# Gas prices up even as crude goes lower



## R y a n (Apr 4, 2005)

High demand and government rules mean they'll stay up

(CNN) -- Prices jumped nearly 11 cents over the past two weeks to $2.35 for a gallon of regular-grade gasoline, even though the price of crude oil dropped, a national survey said Sunday.

The hike obliterates the 9-cent drop that had begun January 20, said Trilby Lundberg, publisher of the Lundberg Survey.

"Those five weeks of declines were due largely to our being at the bottom of our gasoline-demand curve," she said.

The price rise came even as the cost of a barrel of crude fell from $62.91 on February 24 to $59.96 last Friday -- a 7-cent-per-gallon drop.

Lundberg said an expected increased demand for gasoline in the spring and new government gasoline formulation requirements conspired to drive up prices at the pump.

Prices are not likely to fall any time soon, she said.

"With our demand building and those new recipe requirements coming into effect, gas prices will most likely surge much higher," she predicted.

"Some of those regulations are seasonal in nature; they become more severe and more expensive as the weather gets warmer."

Prices in Newark, New Jersey, were the lowest, at $2.15 for a gallon of self-serve regular; they were highest in Honolulu, Hawaii, at $2.63 per gallon, she said.

The survey was carried out March 10. The previous survey was carried out February 24.

The following are some other cities' prices for a gallon of self-serve regular gasoline:

•Charleston, South Carolina: $2.19

•Salt Lake City, Utah: $2.25

•Dallas, Texas: $2.28

•Atlanta, Georgia: $2.29

•Philadelphia, Pennsylvania: $2.32

•Las Vegas, Nevada: $2.38

•Cleveland, Ohio: $2.39

•Los Angeles, California: $2.55
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Looks like the Oil Goliaths are starting a bit earlier this year at gouging the American consumer. They're doing a good job at "desensitizing" the American public into getting used to $2.00+/gallon gas.

What a national disgrace....

Ryan

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## DJRooster (Nov 4, 2002)

Oh, no that's not true. According to the oil industry we are getting a really good deal on the price of a gallon of gas. Exxon has record profits but they are not ripping off the consumers. Just ask them. It is all supply and demand the American way. Pull up to the pump and fill her up and be thankful you are getting such a good deal. Big oil would never rip you off. Where do you get such paranoia?


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## Bobm (Aug 26, 2003)

The federal govt makes more money on a gallon than the oil companies that explore, drill, transfer, refine,redistribute ect and the very ignorant among us blame " Evil Oil" (" big business" blah blah blah you pick it).

Unfortunately our public school system has produced absmally economically ignorant people that interpret record profit incorrectly.

Once again showing how they don't understand the difference between profit and profit margin. Or anything else about supply and demand or the lag in oil product pricing.

But never mind its easier to blame "Big oil" than to learn the facts. :eyeroll:


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## Militant_Tiger (Feb 23, 2004)

> The federal govt makes more money on a gallon than the oil companies that explore, drill, transfer, refine,redistribute ect and the very ignorant among us blame " Evil Oil" (" big business" blah blah blah you pick it).


The government IS big oil these days.

No matter how you slice it, the oil companies are making a killing.


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## Bobm (Aug 26, 2003)

> The government IS big oil *these days*.


Do a little research and let me know when tax revenue from gasoline started and what the ratio of net profit vs tax to the govt was historically for say the last 35 years.

Then you will really understand the issue.


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## DecoyDummy (May 25, 2005)

I'll just continue to fill up the tank and drive ... Life is way too short to sweat the small stuff

http://media.putfile.com/The-Yellow-Monster-Flamingo

_________________


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## racer66 (Oct 6, 2003)

Pulled this right from fact check.

What is keeping gasoline prices higher than they were a year or two ago, economists generally agree, is a rising worldwide demand for all petroleum products. As the nonpartisan Energy Information Administration puts it: "Crude oil prices rose throughout 2004 and 2005, as global oil demand increased dramatically, stretching capacity along the entire oil market system, from crude oil production to transportation (tankers and pipelines) to refinery capacity, nearly to its limits."

Another factor is the continuing effect of Hurricane Katrina, which damaged drilling platforms, refineries and pipelines along the Gulf Coast. The national average for gasoline prices hit a high of $3.07 per gallon on Sept. 5, 2005, and most recently was $2.34 per gallon as of Jan. 23, 2006, nearly 49 cents higher than a year earlier. The EIA said "retail prices are likely to remain elevated as long as some refineries remain shut down and the U.S. gasoline market continues to stretch supplies to their limit."


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## racer66 (Oct 6, 2003)

> Oh, no that's not true. According to the oil industry we are getting a really good deal on the price of a gallon of gas. Exxon has record profits but they are not ripping off the consumers. Just ask them. It is all supply and demand the American way. Pull up to the pump and fill her up and be thankful you are getting such a good deal. Big oil would never rip you off. Where do you get such paranoia?


\

You obviously don't know anything about the oil industry or supply and demand.


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## mr.trooper (Aug 3, 2004)

This whole thing seems shady.


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## Bore.224 (Mar 23, 2005)

Hey thats the American way , Oil Companys can charge whatever they want!! Thats not gouging, if you dont like it dont buy it, if you have to buy it "tought". Our fight should be focused at taxes and our own goverment. Gouging is a communist ,Political correct, liberal phrase line I am suprized at how many of these left wing phrase words I see on this forum.


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## Militant_Tiger (Feb 23, 2004)

Evidently Congress doesn't know the difference between profit and profit margins either.

http://www.nytimes.com/2006/03/14/busin ... yt&emc=rss

They smell a stinker in the oil industry, too.


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## Bobm (Aug 26, 2003)

No they don't! they don't know squat!

It's pure political postureing for the benefit of our economically
ignorant to give the impression they are "looking into it" :roll:

A bigger bunch of phony blowhards the world has never seen.

I will give you 10-1 odds they don't, really can't, do anything about it.

Its really none of their business what the profit margin of any industry is this isn't the Soviet Union , yet.....

none of their business :******:

Anytime congress starts tooting their horn about what they are going to do don't believe it. Unless its something that makes them politically stronger like cooking up another vote buying income redistribution plan.

And I am talking about all of them not just the Dems.

Tiger you of all people should recognize that. Listen to the BS they spew every day thengive it a little thought.

Quit letting your partisanship affect your judgement, and seek the truth.

I am a conservative and therefore usaully vote republican but when I see them acting like jackasses I call them on it and lately its almost every day that they act like jackasses.


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## mr.trooper (Aug 3, 2004)

O, im not mad at the oil companies at all. I think its rediculous that the government tacks on so many taxes to a gallon of gass.


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## Goose Huntin' Machine (May 8, 2005)

OPEC is the enemy


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## R y a n (Apr 4, 2005)

Bobm said:


> The federal govt makes more money on a gallon than the oil companies that explore, drill, transfer, refine,redistribute ect and the very ignorant among us blame " Evil Oil" (" big business" blah blah blah you pick it).
> 
> Unfortunately our public school system has produced absmally economically ignorant people that interpret record profit incorrectly.
> 
> ...


Bob this issue is so complex it takes some explanation as you've indicated to understand some background on the issue. The US Energy Indusry, from multinational oil and gas conglomerates down to utilities, just can't be discussed in terms of our academic definitions of "capitalism", "profit margin" or "free markets," or anything like that.

It's both a heavily regulated and heavily subsidized sector of our economy. It has to be heavily regulated because it's a dirty industry in that it has major environmental impacts and also because it's vital because our society is driven by energy even more than it's driven by money. It has to be heavily subsidized because, again, without energy, money becomes pretty meaningless. it also needs subsidies and protection for security reasons and because it depends largely on source materials that are finite.

My point is... this is far more complicated than consumers choosing and companies fighting to win their choices. This isn't iPods vs. MP3 players or a ratings war on television -- it's an industry that's meant to be reactive to the profit motives of capitalism but that is also meant to meet our society's needs. Because of that, it's pursuit of profit will sometimes be hindered by the government and will sometimes be protected by the government.

Judging by the long-term results of the industry (I certainly would have liked to have invested in key players a century ago, assuming I'd have had the guts to hold on through the hard times) what we've done to protect this industry has served it more than well enough to have overcome those times when we've had to reign it in.

This sector of our economy is simply too intertwined with our politics to be discussed in the old terms of capitalism vs. a planned economy.

As you've mentioned, the reason "people feel cheated" is because they dont understand how profits work. Exxon Mobil reported 9.9 billion in profits... a record. But its profit margin (the percentage of its sales that go toward its bottom line) only increased by about 1%, from 10-11%.... meaning after all is said and done, for every dollar of gas they sell, they get to keep a dime. That means that they are making a whole extra penny off of the consumer. The record profits are mostly a result of a global increase in demand that has been unmet by supply. Our supply level has not adjusted itself over the last 25 years- As global demand has caught (and in recent months began to exceed) the supply level profits have gone up and up and up.... Capitalism to a T!

Now Bob I'm not sure if you meant me when talking about economically ignorant youth or not....but given my earlier statements, I do have some problems with Big Oil, even if their percentage of gross profit margin has barely risen.

The U.S. Energy Information Administration reports that although the 20 big oil companies it tracks *earned a combined $22.55 billion *last quarter, _those same 20 companies_, together, earned *only $1.59 billion* in the fourth quarter of 2001.

Some thoughts....

First, oil, gas and energy are a heavily subsidized industry. They're not making all of this cash in a laissez faire fantasy world. They're making the money in a highly protected market that has been created for them by our society. So, if they all of the sudden start lighting cigars with $500 bills, it's reasonable to ask why they're so plush.

Second, some of this quarter's profits are, indeed, related to some natural disasters that hurt other sectors of the economy. It's reasonable to want to make sure that they didn't gouge the country that, as I said, built and protects their industry, during a time of need. I'm not even saying they did, just that it's a question that's worth asking.

Third, we know through our own projections on things like heating bills that some segments of the population will not be able to handle paying 50-70% more a month for their utilities this year. Again, it seems reasonable to at least ask if a major American industry enjoying favorable market conditions and recording record profits might step in to help some of the less fortunate members of the society that, and I'll say it one more time, has steadfastly protected the industry where these guys earn their profits.

Thoughts?

Ryan

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## R y a n (Apr 4, 2005)

Here is a great article that outlines Oil company profits, profit margins, comparison to other markets, etc...

Cononco Phillips produced the page, so caveat emptor, but it does provide some insight with numbers and graphs....

http://www.conocophillips.com/newsroom/ ... rofits.htm

I guess I'm just like every other American and want to know whose neck to ring in all of this.... I'm so tired of making Arabs rich off my need to get around in our automobile designed culture. Living out here in the PNW, you are much more aware of green issues and alternative solutions.

Ryan


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## Gohon (Feb 14, 2005)

I was watching CSPAN yesterday on the hearings in congress last week about the oil and gas prices. All the major CEO's from the oil companies were there and answering questions. What became glaring clear was that supply and demand is not fiction but real in the high oil prices. But even more so was that the real culprit in the high gas prices in this country is not the oil companies but government regulations and restrictions.

None of the Senators could dodge this fact and none tried with the exception of Chuckie Schumer who attempted to do his usual smart *** grand standing, but even he was quickly put in his place and had to sulk off with his tail between his legs by the people testifying. 60% of the cost is the cost of oil itself, 20% is state and federal taxes, and 20% is what the oil companies work with which is refining, transporting and profit. Their profit is between 8 and 10 cents a gallon. The record profits this year did not come from gas and oil sold in this country but gas and oil moved in the foreign market.

It also came out that the major companies have been trying to explore for oil in the Rockies and to bring in natural gas from Alaska since the mid 80's but have been stopped by federal regulations every step of the way. I would encourage anyone getting a chance to watch it today if CSPAN replays it which the most likely will.


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