Gas prices in Idaho

Uncle Bumpy will step in and take a stab at this with the understanding that I am not and have never been employed in the oil industry, so I might be blowing smoke. I am a CPA though with a minor in Economics, for whatever that might be worth.

The first thing we have to understand is that a barrel of oil purchased today at $122 will not find its way into production for many weeks. That means the oil in the pipeline, so to speak, and at the refinery is likely oil that was purchased when the price of a barrel was $135 to $145. These companies are not going to automatically drop the price of a gallon of gas because they bought it cheaper today. They have to account for the supply in the chain.

Regarding the Channel 8 news story and the comments attached to the news story, it is clear that the average consumer has close to no understanding of the economic process, whether that be fuel or food. Just because a tanker drives up and drops of 10,000 gallons of fuel today, why would we think we should see pricing at the market rate of $122 a barrel of oil? That new load of 10,000 gallons certainly wasn’t purchased for the new price of $122 a barrle of oil either, it was purchased long ago for a price we don’t know but most likely much higher. See my paragraph above; we have to work through the supply at the refinery and distribution levels of the old stock before we see a drop in pricing at the local levels when the new stock arrives.

Look at it like this – Southwest Airlines has been able to be profitable this entire time of high fuel costs because they hedged and purchased their fuel long ago at prices that were in effect at the time. So if a gas station buys 10,000 gallons of gas at $3.90 to sell for $4.00, so be it. That next 10,000 gallon load may well be $3.95 or it could be $3.80 depending on how many gallons were purchased for future delivery.

It was what, a week before July 4th holiday (please correct if wrong) before Idaho Falls saw $4 gas? I was in Michigan in mid May and they were already at $4 and above. I was in Southwest Texas in mid June and they were paying $4.24 a gallon then. I returned to Idaho Falls in the third week of June and still only paid $3.89 a gallon to fill up. Now on the flip side, I checked with a contact in Michigan just before writing this and they are down to $3.84 and falling weekly, where the corner gas station where I live is still at $4.07.

I personally believe that the gas companies in the area are going to do what they can to squeeze the last penny out of a crappy summer season. Tourism is down to the parks, and I am of the thought that a lot of gas companies have future purchases of xxxx’s of gallons of gas they are still obligated for whether they have the business now or not. As stated earlier, those future gas loads are at a higher price for a barrel of oil than the $122 we are at today.

And finally, I still maintain the energy issues are not a supply and demand issue, they are the lack of a national energy policy issue. Problem is, as we work our way down to cheaper fuel prices and the impact to our wallets is less and less, we tend to forget the pain and go back to our old habits.

Follow Obama’s lead to save gas and avoid drilling…………just inflate your tires more and get tune ups.

http://www.youtube.com/watch?v=XzZNP4tTfV0

When you finish picking your jaw off the floor please let me know what you think of the Senator’s plan.

And exactly what is McCain’s plan? From everything I’ve read, it’s simply a plan to make the rich even richer, not to help anyone else. Can you show me something that diverts from this well known fact? You can make all the jabs at Obama that you wish to, but it still isn’t making McCain look good.

Which again, is why for the past several years, I always seem to cast my vote for the lesser of two evils.

Making fun of Obama isn’t good enough without some proof that McCain can do better. I haven’t seen it.

Okay. For the skeptic who thinks Obama is in la-la land when it comes to saving all that gas and oil by inflating tires, tune-ups, etc. Please pick your stupid jaw or whatever it is off the floor and read this, from ragingred.wordpress.com:

“How much oil could Americans save if we all took measures like properly inflating our tires, getting regular tune-ups, regularly changing our air filters, and driving more efficiently? The answer:

Using current numbers from the Bush DOE and EPA , the answer appears to be some 2.5 to 3 million barrels a day — 20 times what could be found if we ended the congressional moratorium on offshore drilling and three times the oil we are likely to find in the Arctic National Wildlife Refuge.”

Anyone who laughs and scoffs at this is simply too lazy to work and help the country through our energy crisis. You deserve nothing.

“Please pick your stupid jaw or whatever it is off the floor. . . ”

what can this possibly mean? ( I tried to italicize “whatever it is” but couldn’t.)

Loud proud hippie and Caleb, I appreciate the posts. I have always been told that regular tune ups and properly inflated tires were the key to not only saving gas, but increasing the life of your vehicle. It’s a win-win no matter how you view it.

Barack Obama — fighting to keep us ignorant

It’s unfortunate that, at least until this Friday, Barack Obama opposed off-shore drilling. Still, this is a policy issue on which reasonable people probably can differ and certainly could before gasoline prices skyrocketed. But, Obama has also led a one-man crusade to keep the American people ignorant about what’s at stake in the debate over off-shore drilling. This is almost criminal. For it implies that there is no set of facts under which we should ever consider drilling off-shore. The absurdity of that position, always apparent, is confirmed by Obama’s willingness to flip on the issue.

Here’s the background. In 2005, Congress considered energy legislation that included an off-shore inventory. The inventory would provide an estimate of our off-shore reserves. Taking it wouldn’t mean drilling; it would just tell us what’s out there. Yet Obama voted to kill the off-shore inventory provision. So, unfortunately, did John McCain. However, the effort to kill the inventory failed, and the first inventory report was issued in February 2006.

Obama, though, did not give up in his efforts to keep the public ignorant. In January 2007, he proposed legislation to eliminate the authorization to conduct the inventory, as established in the 2005 law. Obama’s bill is S. 115. The key provision is section 101(a)(5). It provides that “Section 357 (42 U.S.C. 15912) (relating to comprehensive inventory of OCS oil and natural gas resources)” is “repealed as of the date of enactment of this act.” It’s my understanding that Obama is the only sponsor of this legislation. Here is the link:

http://www.govtrack.us/congress/bill.xpd?bill=s110-115

Ironically, Obama called his legislation “The Oil SENSE Act.” How audacious a label for an act that would deprive the public of key information relevant to deciding whether off-shore drilling makes sense. As far as I know, Obama’s legislation is still pending.

It’s wonderful that Obama now thinks it might be ok to drill off-shore, provided that such drilling is part of an “overarching really thoughtful” energy package. Perhaps now, as part of the package, Obama will stop opposing an inventory of our off-shore energy assets. After all, if Obama is prepared to support drilling, he no longer needs to keep voters in the dark about what we are losing by not drilling.

Barack Obama has taken some undeserved criticism for suggesting that people properly inflate their tires and keep their cars tuned. I think those are valid suggestions. But if you don’t buy into that, maybe you will think John McCain’s solutions are better. In April of this year he recommended turning the lights out 5 minutes earlier and not driving that extra block.

http://www.thecarpetbaggerreport.com/archives/16454.html

I’m curious whether those who were critical of Obama’s position will feel the same regarding McCain’s. Somehow I doubt it.

We need the government to remind us not to eat Big Mac’s too. The mind is truly a terrible thing to waste, but at least we have the government to help us out. Whew, and I was worried because I almost forgot to eat because Big Brother wasn’t around to tell me how to eat some Tofu instead of fat McDonald’s sandwiches.

I am also glad that the government can help me save some more gas and be more efficient……seriously, while educating the public is fine, when we use these teachable moments as a replacement for real action that will increase supply and drive down oil speculation (and prices) I have a problem with that. There is no way that Obama’s math adds up.

Just for fun, I did the math. Properly inflating your tires can improve gas mileage by 3%. Of course, many people already keep their tires at the proper inflation level, and many more are at least close to being properly inflated. Let’s be kind and assume that one-half of the total possible savings would be realized if we all inflated our tires properly; that’s a net gain of 1.5% fuel efficiency.

Americans drive approximately 2,880 billion miles per year by estimates from AAA. If we average 24 mpg, we use around 120 billion gallons of gasoline in our vehicles. If, through the perfect tire inflation, we improved our overall fuel efficiency by 1.5%, that would be 1.8 billion gallons. A barrel of oil produces around 20 gallons of gasoline, so the total savings available through tire inflation is approximately 90 million barrels of oil annually.

How does this stack up against “all the oil that they’re talking about getting off drilling?”

ANWR: 10 billion barrels
Outer Continental Shelf: 18 billion barrels (estimated; the actual total is much higher, since exploration has been banned)
Oil shale: 1 trillion barrels

So, on the above assumptions, it would take only 11,308 YEARS OF OIL PRODUCTION to equal “all the oil that they’re talking about getting off drilling.”

Obama is a curious case. He gives the impression of being a smart guy, but through his unscripted comments we have learned that he knows little about history, science or mathematics. He also seems rather shockingly short on common sense, as this most recent gaffe illustrates.

I think Idahoans are being ripped off at the pump by scam artist and its fraudulent I think the Government needs to get off its lazy butt and do something about it. I think there needs to be harsh penalties to the parties responsible for our gas prices being way higher than the national average. I think someone owes all of Idaho a big fat refund check.

I think that both Obama & McCain were trying to make the point that people could take at least a little personal responsibility for energy consumption. I think they both have a good point.

If Obama’s recommendation is ridiculous isn’t McCain’s idea just as ridiculous? I don’t see the same ridicule being directed toward McCain as Obama.

Nobody should be surprised at either candidates flip flopping. It’s the same old mud slinging and flip flopping that happens every election with every candidate.

Local gas station owners have little control over gas prices, that is if they want to stay in business. It’s not like station owners buy gas for $3.50 and have to decide if they want to sell it for $4.00 or $4.25. There just isn’t that kind of money in gas. Station owners barely make anything, if anything on gas. This is a fact. I’m speaking on 7 years personal experience and industry statistics. One of the main reasons I sold in 2007 was because of diminishing gas margins.

The big oil companies are the ones making record-breaking profits. Billions of dollars in just 3 months. Exxon (remember this is just one oil company) made 40.6 billion in 2007 breaking a record for profits of any US public company in history. The previous record holder – Exxon. In 2008 they made 11.7 billion in 3 just months, again on track to smash its own record. They made $1,300 per second. I’m all for free enterprise but what’s happening right now with gas and oil should be a crime.

Then there are the speculators and traders that buy and sell oil like its a game. Say oil is at $100 a barrel now. They buy it for $105 because they think they can sell it for $110. Another guy buys it for $110 because he thinks he can sell it for $115, and on and on. Each guy making money off the next. This gives you a general idea of what kind of game they’re playing. The price of oil ends up at say $140 when genuine supply and demand should make it only $100. These trust fund babies and their inner circles make billions while Joe Schmo needs to cut down on other necessities just to make it back and forth to work.

These are the “jerks” CafeDelSol, not local gas station owners. When I owned my station, like many other small business owners, I worked long hours. Minimum 50-60 hour weeks. Twelve hour days. All I’m saying is I wouldn’t have done that if I was making a killing off gas. There was no price gouging. I know many station owners and I’m in the majority.

Back to the original post by Open Mind. Too much importance is placed on national averages. So, so many variables go into figuring out the cost of gas. State tax is one of them. Total taxes range from 26 cents to 62 cents per gallon. That’s just one variable. As far as gas prices going up faster than they go down. There is some truth to that. Again, there are just too many variables to try and explain exactly why that happens. But I can tell you this. When gas prices go up fast, most stations lose money. A station would be lucky to be making more than a penny or two in those situations. It’s when prices go down that some of that is recouped, therefore the slower drop in prices. Like I mentioned at the beggining, station owners have little control over gas prices. They have a price they have to pay like consumers do and that price can change daily. They are not making a killing. They usually make the same whether gas sells for $2.20 or $4.50, in fact they might make more at $2.20. It’s the up and down that creates chaos.

Every single gas station owner in the nation wants gas to sell for less, it’s in their best interest. 100% guaranteed.

Do people remember that we were one of the last states to go above $4/gallon when prices were skyrocketing?

Thanks for the clarification, my bad, #27 CafeDelSol and #28 mco53.

I appreciate the explanations, they make sense to me now.

Amen to that! I got gas there this wknd. What’s funny is, I kept waiting and only putting in 5-10 dollars at a time because that station (& most in the city) have been steadily dropping their prices each week for the past 6 weeks or so. I didn’t want to fill up at 2.69 when I figured it would drop to 2.49 in a week. Sure enough, 3 weeks later here we are at 2.09.
I recall somebody saying in the chatbox a couple months ago that we’d never again see gas below 3 dollars a gallon. HA! Bet their eating some tasty crow pie about now. The great thing is, there are places around the country that are below 2 bucks a gallon, so that’s something to look forward to.