Words of Advice:

"We have it totally under control. It's one person coming from China. It's going to be just fine." -- Donald Trump, 1/22/2020

“We will not see diseases like the coronavirus come here..and isn't it refreshing when contrasting it with the awful presidency of President Obama."
-- Trump Press Secretary Kayleigh McEnany, 2/25/20

"I don't take responsibility for anything." --Donald Trump, 3/13/20

"If Something Seems To Be Too Good To Be True, It's Best To Shoot It, Just In Case." -- Fiona Glenanne

"Flying the Airplane is More Important than Radioing Your Plight to a Person on the Ground Who is Incapable of Understanding or Doing Anything About It." -- Unknown

"There seems to be almost no problem that Congress cannot, by diligent efforts and careful legislative drafting, make ten times worse." -- Me

"What the hell is an `Aluminum Falcon'?" -- Emperor Palpatine

"Eck!" -- George the Cat

Wednesday, December 28, 2011

Gas Prices and Iran

Iran threatened on Tuesday to stop the flow of oil through the Strait of Hormuz if foreign sanctions were imposed on its crude exports over its nuclear ambitions, a move that could trigger military conflict with economies dependent on Gulf oil.
I would not use the word "could" in that sentence. "Likely would" might be better.

What a blockage and almost certain war would do to the price of oil is not worth belaboring.

For decades, now, the local dealers have been telling us that the price they charge is based on the wholesale price of gasoline and diesel fuel and that they are not making any money on high pump prices. They have been telling us that as their margin was based on gallonage and the credit card companies charged them on dollar amounts, that they made little on credit card sales (which is why you now see two prices at most pumps).

Well, this time around, it is bullshit. When the wholesale prices dropped over the last year, the retailers were very slow, slower than usual, to lower their prices. It wasn't a matter of collusion or price-fixing; they all realized that if they didn't lower their prices to follow the drop in wholesale prices, they'd make money. So instead of making twenty cents per gallon, they have been making fifty, sixty cents a gallon.

And here is something that has been widely ignored: The United States has become an exporter of oil. Which proves the point that it doesn't matter how much oil this country produces, for oil is a commodity sold on a world market. Global demand sets crude oil prices.


OldRetiredDude said...

I have been b*tching about this for years! When I bought my first diesel truck I paid 30-40 cents per gal. less than what others paid for gas, now 20 years later I pay $1 MORE per gal. than reg. gas! Diesel costs less to refine than gas! The oil companies are EXPORTING diesel refined here overseas to "emerging markets" to artificially keep the price and their profits higher. All our economy has for the last few years has suffered from the effects of this manipulation of the price of fuel, since our entire transportation system depends on diesel fuel! WHY? Could it be that they are tanking the economy to make Obama look bad? Or is it just plain old greed (which during time of war is also called war profiteering) ?

Doug Alder said...

None of the oil coming from the Keystone XL pipeline will stay in the US either. It is the wrong type of oil - too expensive after refining - it will be shipped off to China. But that won't stop the "job makers" well paid lackeys in congress from claiming it is necessary to reduce America's dependence on foreign oil.