Questions about oil and gas prices
And they are not about how FOX can, with a straight face, blame Obama for high gas prices yet not give credit when they fall other than to say it is another sign of a poor economy. These are about the industry.
When oil goes up gas usually goes up in real time. I have seen stations change their prices up to three times daily or by ten cents at a time when oil is going up quickly. When someone in the industry is asked why this happens, the answers is they are having to purchase more oil to refine. Think water heater as you take water out more goes in.
When oil goes down gas usually has a delay before going down. I have seen oil to have dropped and it takes a week or more for the gas prices to go down. When asked why, the answer is the gas in the tank at the station, tank farm and even held at the refinery for shipment was purchased at the previously high price so that expensive oil had to make its way through the system before it shows up at the pump. Think of a propane tank, you purchase an amount and use it up before purchasing more.
How can both be correct? I could understand either answer but not both, changing the answer to meet the profits of the industry.
Also, gas prices do not always seem to move in any ratio to oil.
When oil goes up gas seems to go up in a proportional amount e.g. oil goes up 4% then gas goes up 4%. When asked, the answer is oil is the main driver for the price of gas, so a proportional increase would make sense.
When oil goes down gas seems to go down is a non-proportional amount e.g. oil goes down 4% then gas may go down 3.5%. When asked, the answer is oil is only part of what goes into the price of gas and being forced to formulate for the environment is usually specifically used as an example.
While this may not be profiteering from a legal sense it is from an ethical sense. Why are we still giving tax credits and cuts while they are fleecing their customers every chance they can. While making record profit. Of course the oil industry states that they are only making a 3% profit that compared to other industries this wouldn't be considered much. Well, I was told years ago you can't take percents to the bank. They are still making billions!!!
We often hear the market place is the answer. Well, for non-necessities like TV’s the market place may work. For necessities such as gas it doesn't work.
We as consumers seem to have “magic” prices which causes us to change our habits but the industry has learned how to manipulate the consumer. Push prices beyond one of those points knowing we still have a minimum amount we must purchase to still function. Keep it at that point for a while then back off some but not as much as the most recent increase and we are so relieved to have prices a little lower the scale is reset, we have a new magic number. I my area people seem happy that gas is around $3.50 and are talking about how gas is down. Two years ago $3.00 was considered outrageous. I know we may occasionally have an unusual peek or drop but those are not the norm and usually caused by external efforts, also the percents I listed were for example only.
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