Howard Scott pearlmanHow come The Price Of Oil Dropped 50 cents a gallon but gasoline only dropped 10 cents ?
Because they know drilling here in the United States is going to be pushed with other alternatives. Don't get too excited because it's not down where it was and it's going to be like the polls up one and down another.How come The Price Of Oil Dropped 50 cents a gallon but gasoline only dropped 10 cents ?
According to gasbuddy it's gone down about 30 cents nationally since mid- July, but it's still a good question.
Number one, gasoline refining margins went down when the price of oil kept going up. The oil companies have made their record profits on oil production, but relatively nothing on the refining. In other words, the price of gas didn't go up proportionally with the price of oil even taking out takes, transport, the station's keep, etc. Now that the price of gas is going down, the refiners are opening their margins back up. Second, there are a couple blending components that go into ';summer'; gasoline that are in relatively short supply because the government just mandated them, to make the stuff burn cleaner, and the refiners are having trouble keeping up. Third, there's a lag between the time oil price changes and when the gas price changes. That only makes sense because it takes time to buy the oil, get it to the refinery, refine it, then ship it to the stations. Since the price of oil's dropped so much so recently, it'll take time for the price of gas to catch up.
Lets say you are a gas station and you paid $3 a gallon for the gas in your main tank. Now you see that the price of oil has gone up and when you next buy gas from the distributor you know it is going to cost you $3.25 a gallon. Since you have to pay for the gas when you receive it and you do not want to work in the red, as soon as you know the price of YOUR gas is going up, you jack up the price on your pumps. Thus the immediate increase when the price per barrel goes up.
But now the price is coming down. You just filled up at $3.25 a gallon and you see the price of oil came down. So you know the next time it is only going to cost you $3 a gallon. So you could drop your price immediately. But what for? Here is your chance to make some extra money. Bring it down a few cents at a time but do not make the whole price change all at once. Your customers will be happy that the price is going down and most, unlike you, will not notice how slow it is going down. So the local gas station owner makes a bundle.
Now apply that to the major oil companies. They pull the same stunt and they also make a bundle. But their bundle is in the billions.
That is a good question, what it does prove is this whole gas price inflation has nothing to do with supply and demand, the supply has stayed the same for years, there is no shortage of gas anywhere, you can go to any gas station inthe country and get as much gas as you want. Gas price is being determined by a scam involving speculators, oil companies, and the arab OPEC countries, we are all just powerless pawns!
The price of the oil is just one part of the cost it takes to make it into gasoline. The cost of refining (energy, personnel), transportation, taxes (yes, the oil companies pass along the enormous taxes levied by the Federal government on to the consumer, shocking, I know), etc are still huge factors.
If gaspricesroseand fell at the same rate as oil per gallon you would be paying you would be paying $140.per gallon for gas. Hust as deisel is a by product there are many other products that come from a barrel of oil.Some of these are medicines,cosmetic products and so on.
Because we need to allow oil companies to drill wherever they want, allow them to underpay the US for that privelege, use our military to protect their interests, give them tax breaks, and then allow them to set prices in a way that they see fit--probably one that gives them record profits at times they are selling less gas.
It's the free market--what are you a commie?
You must be in one of the lefty states like CA, MA, NY, or NJ 'cause out here in the real world it's dropped by at least 50 cents. Sorry to break it to you, Binky!
Hugs 'n Kisses!!! '08
In my town gas has gone from 4.07 to 3.59 a gallon. I noticed though that 20 miles away (in a bigger city) it is $3.79. It's bad when we think $3.59 a gallon is great!
Probably more demand for gas in your area then. The drop in oil doesn't fully correlate to gas because because of refining and other things that go in the gasoline.
It is not a direct link between the two. Oil makes other products. These are only futures that are sold not barrels of oil.
Gas dropped 70cents/gal where I live.
becuase they can now drop prices and shut some people up, and increase thier profit margin at the same time. why wouldn't they do that? its good business.
I noticed that obama has taken millions from ethanol interest groups along with 300 advisors. Back to you.
gas dropped 24 cents in my gas station
and its not exact or gas would be 2.85 thats 120 a barrel divided by 42
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