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The coming gas-fueled storm

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posted on Mar, 27 2008 @ 11:00 AM
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On my recent outing, listening to XM Radio, I heard a news snippet in between talk shows. The focus was a report that gasoline prices 'normally' had a spike during springtime, and that the change to lighter summer blends would lead to a price increase this year (2008) as well, of $0.75 per gallon!

(Readers please forgive me for not having a link here. I did try to find the story online, but was unsuccessful. If anyone can find an online report, I would appreciate it. Unfortunately, not all news broadcasts are in HTML.)

Anyway, my thoughts turned to the question of why it cost such a huge amount to change the blending of a gallon of gasoline. Obviously, it doesn't, or we would have seen such price jumps throughout our industrialized history. So what else could be at play?

Diesel prices. You see, in 2001, diesel cost less than gasoline. That was the reasoning behind making more personal vehicles that used diesel fuel. Recently, diesel has been far more expensive than gasoline. The simple truth, IMO, is that the oil companies have been hiking the diesel prices to maintain relatively lower gasoline prices and still make their profits. Diesel fuel must be purchased in order to run trucks and therefore stay in business and make money (which then goes to buy more diesel... ). In short, business is subsidizing personal purchases.

But recently a lot of noise has been made about companies laying off drivers and independent drivers forced to shut down due to the high diesel prices. (See this thread.) So apparently the powers that be have decided to place the burden back onto gasoline prices. This claim of higher production costs is a ruse, an excuse used to justify the increase.

I am going to make a prediction here. Diesel prices will slowly drop over the next couple of months, maybe by 10 - 20 cents/gallon. Gasoline prices will hit over $4 per gallon, before tapering off a few cents to around $4 a gallon in the same time frame.

Now, what will be the impact of this? I know in my area, the 9-to-5ers have to buy gas to get to work, but the wages are barely enough to allow it now. Will people be forced to quit because the job doesn't pay enough to cover transportation casts? I seriously doubt we'll see a spike in wages. How many more households will rely on food stamps and welfare? This simply isn't looking good from my vantage point.

Someone, please prove me wrong on this?

TheRedneck




posted on Apr, 1 2008 @ 03:34 PM
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Interesting theory..., I predict I'll see more people walking home with their meager bag of groceries, and more "toys" for sale. I've been seeing boats, campers, bikes, and lots of suv's and trucks for sale in the last couple of months.

Keep a lookout for them in your neck of the woods. Watch Starbuck's stock go into the crapper, too.



posted on Apr, 1 2008 @ 09:12 PM
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I hate to say it Redneck, but I have to agree with you. It's not looking good. America may have priced itself out of oblivion.



posted on Apr, 1 2008 @ 09:43 PM
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Well, bust my crystal ball, Redneck! I think you made a good prediction.

What I see happening next, too, is more deaths/accidents on the highway due to drivers switching to motorcycles to drive to work. I see a lot more bikes/mopeds and motorcycles being used; my young neighbor just bought one to ride to work. The last time this switch happened years ago, the local paper seemed to be reporting an increase in accidents. People turning left into cycles, etc.

Re blending. Have it here in Calif since 1970's.



posted on Apr, 2 2008 @ 08:01 AM
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I have bought my self a TGB 101S Scooter to get me the 25k's to and from work everyday.

In Perth, Western Australia, it costs around AUD$1.40 a litre for unleaded 6c more for 95 octane. I fill my scooter for around AUD$7 and I get around 150k's out of it. About AUD$15 a week for my transportation costs.

Now, if I was to have a car, I would be looking at around AUD$70-80 a week. Of course more motorbikes and scooters will be on the road soon, Perth is starting to look like Italy.



posted on Apr, 2 2008 @ 11:06 AM
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To be unfair, the oil execs called before congress yesterday, said their profit margins aren't any higher than that of other businesses, my come back is, if we disagree with those other businesses, we can always find another business to spend our money at, but with gas we only have a few, very few from which to choose, and they are in collusion to keep prices high. Exxon, with over 40 billion in profits? give me a break. 20 billion isn't enough? even 30 billion, saves the consumer 10 billion, yet the oil companies get billions in tax breaks. Yes they pay huge taxes, but why the billions in tax breaks? Yes I know if congress takes away those tax breaks we will pay even more, but could someone please, explain how this isn't gouging?

I always thought that the more you sell of a product, the less you charge, seems like with gas and oil the opposite is true.



posted on Apr, 2 2008 @ 11:19 AM
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Originally posted by saturnsrings
To be unfair, the oil execs called before congress yesterday, said their profit margins aren't any higher than that of other businesses, my come back is, if we disagree with those other businesses, we can always find another business to spend our money at, but with gas we only have a few, very few from which to choose, and they are in collusion to keep prices high. Exxon, with over 40 billion in profits? give me a break. 20 billion isn't enough? even 30 billion, saves the consumer 10 billion, yet the oil companies get billions in tax breaks. Yes they pay huge taxes, but why the billions in tax breaks? Yes I know if congress takes away those tax breaks we will pay even more, but could someone please, explain how this isn't gouging?

I always thought that the more you sell of a product, the less you charge, seems like with gas and oil the opposite is true.


just so you know.. R&D is not included in their expenses, so that 30 billion doesn't go into some guys pocket. A newd rilling platform and the tech to find a spot to put it aint cheap.



posted on Apr, 2 2008 @ 11:32 AM
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reply to post by gormly
 



Just goes to show you the stupidity, top to bottom, I've noted several times. With "the public" screaming, historically, about these grossly inflated profits being reported by oil companies, you would think the execs. would wise up and find a way to put the R&D in the "expense" column for the quarter.

However, I would contend that those figures do include R&D. That is to say, prior quarters R&D. It has to get figured in somwhere and at some time, right?


[edit on 4/2/2008 by RabbitChaser]



posted on Apr, 2 2008 @ 11:34 AM
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reply to post by gormly
 
Forgive me but, don't we get most of our oil from three countries? Canada, Mexico and Venezuela?

I'm sure they (the oil companies) could get by very well, without the obscene profits. Look, I'm all for companies making a tidy profit, but the oil company profits are obscene, and the majority of their profits come from the backs of the people least likely to be able to afford it, people living paycheck to paycheck (95% of Americans). The poor, likely don't have a car and rely on public transportation, and I'm guessing bus fares have gone up too, like everything else does, when fuel prices rise.



posted on Apr, 3 2008 @ 11:12 AM
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While it's absolutely nothing to gloat over, it does appear that I am at least partially correct so far. Diesel in GA has dropped since my OP from $3.999/gal to $3.899/gal. Gasoline prices have risen by about the same amount.

Now I find this little tidbit of news circulating:

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.

Please visit the link provided for the complete story.

Source: www.nytimes.com...

Now the question deepens. Food stamps are paid for by tax dollars. Less people making money = less tax dollars. So we will be paying more out of less in the government. Someone want to explain to me how this works? I can't seem to get my head around it...

TheRedneck



posted on Apr, 3 2008 @ 02:12 PM
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Interesting theory TR, and one that’s rather difficult to disagree with. I think that they’ll wait until most of the independent truckers are run out of business before they begin to shift the prices in earnest though. The consolidation of all things commercial continues, and is made obvious by the lack of competition among the energy companies. The anti-trust, anti-monopoly laws are being completely ignored, and of course the common man pays the price.



posted on Apr, 3 2008 @ 02:59 PM
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Ok last post... I need some sleep...

Here's an update on oil prices/futures... 4-2-08 Bloomberg:
"Oil Rises, Gasoline Surges to Record on U.S. Fuel-Supply Drop"
www.bloomberg.com...

"The dollar fell after Federal Reserve Chairman Ben S. Bernanke said that the U.S. economy may contract in the first half of this year. Bernanke spoke to Congress's Joint Economic Committee today.

Oil futures rose to a record $111.80 a barrel on March 17 in New York as investors purchased commodities in response to the plunging U.S. dollar. Gold, silver and platinum futures were also higher today."



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