Natural disasters and gas prices.

Well here he go again with Harvey. Gas prices have gone up 30% this week. $1.30/liter. That's $5.20/gallon. It happens every time there is a natural, or not so natural, disaster in certain areas. The thing is that the gas is there. It was there, is here and will continue to be here. There is no shortage. So why the ludicrous price hike?

I understand that Houston refines about 25% of North America's gas but there are other ares that also refine. As I've said, there's no shortage of oil to be refined and we aren't scrambling to find fuel to put in our vehicles. Prices in other markets go up when there are shortages. Not here though.

Gas prices are directly linked to inflation. Damn near everything is transported by fuel. The price goes up and that increase is passed on to the consumer. That means less buying power as fuel is a necessity in today's world. Weaker buying power means fewer goods purchased which affects producers. This also gets passed on to the consumer, as well as the employees. High gas prices thus weaken the economy.

So why does this happen? Pure gouging of the consumer? A "tax" to fix the problem that arose? I don't get it. Maybe logic doesn't apply here...or I'm missing something.

Well my gas jumped from 2.39 to 2.59. I'm guessing they have a opportunity to quickly get back more profit from the low prices lately.

It doesn't seem right to me though. Seems more like a price gauging which technically is illegal.

I've also been wondering what kind of damage had been done to the ports over there and I haven't heard one little peep about them at all. That is rather odd in itself don't you think?

I mean if you are go No to screw us just because you can, can't youbat least come up with a plausible story for it?

Well one of the largest refineries took some major damage, also if the fuel is moved by water, the ports around the area could've sustained some damage which will take time to repair before they can pump fuel onto barges. Also I noticed during hurricanes(especially in FL) that if there is major road damage it hinders movement of trucks, which in turn leads to more time waiting bleeding profits.

I'm in FL, and I noticed our fuel has gone up at least 20 cents per gallon since Harvey. Still well under the close to 4$ a gallon we used to pay a few years ago.

My guess is that they might be trying to compensate for lost profits, the prices will normalize in due time. Most people should've stocked up on fuel before the storm because they should've known this was going to happen.

Just another scam in the oil industry when the cost/barrel is already at a low. Oh no! Disaster!!! Must keep profitable!!!

originally posted by: intrepid
Well here he go again with Harvey. Gas prices have gone up 30% this week. $1.30/liter. That's $5.20/gallon. It happens every time there is a natural, or not so natural, disaster in certain areas. The thing is that the gas is there. It was there, is here and will continue to be here. There is no shortage. So why the ludicrous price hike?

I understand that Houston refines about 25% of North America's gas but there are other ares that also refine. As I've said, there's no shortage of oil to be refined and we aren't scrambling to find fuel to put in our vehicles. Prices in other markets go up when there are shortages. Not here though.

Gas prices are directly linked to inflation. Damn near everything is transported by fuel. The price goes up and that increase is passed on to the consumer. That means less buying power as fuel is a necessity in today's world. Weaker buying power means fewer goods purchased which affects producers. This also gets passed on to the consumer, as well as the employees. High gas prices thus weaken the economy.

So why does this happen? Pure gouging of the consumer? A "tax" to fix the problem that arose? I don't get it. Maybe logic doesn't apply here...or I'm missing something.

We've seen a jump from 2.49 per gallon to about 2.89 a gallon and I'm sure that's not the end of it..

It's spelled G-R-E-E-D.

North Carolina went from $2.22 to $2. 49 in three days. Two months ago it was $1.95

The argument is always "We have to raise the prices on the gas that's already in the tanks and paid for to cover the replacement costs."

Anyone else ever notice that if a gnat farts in the direction of a refinery, the price of gas jumps immediately, but when the costs to retailers fall, it takes months for the prices at the pump to drop accordingly?

It's a racket I tell ya.

There have been some not so friendly incidents over gas.

Words from friends and family in Houston say a security person armed with a rifle was monitoring gas at one Randall's location.

well we are the biggest oil exporter to canada and at the same time texas is the biggest oil producing state in the US, while the gulf of mexico is a close second in production...

a reply to: intrepid

Actually, at least in the US, the price rise is lower than after past events like this.

I think it's a bit more complex than just the supply being lower and demand higher although that's an easy reason to understand.

LINK

DeHaan predicted that the storm would add about 15 cents per gallon to the cost of oil; Cinquegrana put the increase at 5 to 10 cents. By comparison, Hurricanes Katrina and Rita, which struck Louisiana and Texas in 2005, caused a 40 cent jump in gas prices.

Another factor cushioning the blow somewhat is that the country's production of gas is near a 10-year peak, with oil stocks last week reaching 463 million barrels.

No idea what the case is in Canada. In reality the profit margin from oil and it's products is very low compared to other retail goods. People tend to not factor in that constant exploration and developing new sources are part of the cost.

From Forbes

on average, between 2006 and 2010, the largest oil companies averaged a profit margin of around 6.5%. This pales in comparison to profit margins in just about every other industry. The pharmaceutical industry, for example, routinely averages a profit margin of about 16%. The soft drink market is even more lucrative.

Here it depends on where we live also. Some area's will see no or little difference in prices, while others more dependent on sources that were impacted will get hit the worst.

Seeing that this time it's a lot less than during prior hurricanes, I'm not sure there are any skeletons hidden in any closets.

a reply to: intrepid

It will rebalance. It's supply and demand. A simple economics lesson for the youngsters.
I remember real gas shortages when you could only buy gas on certain days depending on the first digit of your license plate or tag. Even one day odd the next and lines were blocks long.
Gas was $2.05 last week and $2.35 yesterday.
I haven't gone out yet today.

a reply to: Plotus

South east Virginia has been under two dollars a gallon for a year. Prices started rising at the beginning of summer. This week took a big jump.
What do you expect when the owner of Exxon is the Secretary of state?

a reply to: Sillyolme

You know there is no "owner" of Exxon? It's publicly traded and I'd imagine its mostly owned by ordinary people via their retirement investments. Anytime a company like that is hit in the wallet, it mostly harms ordinary people.

I'm sure you must also be aware that companies need to make a profit to survive and pay it's employees? I'm actually impressed that the cost rise is so very low after something like this.