I don’t wish to be unsympathetic to those who are most affected by shifts in fuel pricing, and when the price of gas breaks the $3/gallon threshold, I will worry for such people. However, I am confident we can all (who don’t reside in Texas) adjust to an additional $0.40/gallon by reducing voluntary/recreational use and planning ahead, because I don’t think $2.15/gallon is sustainable in the long term. Anyone who hasn’t planned for an inevitable increase should do so when this crisis abates.
Also, Texas normally enjoys fuel prices that are the lowest in the nation. This temporary increase in the cost probably comes as more of a shock to them than it does the rest of us.
Me and my wife drove from Austin to visit some people in San Antonio yesterday. I made sure I had a full tank before departing.
My gosh! The people in San Antonio are just going berserk with panic buying. Every station that was open had a huge line of cars on the street waiting to get into the gas station. I’m sure glad I didn’t have to fill up there.
Going back to Austin, we passed through Bergheim, only about 24 miles away from downtown San Antonio, and their convenience store/gas station was open and while the pumps were busy, there was no line.
In Austin, open stations either had no line or only a short line to buy gas. But in San Antonio, the drivers are simply going nuts. It’s not that nobody is selling gas there, it’s that apparently everybody feels they need to top off their tank every day.
It’s the same psychology that causes runs on banks and stock market crashes. Stock prices go down because everybody is selling and everybody is selling because stock prices are going down.
Yup!
Those with cooler heads know that those market declines are actually buying opportunities, rather than a time to sell. As Baron Rothschild famously said, “The time to make money is when there is blood in the streets”. That statement can come across as being very crass, but that was his way of saying that, when conditions cause a dip in market prices, that is the time to buy.
From everything I’ve read it takes gas 2-4 weeks from refinery to service station. Farther away from refinery the longer the time. There are THOUSANDS of gas storage tanks all across this country that have gas sitting in their tanks from distilleries produced a couple of weeks before Harvey.
As I said Gas prices don’t work the way other markets do.
As an example…many years ago a chip manufacturer in Korea had a massive fire. Warehouses had about a 5 week supply of chips on hand. When the disaster happened it took 5 weeks before we saw a increase in price. We didn’t see an immediate increase which we’re seeing now with gas.
The majority of American families squeak by from pay day to pay day with no margin for a catastrophe. If they run out of gas or their car fails they approach 3d world refugee status. And when the budget is always short of adequate any added cost for a necessity like gasoline added to the angst of wondering if there is a job left to go to can be devastating I imagine.
I consider myself lucky to have spent most of my life living relatively comfortably without any significant immediate financial worries. But who can be certain about tomorrow? Certainly not me. And at my age I would hate to try to plant a garden to feed myself and a horse. I am very thankful that myself and my family are safe and dry as we see and hear reports of the hundreds of thousands suffering. Maybe I’ll drop by the Salvation Army later and tell them how glad I am that they are there if I ever need them and pre-pay for a few meals just in case.
From what I’ve read, 10 refineries shut down which amounts to a 16.6% decrease in supply. Most of the refineries shut down as a precaution, not because of damage. I have to agree with Mike, no other industry hikes prices like the oil and gas industry. I saw the price increase 60 cents in one day immediately after the hurricane. You can bet the prices will not fall that much in one day when the supply comes back. It will probably take months or the price won’t fall at all. I expect a price increase but they seem to gouge off of catastrophe.
I had to run to Lowes this morning. On the freeway I saw all those desperate people one pay check away from bankruptcy. Lots of new trucks and SUVs, boats, campers, jet skis, and a few three wheel Harleys. You’d think they all had good jobs or something. I don’t know where all these desperate people are but they didn’t seem to be around here. And from the looks of those houses and cars in the Houston area flooded, they looked pretty upscale. Like from normal middle class America going to work every day. Maybe that’s why there weren’t the riots and looting and shooting like other areas-just everyone pitching in to help each other during a time of need.
Again as far as pricing inventory, see first in first out (FIFO), or Last in first out (LIFO) or replacement cost. So you’ve got 5000 gallons on hand that you paid $2 for and you buy another 5000 gallons at $2.20. Are you going to mix the two? Value it all at $2 or $2.20? Keep the tanker in the parking lot until the old stuff is empty? Naw, same thing as Lowes when they get new 2x4s at a higher price. All of their existing 2x4s are marked up accordingly by the computer. This is not rocket science.
When a station prices its gasoline, it has to charge enough to replace the gasoline they just sold on the next gasoline delivery. It doesn’t matter if they paid nothing for the gas they have now. If they don’t make enough to replace that gasoline, they stay “sold out”.
I hate to say it, but all this information about gas deliveries is meaningless in an area devastated by historic, “1000 year”, floods. Nothing gets delivered anywhere if the major roads are six feet under water. All of these descriptions of gas deliveries, definitions of supply and demand, they’re all useless in the devastated areas.
But…are they passable?
The volume of flood water could well have washed-out the underlying structure of some of those roads, and if that took place, the roads may not be fit for traffic.
I’m sure there are some road closures. But most are open, I think. The road flooding resulted from the flatness. The roads filled up, then drained out eventually. Google maps shows traffic on most roads.
Well seeing as how up to a million vehicles in the Houston area are no longer in working order, those stations may not be selling as much gas as before. I’m sure there will be localized ups and downs in supply and demand as this thing works out.
Leased the new rav4 today with a special that ends today, will know in the future if i was the best deal, a lot of cars going down south I imagine. I have 3 weeks left on the 2015 optima lease, anyone sell a car for better than buyout price before the lease ends?
That is so sad, but I see no end to insane ceo paychecks and bonuses, and the loss of benefits, pensions and hourly wage. Milwaulkee passed a mandatory sick leave, only to be overturned by the republicans, soome cities have passed minimum wage laws, to be overturned by the republicans, now I am not effected by these things, but a many us citizens are.
WASHINGTON, D.C. - Workers have a lot less to celebrate on Labor Day this year, in part thanks to a series of state laws passed in recent years that block cities from raising the minimum wage or requiring companies to provide paid sick leave - according to a new report by the Economic Policy Institute.
Living paycheck to paycheck does not necessarily equal having a low income. Some people buy whatever car they can pay cash for, others will buy whatever car they can get a loan for.
I didn’t stop living paycheck to paycheck because I started making more money. I started to make more money because I decided to stop living paycheck to paycheck. I started to ride to work on a bicycle. I drove an old used and payed for car. I stopped going out on the town every night. I stopped buying things on layaway or installments.
Broke people get no breaks. People who have money can make deals, can take advantage of good deals, can say no to bad deals including low wage work.
No. And the link I made was quick to point out how a great many with incomes well above average were living on the edge financially. I wish that the US Census Quick facts were as informative as they were on their old format. The most meaningful data was much more easily located. A cynical person might think that the web site was re-formated to discourage insight into the economic situation.