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Gas Prices

I'm living high on the hog. 2 Jeeps and a GTO. I can fill 3 for what it used to cost to fill one. I wanna go out and blow the tires off the Goat, and 4 wheel all day long!!! Gotta enjoy it while I can. If I was on the boat I'd be burning all 5 gallons a weekend !!!! Lol!!!
 
As of 2:00 pm, oil is down 80 cents again  ,yet the price at the pump has gone up in Petoskey .
 
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$1.99 here now
 
No excuse other than greed & gouging .
 
I was in the retail gas industry for 30 years with multiple locations for most of them.  

1.  What crude is doing today has no bearing on what I sell my fuel for today.  It will eventually effect the range of prices for retail sales.  What I paid for the gas yesterday has very little bearing on the street price I post.  If I make money or lose money depends on what the big dog in the market wants to sell it for.  Transportation cost will effect a market prices some but usually less than a dime a gallon. People used to ask if we called each other to set gas prices.  The answer was always "I don't have to.  He has a price sign 20ft in the air for me to see what he has changed the price to."  

2.  The profit in the oil business is not in the retail.  All the major oil companies got out of the retail sales and property ownership in the 80's and 90's. Shell was making 100's of millions in profit but their ROI was 1.6%.  They just what an outlet for the products they produce.

3.  Retail sales are capital intensive with small ROI.  I spent 1.3 million to build my last facility in 1999.   In the 10 years we owned it, it averaged 8 cents a gallon gross profit.  In 2008, with gas at $4 and above.  My credit card fees for the year were $24,000 more than the gross gasoline profits I collected for the year.  

4.  The owner has little control of the street pricing or profit margins.  It is capitalism in a very raw state. 

5.  The most profitable years were the 1980's.  Since then the margins on everything have gotten smaller and the regulatory cost climbed, minimum wages increases.  The margins inside the store keep shrinking, .89 pop anysize, .49 coffee anysize.   There is a chain in our area that their business model is that they have to be profitable making 0 profit on the gasoline.  

6.  Before you throw out the greed and gouging accusation on any industry, talk to somebody that has lived it 24/7.

7.  I am now in a industry that allows me weekends to spend with my family and profit is not a dirty word.

8.  Buying gasoline is a negative buying experience.  It is invisible, it sucks money out of my pocket,  I have to buy it even if I don't want to and I don't see the benefit.  

     Just read the complaints about putting $6 gas in the $72,000 boat.  

I'm done :)
 
I've got zero problem paying for gas on my $70K boat...regardless the price.  It is just part of having fun.  No different that $20/gal I was paying for VP Q16 race gas for my drag car.  Just part of the expense of the Hobby.  Same with my big block 8.1l 2001 suburban that I used to have before my Duraburb.  I bought it in 2009...the first time gas hit $4/gal.  No one would touch it with a 10' pole.  I got a great deal on it because of that.  I needed it for my hobbies (drag car and camping)....I had no problems paying $4/gal and get 7-8mph towing.   The reason I had no problems paying it is because the examples above are all hobbies and not a fixed expense.  If I don't have the money, I put the hobbies on hold (eg..I don't drive my pontoon to work).

I commute 47mi each way to work.  My daily driver is a honda accord and I get 31-32mph (hand calculated).  This is a fixed expense and required to support my family and our lifestyle.   This recent drop in fuel prices is great.  I've cut my fixed fuel expenses in half!  It is like getting a raise! (~$200 extra in pocket - small, but still a raise - LOL).    It is having a significant affect - people are spending more.  It is great for the economy - unless you are in the energy segment.

My 0.02
 
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There are three sectors of the U.S. economy that are nearly inelastic relative to demand, and nearly infinitely elastic relative to supply. Raw capitalism doesn't work doesn't work when demand is inelastic. This is a basic tenet of economics. Not a tenet that the anti-regulation crowd wants to acknowledge, but a tenet none-the-less.

1. Energy.

2. Education.

3. Health Care.

In the absence of elasticity in demand, markets must rely on regulation to keep the wheels of commerce greased. In the absence of both regulation and elasticity of demand, the wheels of commerce fall off. When the wheels of commerce fall off, price swings are wild and devastating to (in opposing cycles) producers and consumers. Equal damage is done when producers are winning and consumers are losing, as when consumers are winning and producers are losing. This is not intended to bait any type of political discussion. It's more of an attempt to point out that there are non-negotiable tenets to laws of supply and demand which affect the fabric of capitalism. And ignoring them is perilous. What's the opposite of $3.00 gasoline? It was $2.00 gasoline. What was the opposite of $2.00 gasoline? It was $4.25 gasoline. What was the opposite of $4.25 gasoline? It is currently $1.89 gasoline. What's the opposite of $1.89 gasoline? Not good news...and coming in the years ahead.
 
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The issue now is no one wants to cut production for fear that as soon as they do supply goes down, prices come back up and they loose out. Capital investments have already been dialed back in the wake of weak returns. Eventually the big boys will hold off the longest causing the little one to close shop and we'll all be back to paying $4 a gallon.
 
I assume they'll just stay drilling again and we're back where this all started. Except dampened next time.
 
The Low Cost Of Gas 

Gasoline is 1.86 at The Lake

Gasoline is 2.39 in The City 

Consumers are ecstatic , enjoying life a little more, saving a little more

Pittsburgh is America's New Energy City due to the Marcellus and Utica Shell

Unfortunately this is our headlines in todays paper

The boom-proof economy: How to handle a fracking bust
Like all booms, the fracking boom only lasted while the money was good.

Shale development slowing due to market prices
Reduced market prices mean hydraulic-fracturing companies are not fracking as many wells, water

haulers have reduced runs and lower revenues are translating to reduced payouts for leaseholders.

Chevron laying off 162 workers from Moon Twp-based unit

Do you ever notice what is Good for Main Street is always Bad for Wall Street !!

 
 
I just got a Gas Buddy price hike alert for 25 cents . Oil is still down
 
The Wal-Mart Murphy station that I drive by every day is still holding rock solid at $1.78. Been parked there for a few weeks now...
 
Just got Another Gas Buddy price alert for Northern Michigan .

Oil ticks up a hair ,price at the pump goes up the next day ,oil goes down,takes months for the pump price to lower 
 
Is oil up due to the strikes? Less supply now? I haven't been following it too closely. Hopefully they will continue to stay low going into boating season.
 
They are shutting the rigs down to cause a shortage .

Price will back over $3.00 by springs end 
 
Oil companies can't make margin on oil in this market. Due to the absence of regulation, huge oil companies that have refinery operations see an opportunity to make up the margin on refined products. They simply need to fabricate a shortage in refining capacity. Imagine trying to negotiate a labor contract when management desperately will appreciate a labor strike. Refinery output grinds to a halt and they get to blame labor. Genius!!! Truly. Genius.
 
I worked for a major company in the Detroit area .One year during contract negotiations .The local was going to walk out @ midnight We got a phone call about 5:45 pm told us to stop negotiations,let them walk ,  that way we didn't have to lay them off .
 
You know....that Yamaha 115 doesn't bother me as much now
 
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