Exxon makes $108 million dollars a day

Arp2 · Post by **Arp2** » Wed May 30, 2007 1:59 pm

Lester wrote:When it is not gouging, it is collusion. One only need to drive 5 minutes up any road to see it at work.

"Yes" and "no".....mostly "no," but it takes some explanation.

Years ago, I did a remote at a new gas station. The manager wanted lots of customer traffic, of course, and gave us a low price to announce on the air that would be on the air only. I asked, "why not put it on the sign?"

"Oh," he said with obvious fear in his voice; "we can't start a huge gas war!"

Over the next couple of hours, as he would get a moment here and there, he explained a few things....

-- Margins are already low; they don't make much until people go into the store.
-- Really low prices create lines that go out into the street, risking (if not causing) accidents, angering the police and local officials, and giving customers a bad overall experience and memory.
-- Really low prices cause the demand to go up to the point that the station becomes unable to maintain supply; since it is a gas station, it must have gasoline available if people really need it or want it (I gathered that there's sort of a "utility" paradigm to it), and, since real money isn't made until the customer comes in the store, the reason most people stop there in the first place (gas) must be there. (He started the day with full tanks and had another delivery scheduled for an hour after our remote. The grand opening was a special circumstance...normally, he couldn't and wouldn't be serviced more than every other day.)
-- If a station would run out and not stay open, it would be in violation of company policy or its franchise agreement (the vast majority of companies, as part of their branding, demand "always open, always there for you").

I'm sure there's more to it....that's what I seem to remember, and it made sense.....

Lester · Post by **Lester** » Wed May 30, 2007 2:03 pm

Arp2 wrote:(I gathered that there's sort of a "utility" paradigm to it)

Exactly... and its prices should be regulated as such.

Arp2 · Post by **Arp2** » Wed May 30, 2007 2:11 pm

Lester wrote:
Arp2 wrote:(I gathered that there's sort of a "utility" paradigm to it)
Exactly... and its prices should be regulated as such.

I meant the overall constant availabilty of gas at market prices, and market prices will exist only as long as all competing outlets have gas available. If gas is unavailable at some nearby outlets, the ones with it will have to raise prices to keep supply available by keeping demand reasonable and managable.

Zak Tyler · Post by **Zak Tyler** » Wed May 30, 2007 2:26 pm

Lester wrote:
"Do, or do not. There is no try." --Yoda

DUDE!
you quoted freakin' Yoda?!?!? you've just put yourself on a whole new level. for the life of me i can't decide whether it's a good level or a bad one though???

i mean, that's pretty sweet and all that you remember that line, and that it is a great philisophical look at the grey area between action and inaction, not to mention it TOTALLY fits here....

BUT

DUDE! you quoted freakin Yoda in an adult conversation...

carry on

Lester · Post by **Lester** » Wed May 30, 2007 6:47 pm

Yoda's quote is 27 years old. If I was quoting Jar-Jar Binks, you might have a point (especially given that fact that anyone that would quote Jar-Jar Binks should be taken out and beaten to death... slowly.) A lot of thought, and Eastern spiritualism went into Yoda's quotes... recognize... bish.

Zak Tyler · Post by **Zak Tyler** » Wed May 30, 2007 6:54 pm

Lester wrote:Yoda's quote is 27 years old. If I was quoting Jar-Jar Binks, you might have a point (especially given that fact that anyone that would quote Jar-Jar Binks should be taken out and beaten to death... slowly.) A lot of thought, and Eastern spiritualism went into Yoda's quotes... recognize... bish.

me-sa think you-sa can lick it.... beeeeechaaaaaa

Bob Campbell · Post by **Bob Campbell** » Wed May 30, 2007 7:17 pm

Speaking of gasoline margins, from a retailers point of view ( my best friend since age 4 is a former district manager for Fast Fare ), any place that sells gas and also sells candy and beer can give the gas away. Profit margin is meaningless. The gas is there to get you into the store to buy candy and beer.
If you're talking about margins for the oil companies, well, several billion dollars a day in profit seems to reflect an adequate margin.
Yes, we have seen the enemy and he is us when it comes to consumption. But anybody who doesn't realise that prices are manipulated at the refinery probably still thinks we invaded Iraq for a reason.
Alternate energy, we're a decade out for fuel cell technology. Another 8-10 years for infrastructure. Solar is ready now. Ethanol is basically bullshit. Fusion is next century. We should probably be building as many fission plants as we can right now. The waste storage problem seems to be not as bad as imagined.

genlock · Post by **genlock** » Wed May 30, 2007 7:57 pm

How many fusion plants exist now?
Where are they?

lastone · Post by **lastone** » Wed May 30, 2007 8:14 pm

Arp2 wrote:

....and market prices will exist only as long as all competing outlets have gas available. If gas is unavailable at some nearby outlets, the ones with it will have to raise prices to keep supply available by keeping demand reasonable and managable.

This "model" doesn't work any more. Let me explain by using our local situation.

Some 90% of our local gas comes from one source;Marathaon. The refinery is just a few miles from here in Ashland, KY. In Huntington there are no Ma and Pa stations that buy directly from big M (such stations now must buy from a jobber who usually ownes the the tanks or pumps or the entire station and leases it out). In huntington there are John Clark Oil, City Ice and Fuel, Little General(Beckley Oil), Go Mart, Prima Marketing, Speedway and Little Johns. All are jobbers and some are quite large. (They can haul gas from elsewhere but it's a long way) The base price for gas is thus set by Marathon, an importer, refiner, wholesaler. The local supply is therefore controlled by Marathon. Supply and base price controlled by one company!

To add to the problem, our prices are most always higher than the national average because of an incident at Marathon a few years ago. They spent millions repairing or replacing gas station equipment in the tri-state (WV, OH, KY) because of "Marcapa". Don't bother to 'Google' it, National Security won't let you find a decription of it. It is a 'biologic' that eats rust and was used to keep those huge storage tanks clean. The story goes that some engineer decided that if 10% solution of this stuff would keep tanks clean, twice that would be twice as good. Too good. It ate thru barges, tanks and gas station piping and equipment like an acid. It was never to get out of the storage tanks....but it did.

Bottom line;

We are paying for their mistake.

They control the supply.

They control the base price.

Free market my ass!!

genlock · Post by **genlock** » Wed May 30, 2007 8:58 pm

National Security? Why?

lastone · Post by **lastone** » Wed May 30, 2007 9:37 pm

It is a 'biologic' meaning it is alive. It lives in oil/gasoline. It eats iron. I can only guess it has many other uses. Perhaps some best not revealed. Last time I 'Googled' it I got something completely off subject.

There is another 'biologic' used to kill it. It too is bad stuff. I saw the safety data sheet on it and it was tiny print, six inches wide and four feet long! No BS. The one thing I remember it said (it was grabbed away from me) was "Inhalation hazard. Inadequate ventilation may cause severe injury and death".

Any chemists on here?