justoffal
Diamond Member
- Jun 29, 2013
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Here is an article that deals with some of the lighter details behind the numbers posted on the Gasoline pumps these days....but this is only one component. Accusing the oil companies of price gouging is a lazy way to scoop political steam from the laboring masses but it is also a deflection from the real problems. Now would the companies gouge if they thought they could? Sure they would....I mean the US government does it better than anyone right?
www.dallasfed.org
In the Article you will see a diagram outlining the journey of Crude oil from the ground to the gas tank. It represents an accurate picture of how the final charge at the pump is built. Notice I am not using the world price because price brings us into a whole new world of money mechanics that this article does not deal with in any detail and some of which is hotly contested but we will offer a few comment on that now.
Less than one percent of the gas stations out the belong to a complete supply chain btw that takes the crude from the ground and eventually sells it to the consumer at the pump. So the retail end has to purchase services from the processing end and they have to do that with the dollar which has become a moving target these days. As more money supply chases the same product base we have a devaluation effect that shows up as a number increase in the final purchase. This does not necessarily mean that the " Price " is higher....what it means is that the currency you are using has renegotiated to a different level of purchasing power. I know, I know it gets into a " Who's on first " debate and can be very confusing at times. Now we have a double whammy effect. If any of the suppliers including the services along the way decide they want more they have a process to go through before they can just demand that " MORE" however they have absolutely no control over the value of the currency. As the money devalues (ie: refiners have to pay the power companies for electricity, chemical companies for process chemicals, waste disposal companies for waste removal....so on and so forth) and the cost of production is affected by the movement of the money the up line services have to be nimble enough to adjust what they take in as currency payment or they could end up operating at a loss very easily. Is there some dishonesty in the process? Probably....but trying to find it would be next to impossible and probably just add cost to the product in the end as it interfered with the flow of the product. Time is also money and time doesn't show up at the gas pump sign...but the numbers that represent it do.
So should we prosecute a few oil company chiefs and force them to take a loss so that we can be treated better at the gas pumps? Go ahead....see what happens.
JO
Don’t look to oil companies to lower high retail gasoline prices
While U.S. retail gasoline prices in many regions have remained stubbornly high since March, this situation reflects frictions in the retail gasoline market rather than the supply of oil or the price of oil.
www.dallasfed.org
In the Article you will see a diagram outlining the journey of Crude oil from the ground to the gas tank. It represents an accurate picture of how the final charge at the pump is built. Notice I am not using the world price because price brings us into a whole new world of money mechanics that this article does not deal with in any detail and some of which is hotly contested but we will offer a few comment on that now.
Less than one percent of the gas stations out the belong to a complete supply chain btw that takes the crude from the ground and eventually sells it to the consumer at the pump. So the retail end has to purchase services from the processing end and they have to do that with the dollar which has become a moving target these days. As more money supply chases the same product base we have a devaluation effect that shows up as a number increase in the final purchase. This does not necessarily mean that the " Price " is higher....what it means is that the currency you are using has renegotiated to a different level of purchasing power. I know, I know it gets into a " Who's on first " debate and can be very confusing at times. Now we have a double whammy effect. If any of the suppliers including the services along the way decide they want more they have a process to go through before they can just demand that " MORE" however they have absolutely no control over the value of the currency. As the money devalues (ie: refiners have to pay the power companies for electricity, chemical companies for process chemicals, waste disposal companies for waste removal....so on and so forth) and the cost of production is affected by the movement of the money the up line services have to be nimble enough to adjust what they take in as currency payment or they could end up operating at a loss very easily. Is there some dishonesty in the process? Probably....but trying to find it would be next to impossible and probably just add cost to the product in the end as it interfered with the flow of the product. Time is also money and time doesn't show up at the gas pump sign...but the numbers that represent it do.
So should we prosecute a few oil company chiefs and force them to take a loss so that we can be treated better at the gas pumps? Go ahead....see what happens.
JO
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