in sunny San Carlos, CA....we are soooo special out here in the SF Bay Area.
Still not going to keep me from my appointed rounds though....


Mike Curotto
Always get me laughing (on the inside) when I read of gas prices in the US. I have no idea whether $4.29 is high or not over there, however, bear this one in mind.

A gallon of gas here (regular unleaded, not performance stuff) at the place nearest to my home, in USD is $9.86 a gallon. Yep - more than double.

Can I come over there? I'd gladly pay half what I do now to keep my car on the road.....
 

Chunchunchun

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Yep, 4.29 a gallon here in sunny San Carlos, CA....we are soooo special out here in the SF Bay Area.
Still not going to keep me from my appointed rounds though....


Mike Curotto
Always get me laughing (on the inside) when I read of gas prices in the US. I have no idea whether $4.29 is high or not over there, however, bear this one in mind.

A gallon of gas here (regular unleaded, not performance stuff) at the place nearest to my home, in USD is $9.86 a gallon. Yep - more than double.

Can I come over there? I'd gladly pay half what I do now to keep my car on the road.....
Hear hear! It's the same with drum gear prices - my snare costs more POUNDS here than it does dollars in the US. Something like £430 and $410. Quite frankly ridiculous. You guys over the pond don't know how good you've got it!
 

Rich K.

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Yep, 4.29 a gallon here in sunny San Carlos, CA....we are soooo special out here in the SF Bay Area.
Still not going to keep me from my appointed rounds though....


Mike Curotto
Always get me laughing (on the inside) when I read of gas prices in the US. I have no idea whether $4.29 is high or not over there, however, bear this one in mind.

A gallon of gas here (regular unleaded, not performance stuff) at the place nearest to my home, in USD is $9.86 a gallon. Yep - more than double.

Can I come over there? I'd gladly pay half what I do now to keep my car on the road.....
Hear hear! It's the same with drum gear prices - my snare costs more POUNDS here than it does dollars in the US. Something like £430 and $410. Quite frankly ridiculous. You guys over the pond don't know how good you've got it!
yes, drums and gas are cheap. But other things you have are unobtainable for many US citizens...things more important than cars or drums.

Frankly, I think it's time we nationalized the oil industry in the US.
 

eddiej

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Yep, 4.29 a gallon here in sunny San Carlos, CA....we are soooo special out here in the SF Bay Area.
Still not going to keep me from my appointed rounds though....


Mike Curotto
Always get me laughing (on the inside) when I read of gas prices in the US. I have no idea whether $4.29 is high or not over there, however, bear this one in mind.

A gallon of gas here (regular unleaded, not performance stuff) at the place nearest to my home, in USD is $9.86 a gallon. Yep - more than double.

Can I come over there? I'd gladly pay half what I do now to keep my car on the road.....
Hear hear! It's the same with drum gear prices - my snare costs more POUNDS here than it does dollars in the US. Something like £430 and $410. Quite frankly ridiculous. You guys over the pond don't know how good you've got it!
yes, drums and gas are cheap. But other things you have are unobtainable for many US citizens...things more important than cars or drums.

Frankly, I think it's time we nationalized the oil industry in the US.
My local newspaper ran this article this morning. Very well written.

As far as nationalizing the oil industry in the US, I would love to see it happen. People gripe about how the government does things. Quite frankly, the insane prices we are paying for gas & oil are TOTALLY driven by the private sector. Unfortunately, the oil business has a lot more influence over the government then most people do, so I doubt it will happen.

TenatiousP your gas prices are higher then ours simply because of high taxation on gasoline. Of course, your cars a a lot more fuel efficient then ours are.
 

Concrete Pete

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Hey Crew,

I guess I'm not doing too bad here at $3.74 a gallon for 87 octane.

Here's a really dumb question-- since the PUC (Public Utilities Commission) regulates natural gas, propane, electricity, etc., etc., WHY can't they also regulate GASOLINE, too? Hey, I consider it a "utility"!

Also, what the hell ever happened to the Energy Commission (formed to control gasoline prices) a few presidents ago? What are they doing? Sitting on their asses taking huge bribes from the oil barons?



Cheers,
C. P.
 

DanC

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Gas here on the Florida Gulf is around $3.59 today. In NJ it's usually around .10 cheaper: NJ has the lowest state tax on gas in the country.

You guys who think the government should take over the gasoline business are just plain nuts. Everyone complains about how everything the government runs is so screwed up, and yet you want to put an essential industry in their hands as well? Not only that, but the oil-producing countries aren't going to sell their crude to the government at a lower price. The market determines the price, not our government.

If you want rationing, and eventually an even higher price due to the stupidity, waste, and inefficiency our government is known for - be my guest.

But I'll take the free market and capitalist systems any day, thanks....




.
 

BennyK

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True fact : After we helped the Israelis during the Yom Kippur war , King Faisel , announced that he was drawing the sword of oil. Its turned out to be more than a hollow threat.
We haven't the brains, nor the will to resist. True fact.
 

Chunchunchun

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Yep, 4.29 a gallon here in sunny San Carlos, CA....we are soooo special out here in the SF Bay Area.
Still not going to keep me from my appointed rounds though....


Mike Curotto
Always get me laughing (on the inside) when I read of gas prices in the US. I have no idea whether $4.29 is high or not over there, however, bear this one in mind.

A gallon of gas here (regular unleaded, not performance stuff) at the place nearest to my home, in USD is $9.86 a gallon. Yep - more than double.

Can I come over there? I'd gladly pay half what I do now to keep my car on the road.....
Hear hear! It's the same with drum gear prices - my snare costs more POUNDS here than it does dollars in the US. Something like £430 and $410. Quite frankly ridiculous. You guys over the pond don't know how good you've got it!
yes, drums and gas are cheap. But other things you have are unobtainable for many US citizens...things more important than cars or drums.

Frankly, I think it's time we nationalized the oil industry in the US.
I'm young and politically ignorant, so I'll gripe for now while the important stuff goes over my head ;)
 

BennyK

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And the Saudis move to take up the slack, as they have many times in the past:


market info
Thanks for that Dan. My concern is how to weaken that dependence.
The Tar Sands debate is raging up here in Canada, with talk of labelling the product- source at the pumps. Everything else has to be designated " made in " , why not gasoline too ?
 

Dave HCV

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And the Saudis move to take up the slack, as they have many times in the past:


market info
Thanks for that Dan. My concern is how to weaken that dependence.
The Tar Sands debate is raging up here in Canada, with talk of labelling the product- source at the pumps. Everything else has to be designated " made in " , why not gasoline too ?
The answer to your question about "made in" labeling is in the article linked to by Drumstyx7a at the top of this thread. In summary, the gasoline that you pump into your car at the local station may be a mix of gasoline refined at a number of locations and the crude used to refine that gasoline may have come from a number of locales.
 

Drumstyx7a

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Right on Dave .... Living in Houston you see terminals and refineries all over the place. The mixing referred to in the article is called "exchange" in the industry. Say Dave in Houston is Exxon/Mobil and me in East Texas is Conoco/Phillips (which coincidentally are the two of the companies I used to buy from). Dave has surplus product in Houston that he wants to sell and I need product in my Houston refinery. But also I've got surplus product in a refinery up here and Dave is short for the month on his contract up here. So, we do a deal some product for product and some cash trade hands and now Dave has what he needs up here and I have what I need down there and nothing has moved along the pipeline or is delayed by transfer. It works for refined crude and finished gasoline. Where he "got" his product is also subject to exchange same as me.


In Europe the liter has been the standard of measure for gasoline for decades. As has the gallon for us. Driving habits and consumption of gasoline and diesel is so totally different in Europe versus here that while it's kinda fun to note what a gallon would cost over there is really irrelevant when it comes to the end use of the product.

The FEC or Federal Energy Commission was formed to promulgate and enforce pricing controls during a time when that action was necessary. It now exists as the Federal Energy Regulatory Commission and only deals with oil pipeline transportation. There is no gasoline regulation authority similar to what there was in the 70's.

Nationalizing the industry wouldn't change the way the product is purchased, transported, refined or how it is priced and distributed. If anything the cost of the government for actually overseeing the program would add to the bureaucracy and be a budget item which would require tax money that more than likely would be collected at the pump/dispenser* thus increasing the cost to the end user. *(there is really no such thing as a gas pump anymore ... the pumps are now submerged and mounted on top of the underground tank and the "thing" at the island is merely a dispenser which meters the product into your tank. )

The Saudis have been working with the US for decades ... as far back as Charlie Wilson's war in Afghanistan. It's to our mutual benefit to keep things good between us.
I'm young and politically ignorant, so I'll gripe for now while the important stuff goes over my head
Naw Chun ... you aren't politically ignorant ... just young .... with age comes maturity and understanding! Note I didn't add wisdom :rolleyes:

Benny your comment was true in the early 70's but in the new age, the UAE just rattles it's saber every once in a while. They have seen how North America can change it's habits when it wants to ... and change them enough to make an impact on world demand.

Robb
 

Tenatious P

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In Europe the liter has been the standard of measure for gasoline for decades. As has the gallon for us. Driving habits and consumption of gasoline and diesel is so totally different in Europe versus here that while it's kinda fun to note what a gallon would cost over there is really irrelevant when it comes to the end use of the product.
Absolutely disagree that it's irrelevant.

I drive thirty miles each way to work five days a week, and to rehearsals / gigs / whatever on top of that. The wife does the school run twice a day, on top of her work run and whatever else it is that women drive to during the day.

If I did that in Houston, it'd cost me around four dollars a gallon. Why is the fact that it costs me nearly ten dollars a gallon here to do the same mileage 'irrelevant'?
 

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