A Gassy issue

Something Smells Fishy to Me

ModerateMan did a blog recently about the cost of gas in everyone’s area. I didn’t get the chance to respond to it. It’s $2.37 in my neighborhood. What got me thinking was a news report (on Channel 7-ABC) last night about gas prices and a story about some truckers who had a strike in Miami.

They went on strike to protest the high cost of gas and what it’s doing to them as they try to earn a living. It’s wreaking havoc because now to fill their tank costs $500 - $600 each time. That’s a big heavy load to carry. I feel for them. And I feel for everyone else too who have to use their vehicle to get out and about.

I just really want to know what’s with the high cost of gas all over again. I had hope that this summer the cost of gas wouldn’t go up as it did last summer. Especially since the President signed the energy bill which is supposed to give these oil companies a lot of tax breaks.

The report also said that a lot of the oil companies, including all the major ones made a huge jump in profits even larger than last year!

I dunno, but this is fishy to me. Do they not care about the regular consumer out there at all? The cost to fill up is so high everywhere it really stinks! Plus you’re no longer getting good mileage to the gallon anymore. Somehow it seems that the higher the cost of gas goes up, the less mileage your car gives. Perhaps they’re mixing the gas somehow so we’re not getting our money’s worth.

I know it’s also a matter of demand and supplying but can’t something be done at all? I just which the powers that be cared enough to put an end to all this nonsense. Then again, the powers that be have so much stakes in those companies….what am I thinking?!

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Several factors are involved in the higher prices.

The prices for the raw oil have gone up to (at last glance) over $66 a barrel.

A major refinery or at least a major component manufacturer recently dropped out of making MTBE after losing hope of some protection from possible environmental impact law-suits: Protection For Fuel Additive Dropped -- Makers of MTBE Lose GOP Backing

And finally, there are many, and I do mean many, different blends of gasoline made and sold in the U.S.A. Why? Because states (and perhaps some localities, but I don't pretend to understand the details down to that level) have various requirements for emissions from vehicles, so they make the gasoline sellers sell various blends that are supposed to help create fewer of the wrong kinds of vehicle emmissions. Their efforts and results are debatable at best, laughable at worst (I know that the blends sold in my area nuked my fuel efficiency, made my car run like crap, and also made the exhaust stink. These emissions are also apparently not as healthy for the environment as the ones they were supposed to replace, instead having by-products finding their way into the water supply where they could be poisoning us all).

If we could somehow establish a national standard for the fuels we sell in this country, where we could bring the number of different blends down to say Regular, Mid-grade, and Hi-test, then costs would go down for the refiners, and that should in turn get passed along to consumers.

There's also requirements (mostly to help agriculture based states) to use more Ethanol blends, which came up in the recent energy bill. Even those Ethanol costs more to make, and uses more energy to make to begin with. Again, not an efficient use of our resources, but one which does lower (by a small amount) the amount of oil we actually use.

The best answer remains conserve as much as you can. Cut out unnecessary trips, double up on trips when possible (go to multiple places while out on an errand to the grocery store for example) and do simple things like that to help save fuel. When the consumption goes down, the prices will eventually level off as well.

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First, nothing can be done about the law of Supply and Demand that will not be worse than the law (see Nixon's wage price controls of the 70s). Why? Human nature or even natural law.

Second, the signing of the energy bill was not meant for today, but for the future. Indeed, while it is not even that great of one, it is a start, but the effects will not be felt for many years to come.

Third, while now I pay $30 for a tank, where just a couple years ago I was paying less than $20 for a tank, you are right that truckers (My sister - yes sister! Stop that snickering - is one) suffer more. But they will not suffer long. WHy? They will have to pass the cost onto the end user, or the consumer. So we will see it in our stores soon.

Finally, not from your article, but a natural progression, is the fact that we have to develope alternatives to oil. But since that is going to be expensive, there has to be a pay back, and at $30 a barrell, that is not there. At $66 a barrell, now Ethanol and other undetermined alternatives look very profitable, and so people are working on them to 'strike it rich'. This will not occur in the next 2 years, but will go a long way for the future of mankind.

In the end, it is really simple economics. Nothing is really inelastic. We just have to find the breaking point, and I think that time is near for oil.

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The prices for the raw oil have gone up to (at last glance) over $66 a barrel.

Yes, I'm aware of this, forgot to mention that and I do know that's a main factor.

A major refinery or at least a major component manufacturer recently dropped out of making MTBE after losing hope of some protection from possible environmental impact law-suits: Protection For Fuel Additive Dropped -- Makers of MTBE Lose GOP Backing

This I wasn't aware of.

And finally, there are many, and I do mean many, different blends of gasoline made and sold in the U.S.A. Why? Because states (and perhaps some localities, but I don't pretend to understand the details down to that level) have various requirements for emissions from vehicles, so they make the gasoline sellers sell various blends that are supposed to help create fewer of the wrong kinds of vehicle emmissions. Their efforts and results are debatable at best, laughable at worst (I know that the blends sold in my area nuked my fuel efficiency, made my car run like crap, and also made the exhaust stink. These emissions are also apparently not as healthy for the environment as the ones they were supposed to replace, instead having by-products finding their way into the water supply where they could be poisoning us all).

Yes, I realised this much and don't know too much about either but do agree that this is the reason why some people have problems with their cars afterwards. There are certain gas stations we avoid buying gas from for this very reason.

The best answer remains conserve as much as you can. Cut out unnecessary trips, double up on trips when possible (go to multiple places while out on an errand to the grocery store for example) and do simple things like that to help save fuel.

Oh yes, we've been doing this. And that helps to conserve.

When the consumption goes down, the prices will eventually level off as well.

I really hope it will.

I really wish it was helpful today although this is good but we need some relief now.

My sister - yes sister! Stop that snickering - is one)

Good for her. Who said a role like this has to be traditional! My student who works with me has a trucker mom too!

But they will not suffer long. WHy? They will have to pass the cost onto the end user, or the consumer. So we will see it in our stores soon.

A lot of factors that some people don't think about too, although we gripe here and we do take it in stride, and yes other major countries have a higher cost in gasoline per gallon but the small country out there can't really afford this. In some countries people are paying really really high costs for gasoline and that creates a big hardship just as it does for the truckers here and anyone who are just trying to get to and from work. So comparing the cost of groceries as I see some people doing makes no sense. As you said Doc, the cost in groceries will go higher when these truckers start to charge higher prices just as airline cost has jumped because of it!

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The higher cost in gas prices is definately creating increase in other areas as noted in the following link: Link

Today the cost of a gallon of gas in my area is $2.50.

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