What competition? Why are oil prices down 50%? If there was no competition, why wouldn't prices still be $100/bbl, and gasoline prices unchanged. Simple econ 101.
Too bad you didn’t take economics 201 or 301.
And lets not ignore the FACT that gas companies have split the market into regions for less competition.
Here in New England Shell, Texaco and several others are almost non existent. Yet you’ll them in great supply in other parts of the country. Speedway is the big player in the east, but non existent west.
I thought, hey, my car port floor is at 5740 feet above sea level, so maybe I can change to Regular on my Sienna. Then, I remembered in Mexico smart people use only premium even if not required by motor.
Petroleum is sent to Houston where the US refineries convert it to gasoline. Premium has the additives put in, in Houston then shipped back to Vera Cruz for distribution.
Regular, that is, Magna Sin, is sent back to Vera Cruz without additives and Pemex puts them in. Sort of. From time to time, regular is messed up when the additives are added, and messes up the fuel system in hundreds of cars.
Yesterday, we went into a small city 80 minutes away. I stopped at Pemex, the usual one I use. They didn’t have Premium. I told him don’t put a drop in my car, drove to the next one which had premium.
In the winter a cousin one day stopped for gas and they didn’t have premium. So, being low he told them to put in regular. When he stopped the car, a Yukon, it wouldn’t start again He had to buy a new fuel pump. Of course, it could have been pure coincidence that it failed at that exact time, but he doesn’t think so.
What a stunning collection of outdated nonsense. Oil supplies increased thanks to the shale revolution, oil prices dropped. If competition didn’t exist, while would those greedy oil companies allow that to happen? Why would dozens of companies be going bankrupt? Why would more than 100,000 US workers be fired? The facts are clear.
Bought two batteries already in the store like these: $43.87 for two,here.
Looked for the highest amp-hour rating. Wired in series for the 24-volt Black & Decker mower.
Was concerned if too much draw for the charger. Kept it suspended in air to allow greatest cooling.
Relieved when the red charger light eventually turned green.
Shell $2.21 - $2.51 - $2.81
Why such a difference now?
Well in part because Shell is a better gasoline. And also, about a year ago when Shell introduced their V-Power Nitro they recommended to their retailers that a price spread of about .60/gallon was reasonable for such a high quality product. Also told their retailers that a higher price would attract more high-level buyers and might actually increase premium sales.
But mostly, because they can. Decades ago when gas was 1.50/gallon there was typically a 10 cent spread between grades. But now that gas is $3/gallon, the spread is higher. Common sense says that you raise your prices to what the market will bear. If a guy drives a car that needs Premium, he’ll buy it whether it’s .20 more or .30 more per gallon. So let’s say the price spread from regular to premium goes from .20 to .50. I’ll need to sell half as many gallons of premium to make the same gross profit on premium. That means I tie up less money to make the same profit.
Fuel retailers are stupid. They have a captive audience–everyone needs gasoline. Everyone selling fuel could be making a comfortable profit, but one guy thinks he can gain more share by lowering price, others follow suit, next thing you know gas is an even-money proposition to get people into your c-store. 10 cents/gallon doesn’t mean a darn thing to the lady filling her gas tank, but it can make the difference between staying afloat or going under for the station owner.
Years ago I convinced my boss to lower his product prices so we could sell more junk food and cigarettes. Most of our income was from cigarettes. We had a huge selection.
I know you have major skin in the game @texases…so almost everything you say about oil is really really skewed toward big oil. Yup…there have been a lot of SMALL oil drilling companies going bankrupt. I guess the $1.8 BILLION Exxon earned the first quarter is so devastating.
@asemaster gasoline is for the most part a commodity. I’m sure Shell V power is a fine fuel. But it’s not worth the 10-20 cents more a gallon they typically charge. As a consumer if I can get 93 octane cheaper at Costco or Kroger, Sheetz or Wawa or whatever, that’s where I’m going to go.
I’ve actually left pumps without getting fuel, when I pulled up and discovered that premium was 70 cents a gallon more than regular. (There are quite a few stations whose signs only display the price of regular and diesel).
As for everyone selling fuel making a comfortable living, as far as I know, they do, I’ve never met someone who owned a gas station/convenience store who lived in poverty. Also getting the gas stations to all raise their prices so that they all can make more money sounds a lot like price fixing. And yes ten cents a gallon is all the reason I need to go to one gas station over another. All other things being equal, it would be foolish no to.
Small oil companies? Many of the 81 (so far) are billion dollar companies. And Exxon lost money on its oil production activities, those low profits were made in the downstream parts of the company. In any industry a company that makes $1.8 billion in profits on $48.7 billion in sales (3.7% profit) is doing poorly. Imagine the uproar if Apple or Microsoft made 3.7% profit, instead of the 21% and 18% they made last quarter.
It’s simple: high prices allowed new technology to be developed. American production exploded, world supplies increased, driving prices down. Econ 101, the claims of no competition are proven wrong with these basic, obvious facts.
@“Robert Gift” Thank you for the link and information about mower batteries. I didn’t think to try WalMart. I called one battery store and the price was $104 installed., I then went on the internet and bought the batteries for about $70 including shipping. It was a minute job to put in the new batteries. My wife likes to mow and I don’t. She has had two foot surgeries and two rotator cuff surgeries and I really don’t want her using the mower at all. I do use the battery mower. She finds it too heavy and prefers the old aluminum deck 18" mower. She doesn’t want a self propelled mower. I do most of the mowing with the battery mower and leave a small area for her to mow with the other mower. We have another old push mower, but it almost asphyxiates me when I use it because it burns oil. I do like the quiet operation of the battery mower
@texases - that’s for proving my point. Oil production is down yet demand is at or near record high and prices are low. This summer gas usage is expected to be record breaking and yet gas prices are expected to drop. Lowest prices we’ve seen in years. Just proves that Eco 101 supply and demand has NOTHING to do with gas prices.
Nonsense. Oil supplies are at record highs. The oil and gas price drop are due to the 4 million barrels a day of US production added to the market. Facts are facts. What, now you’re claiming the oil companies are manipulating the markets so they can go bankrupt? That somehow makes sense to you?
WRONG. Large corporations have been manipulating prices for centuries to drive out competition. If you theory was correct then oil production would have halted years ago to keep oruces high. Demand drives prices up not down.
It’s done all the time. It’s called remove competition. Ever hear of a company called Mucrosoft? See how they stomped out competition. Oil companies drive prices down and alternative energy solutions go out of business or are severely crippled.
So the oil companies are removing themselves. Ok. The fact that there’s 4 million barrels of extra oil on the market doesn’t matter. The fact that there’s 50% more crude in storage than normal doesn’t matter. Your wacky conspiracy theory is the truth…