RE: Should We Litigate With Gas Companies?

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Archer -> RE: Should We Litigate With Gas Companies? (6/3/2008 1:14:51 PM)
Sorry falls way short of anything resembling proof. it's circumstannctial at best and lacking anything resembling proof of conspiracy between the hundreds of independantly owned franchises. You still have not answered the simple question with every once of gasoline coming into a city being sent to on average 3 storage facilities that supply the entire city how can the prices be more than a few cents different? a prima facia case of look the prices are all the same is severly lacking. You have to actually prove that they conspired to fix the prices, to which the response is the price of oil was pretty much fixed 3- 6 months ago when we bough the options, the price of refining is not that different between one refinery and the next for a specified blend. The cost of moving gasoline from the refinery to the storage facility in Cleavland is pretty much uniform no matter who you are. How if all these costs are pretty much uniform can the prices come out with any significant differences? You'll have to do better than all the prices are the same to convince a judge, besides the DOJ has looked several times for any evidence of an actual price fixing sceme and guess what? They haven't been able to put forth enough of a case to even indict let alone try and convict. The price changes all change on the same day for one good basic reason the prices of the gasoline in the pipeline to all 3 main storage facilities in any given city effects all the folks who's trucks load gasoline from the ONLY 3 places in town that you can get gasoline to fill the tankers. The price of light sweet crude is set on the commodity market and effect every single oil company buying oil on that day equally.

popeye1250 -> RE: Should We Litigate With Gas Companies? (6/3/2008 2:16:52 PM)
quote: ORIGINAL: stef quote: ORIGINAL: popeye1250 I buy 5 gallons at a time now that prices are this high. Why should I be "storing" 15 gallons of gasoline for the oil companies in my gas tank? This makes about as much sense as the people who support those idiotic one day gas boycotts. ~stef Sure it makes sense if you only gas up twice a month like me. But, not if you gas up every day. It's called the time value of money. I'm giving the oil companies less money "up front" by buying only small amounts of gas and not too much more than I calculate that I'll need for five days at a time. I'm, "taking away the float" from them. For example, I bought 5 gallons of gas this afternoon at $3.78 per gallon = $18.90 and I'm still below halfway on my gas guage. My tank holds 19 gallons and I had about three gallons in my tank before buying the 5 gallons. That leaves about 11 gallons that I didn't buy but which I could have. They get paid by how much gas goes into (my) tank not by how much gas is in the storage tanks at the station. I have a void of 11 gallons in my tank which comes out to about $41.58 that I didn't give them today "up front." They're "holding" that 11 gallons not me. Again, they don't get paid until it comes out of the pump. In addition to that I'm carrying around less fuel i.e. weight in my car which will increase the milage.

DomKen -> RE: Should We Litigate With Gas Companies? (6/3/2008 2:44:39 PM)
quote: ORIGINAL: Archer You still have not answered the simple question with every once of gasoline coming into a city being sent to on average 3 storage facilities that supply the entire city how can the prices be more than a few cents different? Simple, find a pair of stations both owned by different corporations, not independents, and figure out their delivery schedule. Watch as the price gets changed upwards by both stations on a day only one station got a delivery. Been done a half dozen or so times by the Chicago TV stations in the last few years. Also even gas station owners think some funky stuff has been going on in the gas business: http://www.msnbc.msn.com/id/20388297/

Irishknight -> RE: Should We Litigate With Gas Companies? (6/3/2008 2:53:16 PM)
Ken, I'd have to say that you have a point.

kdsub -> RE: Should We Litigate With Gas Companies? (6/3/2008 3:17:05 PM)
quote: ORIGINAL: Archer Sorry falls way short of anything resembling proof. it's circumstannctial at best and lacking anything resembling proof of conspiracy between the hundreds of independantly owned franchises. You still have not answered the simple question with every once of gasoline coming into a city being sent to on average 3 storage facilities that supply the entire city how can the prices be more than a few cents different? a prima facia case of look the prices are all the same is severly lacking. You have to actually prove that they conspired to fix the prices, to which the response is the price of oil was pretty much fixed 3- 6 months ago when we bough the options, the price of refining is not that different between one refinery and the next for a specified blend. The cost of moving gasoline from the refinery to the storage facility in Cleavland is pretty much uniform no matter who you are. How if all these costs are pretty much uniform can the prices come out with any significant differences? You'll have to do better than all the prices are the same to convince a judge, besides the DOJ has looked several times for any evidence of an actual price fixing sceme and guess what? They haven't been able to put forth enough of a case to even indict let alone try and convict. The price changes all change on the same day for one good basic reason the prices of the gasoline in the pipeline to all 3 main storage facilities in any given city effects all the folks who's trucks load gasoline from the ONLY 3 places in town that you can get gasoline to fill the tankers. The price of light sweet crude is set on the commodity market and effect every single oil company buying oil on that day equally. Not proof Here yet...But where there is smoke and so on.

SugarMyChurro -> RE: Should We Litigate With Gas Companies? (6/3/2008 5:08:35 PM)
quote: ORIGINAL: pinksugarsub That is tantamount to saying we should tolerate criminal behavior because we are afraid we will be extorted or blackmailed. Exactly. What has happened to people? The only way forward is to completely surrender to big oil? That's our only reasonable alternative? WTF? [8\|] How about this? Big oil corporations could be disbanded immediately. They exist as corporate entities only by leave of the state. All that oil they want to drill up in Alaska belongs to all of us - it's in our national parks/refuges. Maybe they can drill, but first they have to pay us for the oil. How's that? Make any sense?

Griswold -> RE: Should We Litigate With Gas Companies? (6/3/2008 5:13:01 PM)
quote: ORIGINAL: pinksugarsub It's perfectly obvious that the gasoline companies in this country engage in price-fixing and other violations of the Sherman Anti-Trust Act. In fact they seem to have it down to a science; when gas prices rise anywere here in cleveland, they go up all over town within hours, if not minutes. So why isn't the SEC after their venial azzes for breaking the law of the land? Do Y/you think if they were prosecuted it would make things better or worse? pinksugarsub Something tells me that if you worked at Nordstroms, Dillards, WalMart etc., and they suddenly discovered that denim was going up on their next shipment of jeans....every store in the country would have a new price by tomorrow a.m. That ain't collusion, it's good business. It's called selling your products for more than you pay for them. And while nobody wants to hear this fact...yes, the oil companies profits now are in the 10's and 50's of billions. It's still only 8 - 9 percent. Sorry folks, but that ain't a lot of money in my book. If I had to run my businesses on even 1/3rd that level of profit...I'd stay home.

MontrealPhoenix -> RE: Should We Litigate With Gas Companies? (6/3/2008 5:39:37 PM)
~ fast reply ~ Here's a radical idea: start using public transport instead of using your cars. Mind you it's not as convenient but it sure is less expensive and if enough people do it, it might send a nice message to the gas companies. phoenix

SugarMyChurro -> RE: Should We Litigate With Gas Companies? (6/3/2008 5:46:26 PM)
Should the Oil Industry Make a Profit? http://abcnews.go.com/Business/IndustryInfo/Story?id=4749343&page=1 ----- Read the comments too - very interesting. The "free market" is not useful for all things. Our large country is so reliant on gasoline in so many ways that I'd say we have to nationalize oil drilling and distribution as a matter of national security. There are dozens of controls on the marketplace, this would just be one more. I think everyone would rather pocket the 10% plus (that 10% is lowballing in my view). Per tank that adds up. Per week, month and year even more so...

popeye1250 -> RE: Should We Litigate With Gas Companies? (6/3/2008 5:56:33 PM)
quote: ORIGINAL: SugarMyChurro Should the Oil Industry Make a Profit? http://abcnews.go.com/Business/IndustryInfo/Story?id=4749343&page=1 ----- Read the comments too - very interesting. The "free market" is not useful for all things. Our large country is so reliant on gasoline in so many ways that I'd say we have to nationalize oil drilling and distribution as a matter of national security. There are dozens of controls on the marketplace, this would just be one more. I think everyone would rather pocket the 10% plus (that 10% is lowballing in my view). Per tank that adds up. Per week, month and year even more so... Churro, they estimated that 20% of the price of gasoline is due to speculation by traders but that was a year ago that I heard that. It's probably closer to 40% by now.

kdsub -> RE: Should We Litigate With Gas Companies? (6/3/2008 7:19:07 PM)
OK please show me where the oil companies profits are only 8 or 9 percent...I have been looking. Most state from 37 to 68 percent increase in profits. Oil went from $10 to over $124 per barrel in ten years... figure that in percent and tell me their production costs have gone up one thousand two hundred or so percent. Yea 9 percent profit my ass

Archer -> RE: Should We Litigate With Gas Companies? (6/3/2008 9:24:27 PM)
Guess there is no telling folks the basic truths of economics profit vs profit margin, they all want someone to demonize. The figures are available if you just do a simple search and a little readin but it's easier to pull a figure out of a selected orifice and say I'd bet it's more like, than to actually get facts. DomKen I've given this explination before it usually falls on deaf ears but I'll risk the investment of a couple minutes just in case. I start off with 40,000 gallons of gasoline that cost me on Friday 3.80 per gallon I normally set my price at wholesale+ .05 so I set the price at 3.85 however the man tells me the wholesale price is going up for the next monday delivery to 3.85 I know I'm going to need 40,000 gallons based on normal sales figures If I set the price at what I paid for the gasoline + the .05 then when the bill to refill the tanks comes in on Monday how much profit will I have? Not one cent from gasoline I have just enough money to refill the tanks to their 40,000 gallon capacity. So the time you raise prices is when you get the very first notice that the wholesale price will be. If you fail to do that you might just end up not having enough money to fill the tanks. Distribution centers (those tank yards where all the trucks hauling gasoline go to fill up) tend to try to give as much notice to their customers as they can when the wholesale price will be going up. Seeing that those phone calls tend to go out all on the same day who's going to be dumb enough to not raise their price on the same day they get the phonecall. and since even large cities tend to only have a very few storage facilities those phonecalls tend to go out all about the same time. why? because the gasoline entering the pipeline from the refinery gets a set price and, before that the price for the feed stock has been set so they know their next production run is goiung to cost them a set amount to produce.

Archer -> RE: Should We Litigate With Gas Companies? (6/3/2008 9:42:32 PM)
quote: ORIGINAL: kdsub OK please show me where the oil companies profits are only 8 or 9 percent...I have been looking. Most state from 37 to 68 percent increase in profits. Oil went from $10 to over $124 per barrel in ten years... figure that in percent and tell me their production costs have gone up one thousand two hundred or so percent. Yea 9 percent profit my ass Profit gross, gross profit margin, and net profit margin are different numbers kdsub I am citing the net profit margin. here are 5 references that cite the net margin at about 10%. http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702399.html Most financial institutions, such as commercial banks, are routinely more profitable than Exxon Mobil was in its third quarter. For example, Exxon Mobil's gross margin of 9.8 cents of profit for every dollar of revenue pales in comparison to Citigroup Inc.'s 15.7 cents in 2004. By percentage of total revenue, banking is consistently the most profitable industry in America, followed closely by the drug industry. http://www.usnews.com/articles/business/economy/2008/02/01/exxons-profits-measuring-a-record-windfall.html On the margin. The oil industry urges people to look beyond its profits to its profit margin: about 7.6 percent of revenues late last year. That's not much higher than the 5.8 percent profit margin for all U.S. manufacturing, and if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales. http://www.msnbc.msn.com/id/12519975/ Though consumers clearly feel gouged, are oil industry profits out of line with other industries? An oil industry ad, dubbed “Straight talk,” claims they are not, and highlights a multi-year average that is lower than current profits. In fact, the oil industry's profit margin last year was 8.5 percent — higher than the average for all industries — but less than half the profit of banks. http://finance.yahoo.com/q/ks?s=xom No C&P for this chart the net profit margin is listed under Profitability http://www.projo.com/opinion/contributors/content/CT_ambrose11_02-11-08_NI8T8LF_v8.38cbf1e.html Going to the index of some textbook he has learned to love, looking up this “p” phrase and then turning to the correct page, Schumer will discover that a profit margin is the amount of each dollar of revenue a company can hang onto as earnings. It’s reported that in the oil industry last year, the average margin was 7.6 cents. Back in 2004, when Exxon Mobil’s margin was 9.8 percent http://www.hoovers.com/exxon-mobil/--ID__10537,period__A--/free-co-fin-income.xhtml Again no C&P so you'll have to look at the table net profit margin is the 3rd from the bottom. Hopefully that will be enough variation of sources to convince you that I'm speaking the truth about profit margin (which is different than simple profit.

Leatherist -> RE: Should We Litigate With Gas Companies? (6/3/2008 9:44:21 PM)
Quit buying all of that shit from china. Boycott it. Thier income will go down, and they will be buying less cars and using less gas and plastic.

popeye1250 -> RE: Should We Litigate With Gas Companies? (6/3/2008 10:20:19 PM)
quote: ORIGINAL: Leatherist Quit buying all of that shit from china. Boycott it. Thier income will go down, and they will be buying less cars and using less gas and plastic. Well said!

kdsub -> RE: Should We Litigate With Gas Companies? (6/3/2008 10:22:03 PM)
Hi Archer...Maybe we are talking of different companies. The links you showed me were figures provided by oil companies and I am not sure where these companies are in the process. Perhaps it is their suppliers that are making outlandish profits...But someone is!!! It is a fact that a barrel of oil was less than $12 in 1998...and that is a conservative figure. Now it is often over $120..and that is conservative. I can't believe their cost of processing has risen 1200 percent...sorry I don't care what those links say this is a blatant discrepancy. Someone... some company... somewhere... along the line is hiding their profits Butch

UtopianRanger -> RE: Should We Litigate With Gas Companies? (6/3/2008 10:34:43 PM)
quote: ORIGINAL: SugarMyChurro I'm just amazed that we fight these resource wars and fuck it up every time. Forgive me if my thinking has become that the whole point is to raise the prices at the pump. What else has it achieved? A pipeline in Afghanistan? Easy access to Iraq's oil? What? And Archer, what is it you do for the oil companies again? It was always obvious to me that you were up to your eyeballs with the oil industry. One day you admitted it. But I forgot the details because I don't ultimately care what you do. But, for these types of threads it seems only fair that you admit your insider status - and your obvious bias. [8\|] I think gasoline distribution in the U.S. should be run by the federal government in a "not for profit" manner. That would be no different than the way the local water and power companies works. Well, more or less... Seems to me.....Homie is rolln' deep....[;)] Collarme kills the shit outa me sometimes....I'm on a hobby board loaded with collectors that are basically self-employed, professional folks…. and they're screaming about both the long/short term spiral high energy prices will have on the economy. Hell,,,,,even my own business, which conducts over a thousand transactions a day has folks angrily commenting on how we're being screwed through massive collusion. Not a single one of them is smiling or sucking cock for the petroleum industry… Yet when I check into collarme for a bit.... guys are delivering-up soliloquies about elementary supply and demand and how lucky we are that we're only paying four-fifty a gallon. If it wasn’t so serious, It would be a hellva clown act.... Anyways.....I fired off a good letter to Maxine Waters today, urging her to spread her wings...... The petroleum industry needs to be nationalized and run/treated like a public utility, where the shareholders {the public} are the sole arbiters in the managerial wage structure and profit caps. It's for the good of the country/ humanity. - R

DomKen -> RE: Should We Litigate With Gas Companies? (6/3/2008 10:49:25 PM)
quote: ORIGINAL: Archer Guess there is no telling folks the basic truths of economics profit vs profit margin, they all want someone to demonize. The figures are available if you just do a simple search and a little readin but it's easier to pull a figure out of a selected orifice and say I'd bet it's more like, than to actually get facts. DomKen I've given this explination before it usually falls on deaf ears but I'll risk the investment of a couple minutes just in case. I start off with 40,000 gallons of gasoline that cost me on Friday 3.80 per gallon I normally set my price at wholesale+ .05 so I set the price at 3.85 however the man tells me the wholesale price is going up for the next monday delivery to 3.85 I know I'm going to need 40,000 gallons based on normal sales figures If I set the price at what I paid for the gasoline + the .05 then when the bill to refill the tanks comes in on Monday how much profit will I have? Not one cent from gasoline I have just enough money to refill the tanks to their 40,000 gallon capacity. So the time you raise prices is when you get the very first notice that the wholesale price will be. If you fail to do that you might just end up not having enough money to fill the tanks. Distribution centers (those tank yards where all the trucks hauling gasoline go to fill up) tend to try to give as much notice to their customers as they can when the wholesale price will be going up. Seeing that those phone calls tend to go out all on the same day who's going to be dumb enough to not raise their price on the same day they get the phonecall. and since even large cities tend to only have a very few storage facilities those phonecalls tend to go out all about the same time. why? because the gasoline entering the pipeline from the refinery gets a set price and, before that the price for the feed stock has been set so they know their next production run is goiung to cost them a set amount to produce. No. I'm specifically talking about the well documented phenomena of two corporate owned stations on different corners of the same intersection raising prices even though they're on different delivery schedules. By your claims, which are wrong as a matter of basic good business practice as well I might add, one of these stations is a massive money loser while the other isn't. I'm assuming you know enough about business that if this phenomena was actually occuring the station getting lat enotice of its price increases would either get closed down or the system would get fixed so they had timely notice of price increases. Now to explain real world markup to you, nobody intent on staying in business sells something at retail at less than a 2% markup over wholesale, as your example claimed. Markup is pretty commonly 25 to 50% or in some cases even higher, I've never bought gas wholesale so I don't know what the customary markup is but no way is it 2%. So when the wholesale price goes up by $.05 a gallon they have no need to raise the price on gas they already hold since a real business will have a markup able to handle the occasional wholesale price rise. Sure they'll pass it on but in the theoretically intensely competitive market for retail gas no station would raise its prices until it absolutely had to unless of course it was being done in the secure knowledge that the corporate owned station across the street is going to raise prices precisely the same amount.

popeye1250 -> RE: Should We Litigate With Gas Companies? (6/3/2008 10:57:21 PM)
And what does it cost the oil cos to get a BBL of oil out of the ground, $4 or something like that?

DomAviator -> RE: Should We Litigate With Gas Companies? (6/4/2008 1:45:07 AM)
quote: ORIGINAL: popeye1250 Sure it makes sense if you only gas up twice a month like me. But, not if you gas up every day. It's called the time value of money. I'm giving the oil companies less money "up front" by buying only small amounts of gas and not too much more than I calculate that I'll need for five days at a time. I'm, "taking away the float" from them. For example, I bought 5 gallons of gas this afternoon at $3.78 per gallon = $18.90 and I'm still below halfway on my gas guage. My tank holds 19 gallons and I had about three gallons in my tank before buying the 5 gallons. That leaves about 11 gallons that I didn't buy but which I could have. They get paid by how much gas goes into (my) tank not by how much gas is in the storage tanks at the station. I have a void of 11 gallons in my tank which comes out to about $41.58 that I didn't give them today "up front." They're "holding" that 11 gallons not me. Again, they don't get paid until it comes out of the pump. In addition to that I'm carrying around less fuel i.e. weight in my car which will increase the milage. And when you buy that gas you are buying it at the higher price, instead of buying it now before it goes up tommorrow. Plus it is very very very VERY bad to maintain void space in a fuel tank. Whether we are talking about my cars, toys, boat, outdoor power equipment, or even airplanes I ALWAYS keep tanks full. Failing to do so results in condensation and water in the bottom of the tank. If you dont think it accumulates, go down to an airport sometime and watch a pilot drain the sumps on a Cessna that has sat with 1/4 full tanks for a few days... Dont be surprised if he draws off a quart or two of water and rusty shit before he gets a test cup full of nice clean blue 110LL avgas. Remember that that airspace has humidity which will condense on the cold steel... water + steel = rust so you have corrosion and water accumulation in the sump. WAY bad idea... On an airplane I will not tie it down until the tanks are topped off to the vents... Even if I only use 1/8 tank on a trip in one of my vehicles I will fuel it till the nozzle shuts off as I wont let it sit overnight throw a radiation fog / morning dew cycle with airspace in the tank... On things that I may not use for awhile -like my chainsaw, boat, or emergency generator etc- i fuel it almost to full with stabilized fuel, and then inert it with a blanket of Argon from my TIG torch before I put the fuel cap back on....

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