Fuel Prices Up Up and Away!

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Gavin Allan

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Gas prices here are $2.45 a gallon and climbing higher every day. The guy on the news said that we will have $3.50 gallon gas by July for the rest of the summer.



Several states have passed laws requiring 10% ethanol, and now there will soon be an ethanol shortage.



* Summer driving season is here.



* Switch from winter to summer blends causes a disruption.



* Gulf refineries are still not at 100% capacity due to hurricane damage, and Hurricane season is just about to begin again.



* World market prices for oil are not getting cheaper.



* China buys all the oil it can get its hands on.



* Iraq is on brink of massive civil war.



* Iran / Israel are near blowing points.



* We still have issues in North Korea.



* Despite record all time profits, oil companies have not planned to build any more refineries.



Ford screwed the pooch on the '07 SportTrac. With climbing gas prices and dropping sales volumes, I doubt that we see SportTracs in production much more than 3 years from now. Hopefully Ford will roll out another vehicle that has some of the utility and toughness of the first generation SportTrac, but is also at least 600 pounds lighter with a much better engine and transmission so that it has great performance with a V-6 but also gets 25-30 MPG on the highway.
 
Every year the news people predict outrageously high gas prices....and every year it seems we never get there.



Two weeks ago I was paying $2.19...now the cheapest I see daily is $2.41. There's not much I can do about it but pay....but damn if it isn't putting a damper on driving for fun.
 
Every year the news people predict outrageously high gas prices....and every year it seems we never get there.
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they predicted them correctly around here last summer when the price jumped 4 or 5 times in 24 hours...:blink::wacko:
 
Gavin,

If you look at all the reasons you listed, most of them have been around for several years.



I can assure you that the News reporter that claimed gasoline would be $3.50 a gallon, does not know anymore than the rest of the oil speculators...and probably less.



Everyone wants to blame the oil companies because of the record profits, but consider this:



If Exxon/Mobile lowered the price of their gasoline by 25 cents per gallon, do you think that would stop or slow their profits?? They would run out of gasoline very quickly, and while they had no gas to sell, their competitors would be raking in all those profits.



The problem is caused not only by the price of a barrel of oil, but the limited refineries in the US. There have been few if any new refineries built in the USA since the 1970's. When the oil company wanted to build refineries, most states said "Not in my backyard". Also the environmentalist did not want the refineries built anywhere. Now the oil companies are in the perfect situation. They can run their refineries at or near maximum production, and if they can't keep up, the demand for more gas at higher prices will still insure they make record profits.



If gas starts getting too high, it will force more manufacturers and consumers to turn to alternative fuels. Production of E85 will increase, manufacturers will increase the number of Hybrids and Bio-Diesels, etc as well as aHydrogen fuel cells.



If the fuel cost get so high as to cause serious problems with our economy, the Feds will start regulating the oil companies, and force them to build more refinery capacity, and push tax incentive for companies that devlope alternate fuels and power sources.



...Rich



 
HA 245, 279 for regular....

Todd Z
 
If Exxon/Mobile lowered the price of their gasoline by 25 cents per gallon, do you think that would stop or slow their profits?? They would run out of gasoline very quickly, and while they had no gas to sell, their competitors would be raking in all those profits.
Click to expand...



Rich, why do you think the demand for gas is that inelastic? I doubt that I would drive more if gas was $1.00 a gallon cheaper. I drive the same now as I did when gas was 99 cents a gallon a couple of years back. The only difference is back then I had more discretionary income to spend on other stuff. Now more of my money goes to the oil companies.
 
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I think another big reason for the climbing gas prices is the new specs the U.S. Environmental Protection Agency has imposed. Refineries have or are having to build new units to produce ultra-low sulfur gas and ultra-low sulfur diesel just to sell their product. Cost huge amounts of money, and do you think they want to pay for it when they can push off the price tag on the consumer, especially when refineries are so limited and demand is so high. I believe the new specs on sulfur for diesel go into effect this September, and have you seen the price of diesel!!
 
The US Govt makes more profit per gallon of gas than any/all of the oil companies combined, and they don't have to do anything but sit there with their hand out.



Oil companies make less than 10% profit per gallon. The gov't gets 43% per gallon.... gee.... problem?? Yep, we found it.
 
Well at $2.50 a gallon, the $.43 tax is more like 18%, and I doubt they raised it there overnight. Whatever, I've been shoping for a decent motorcycle lately, my neighbor gets around 200miles on his 4 gallon tank; I want that.
 
Summer hasn't started yet. The NE has come out of a rather mild winter, heaters across the country are kicking off and air conditioners haven't started up in full yet, and the price is inching up each day.



Only real reason I can see for the increase right now is the latest issues with Iran...



It will be grab socks again time by July!
 
Yeah, I fail to see much difference between the 07 Trac and an F150 Crew Cab. It's not like a Trac, either the new one or the old one, will save you anything in gas.
 
Gavin,

While you may not drive any more if gas was $1 a gallon, other may not follow your lead. The tendancy is for Americans to buy gas at the lower price, even if they don't need gas now. Even if they normally use another brand of gas, they will flock to the stations that have the cheapest price. If everyone started going to Exxon stations because they were significantly cheaper, they would run out of gas to sell and the other gas stations would then reap the profits from their higher prices. That pretty much how it works everywhere there is a limited suppy of any product.



Even around here, if someone is selling gas a few cents cheaper than the other stations, that station is packed and they frequently run out of gas.



...Rich
 
I want a diesel powered Sport Trac that gets 20+ mpg. What are the chances we could get one of Ford's TDCi diesels in the future?
 
Todd C: that increased economy of the diesel would be offset to a great extent by the higher cost of diesel fuel. It runs 25-35 cents more per gallon around here.



And if more vehicles used diesel, that would drive demand up and there goes even more of your mpg savings for a diesel.
 

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