UtopianRanger
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quote:
OK I'll answer that question directly
You have a 30,000 gallon tank priced currently at 2.00 a gallon, and you get word on Monday that Friday when you refill your tanks the price will be not 2.00 but 2.10
That means to refill your tank on Friday you need not $60,000 but rather $63,000 when are you going to raise your pump price Friday or Monday?
The price moves down slower because during the time between Friday the 1st and monday the 4th the retailer has lost opportunity to charge the replacement cost of his stock. Thus they make it up on the back side.
First off all, your argument seems to posture itself in that the guy who owns the gas station always needs to raise his prices way ahead of time in order to gain the capital needed to purchase his replacement stock. That clearly tells me he is operating on a foundation that has no working capital other than his net proceeds in between delivery periods for inventory.
When a grocery store is notified a week ahead of time by it’s beer and wine distributor that the price of Coors Light by the case or 12 pack is moving up 60 cents a unit, I know of no one in the business who immediately runs back into their walk-in cooler to raise their prices in order to gain the extra revenue for the future delivery. Everyone in the business has working capital and the profits are always made/taken on the backside. If the cost of inventory goes up, it’s absorbed until the profits are taken on the back.
What I hear you saying is that there is a built-in extra profit mechanism when ever the price changes, up or down. It may be an accepted practice, but it's just more fuel {pun intended}for my argument that would nationalize the whole petorleum industry and turn it into public utility with wage controls and six percent profit cap. My feeling has always been that oil /gasoline is so vital at this point that it be held in equal representation by the public as a whole.
quote:
Because the answer given fits into the basic outline of what I know to be factual and logical. Supply and demand is factual and logical
The supply and demand concept is a sound one and very logical when left by itself. But when you contextualize it with the added proponet that says ''they who control the supply also control all the information that surrounds the supply'' then it doesn't sound so good. In other words, what are the checks and balances in the system that keep them from colluding and artificially understating the supply?
And since each one of the oil giants classifies the information surrounding its both proven reserves and exploratory as proprietary, there’s no way we can really know for sure
Have you ever taken any time to look at the merger /acquisition history of the petroleum industry? Have you seen how it’s just been rubber stamped time after time after time?
Lou Dobbs and a few others have done some marvelous work going on the record with regard to the Bush administration’s anti-trust division { in justice department} being the most under-utilized in the history of the republic. Checks and balances are thrown out; everything gets a rubber stamp.
- R
< Message edited by UtopianRanger -- 3/13/2007 2:44:19 AM >
_____________________________
"If you are going to win any battle, you have to do one thing. You have to make the mind run the body. Never let the body tell the mind what to do... the body is never tired if the mind is not tired."
-General George S. Patton
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RE: "Gas prices rise to average of $2.55 a gallon&... - 
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