Re: Price Gougeing

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- TeGGeRÂ®
  
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posted
18 years ago

Thu, Sep 1, 2005 3:36 PM

jim beam wrote in news: snipped-for-privacy@speakeasy.net:

TeGGeR® wrote: >> It ain't the oil companies either. They don't set the prices, the >> markets do. Cartels have some influence on prices by way of >> production control, but the primary movers of oil pricing are >> political and emotional, and are out of oil company control. >> >> Oil companies benefit from a run-up in prices, but do not cause these >> run- ups. Exxon saw its net profit margin increase from 8% in 2003 to >> 9% in 2004 on account of more expensive oil. It's probably up to >> nearly 10% now. >> > but the oil cartels didn't decide to raise refinery margins from 5% to > 20%.

No, the commodities markets did that. Just look at the current market frenzy surrounding Hurricane Katrina. Up went the price!

Oil company costs did not go up, just the price of what they sell (except for repair costs, much of which will be borne by the insurance companies). Oil companies are not complaining, but they know the jackpot could end at any time, depending on future events, so they're banking evey penny they get.

the oil cartels didn't lobby with the, er, "benefits" of > oxygenated fuels whose only real benefit is reducing calorific > content, thereby increasing sales volume.

Thank the EPA for that. Tetraethyl lead was the cheapest additive around, which is why it was adopted way back. Refineries stuck to that until they were legislated into using something else (which just happened to be more expensive and less efficient).

Any legislated alteration or regional segmentation of finshed gas raises costs to the oil companies. Believe me, they resist all such "environmental" alterations until forced to carry them by law. This is due to the costs involved, and the low margins that gas carries.

There is no point in being the only oil company to suffer due to those enviro costs. Better to wait until everybody is forced to do it, that way nobody has a costing advantage over anyone else.

the oil cartels are not the > ones deciding to use our taxes to subsidize an additive that costs us > three ways.

For that one, you can thank the farm lobby. Nothing like a bit (lot) of pork in your home district to drum up a few sales. Note that the strongest political proponents or ethanol are those with rural districts.

Also, the environuts are irrationally convinced that ethanol is somehow "enviro friendly", so they add their efforts to the farm lobby.

i know a little bit about corporate finance. there's > more than one way to manage your reported figures, especially for > multinationals.

And my sister is a corporate accountant. she's told me many of those ways. and there are a LOT. Many times the board gets the report they want to see, rather thanone that truly reflects the state of the corporatoin, something it's possible for nobody to actually know...

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- jim beam
  
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posted
18 years ago

Fri, Sep 2, 2005 3:08 AM

the commodities markets don't set what's called the "crack split". that's refinery mark up. only the oil companies do that.

see above.

end? how can it end? refineries were busily being taken out of production for "unsceduled maintenence" long before katrina came along. unless there's more capacity and independent competition, gas prices are a one-way street.

no, thank oil company lobbying of the epa for that.

lead was essential to reduce knock. it was around long before the calorific content game was being played.

no, the epa went to look for cleaner burning fuels. these can be achieved by lower aromatic content, closer molecular weight bands, low sulfur, etc. but some genius cleverly managed to side-track epa emphasis into the search for clean burning fuels via "oxygenation" and hence the opportunity for the consumption of what had hitherto been a by-product, mtbe. once mtbe was in the mix, the calorific content game became crystal clear to the oilcos, and the game was on.

so they say, but the fact remains that in california, mtbe was mandated by a govenor whose wife just happened to be a director of a certain large oilco, who also just so happened to have refineries whose unique chemistry just so happened to be able to create large quantities of mtbe. just coincidence you understand. but the real rub came when the other oilcos, whose refinery processes did /not/ produce mtbe, found themselves compelled to get gouged for, sorry, /purchase/ a filthy by-product from a competitor. they complained about /that/ for sure.

see above.

tell that to the california legislature! we have specially formulated gas, specially formulated milk..., the special interest lobbying list goes on and on and on. it's the wild west out here. whoever gets to be sherrif gets to make the rules!

they're not fools - they know pork when they see it. but i still don't see why the rest of us have to pay tax to subsidize that pork, then premium prices, /then/ get inferior product.

this one amazes me. just like the biodiesel freaks. you need to grow tons of crop to harvest a few pounds of oil. the /smart/ route would be to use the whole biomass to produce a liquid hydrocarbon product, but that apparently is too much of a conceptual leap. not that the established fuel industry is in any hurry to point that out - they'd far rather pay lip service to biodiesel because they know the concept to be fundamentally flawed and therefore not long term viable.