Re: [CH] interesting item worth looking at related to gas...

Calvin Donaghey (gdonaghey@bitstreet.com)
Sat, 03 Apr 1999 18:40:09 -0600 

Scott-
No flame here, I don't like high gasoline prices either.  It is the right of all consumers, whether they are consuming chiles, salsa, burnt cat sauce(tm), or gasoline (please note
how I managed to stay on subject while balancing on soapbox), to refuse to buy if they think the price is too high.  I'll even go along with your gas out.  However, there are some
facts you may or may not be aware of.  It is the "downstream end" of the market which is now profit taking on gasoline.
As someone who works in the oil business, I know what it costs to produce, ship, and refine crude oil to gasoline.  Over the last year, spot oil prices have averaged about $15 per
barrel, which for most US wells, barely covers costs of producing, let alone exploring and drilling.  Producers, however, get paid by refiners based on posted price, which today,
in our area, is about $2.80 less, or $12.20, less about 4% to 8% (depending on where you are) ad valorum taxes.  To put that in perspective, here are some average prices PER
BARREL of common items:
    Bottled Water - $30 to $200
    Beer - $150 to $250
    Milk - $90 to $130
    Coke - $120 to $175
    Picante Sauce - $665 to $900 or more
    Tabasco Sauce - $1,300 or more
    Dave's Insanity Sauce - don't ask.
The "so-called oil cartel" had little to do with your recent gasoline price increases, because the oil which is now selling at $14.00 per barrel (up from $10.75 when OPEC
announced it's proposed cuts) has not yet arrived at the gas pump, and will not for some time.  Retailers (big oil companies who are also retailers included) and Marketers use the
news media alarmism as an excuse to up the price, blaming the oil prices in the upstream industry (OPEC and the little producers as well).  In addition, two major refineries in
California burned up, which triples or quadruples handling costs to get products to market, and retailers are quick to take advantage of supply/demand emergencies. As long as they
can get someone to pay the inflated prices, the practice will continue. A portion of your gasoline costs are also related to very high California fuel taxes.  Although retailers
are probably increasing their margin right now at your expense, they still have a limited profit margin.
Here in Abilene, Texas, the $1.10 price per gallon at the pump breaks down as follows:
Actual price of crude - $0.34
State and Federal taxes - $0.38
Trucking/pipelining/handling - $0.07
Refining - $0.11
Marketing - $0.05
There is about $0.15 spread out between trucking, Refining and marketing for profit. If a retailer was getting  $0.10 per gallon and sold an average of 3,500 gals.per day, he
makes 350 bucks to pay his help, rent, franchise fees, overhead and taxes.  The Chevron dealer where I trade says he makes about 3.5 cents per gallon.  That's why they all sell
milk, beer, ice, cokes, bottled water, etc.  Maybe they should be selling salsa, Dave's, Tabasco, etc.  ;-)  Hmmmmmmmm.............what a concept!
Calvin

Scott Northup wrote:

> Bleedin' eye Scott here....
>
> Now I know this list is meant for appeasing the capsicum gods, but I think this is worth posting and weathering the bitching I'll get for posting non-capsicum related items...
> So here it is...
>
>  >  GAS OUT
>                 > >
>                 > >
>                 > > THE GREAT "GAS OUT"
>                 > > It's time we did something about the price
>                 > > of gasoline in America!  We are all sick and
>                 > > tired of high prices when there are literally
>                 > > millions of gallons in storage.
>                 > >      Know what I found out?  If there was just
>                 > > ONE day when no one purchased any
>                 > > gasoline, prices would drop drastically.
>                 > >      The so-called oil cartel has decided to
>                 > > slow production by some 2 million barrels
>                 > > per day to drive up the price.  I have decided
>                 > > to see how many Americans we can get
>                 > > to NOT BUY ANY GASOLINE on one
>                 > > particular day!
>                 > >      Let's have a GAS OUT!  Do not buy any
>                 > > gasoline on APRIL 30, 1999!!!!!
>                 > > Buy on Thursday before, or Saturday after.
>                 > > Do not buy any gasoline on FRIDAY,
>                 > > APRIL 30, 1999.
>                 > >      Wanna help?  Send this message to
>                 > > everyone you know.  Ask them to do the same.
>                 > > All we need is a few million to participate in
>                 > > order to make a difference.
>                 > >      Let me know how many you will send out.
>                 > >      We CAN make a difference.
>                 > >
>                 > >      Thanks.
>
> Now you all behave and feel free to pass this along as it really would make a great statement that all us lemmings could send out a wave of woo....
> -S-