Seriously, From what I heard the oil companies are having trouble transitioning from its winter blend to summer blend. How can you make record profits and not be able to fix structural issues.
2007-05-07 07:39:17 · 16 answers · asked by Anonymous in Politics & Government ➔ Politics
OK the transition from winter to summer blend is required by EPA emissions regs. This is a refiner issue, not a producer issue. It happens every year. It's not a structural problem that is fixed or not fixed - it's a capacity / efficiency issue that happens every year. You have X capacity and you need to pull some offline for the switch.
As for retail refined product prices versus crude prices, there's a lag just between retail and wholesale, since retail is so highly competitive - pump price increases also generally lag wholesale price increases, and at these times retailers' margins fall to 6-7 cents per gallon. They make it up on the back end and the average GP/gallon is around a dime.
Retail and wholesale price volatility also results from a thin supply line - there are very limited refined product pipelines, for example, into New England.
Generally though, over periods of several months, the increases in crude prices have not translated penny for penny into increased retail prices - - at every step of the supply line, profits have been squeezed. Refiner margins initially fattened because the price increases were initially demand driven but now they've declined again. Alan, below me, is simply wrong on this point - you can chart light sweet crude and gasoline prices on a graph and see the correlation in the long term.
You asked this question in politics rather than on a message board for COP or GLP so you're probably not looking for the actual answer but that's what I gave you.
2007-05-07 07:49:02 · answer #1 · answered by Anonymous · 1⤊ 1⤋
Reduced gas inventories, not building any refineries since 1978 in the US, and summer blends. I look at the % profits a company makes. If the government taxes them on windfall profits they will pass that on to the comsumer and we'll pay even more for gas. That has never worked. A large % of the price of gas is tax. Federal and state taxes are very high on gas. Exxon does not set the tax levels.
2007-05-07 07:54:36 · answer #2 · answered by Anonymous · 1⤊ 0⤋
The refineries are up and running now, but it's going to take a couple of days for the gas to get to certain parts of the US. I live in Georgia, and in my area, there is illegal price gouging going on, and gas is five dollars a gallon! The owner of the Shell gas stations and Circle K called his privately owned firms and said they could raise the gas to whatever price they wanted to. In my area, gas raised one whole dollar over the weekened.
2016-05-17 11:12:04 · answer #3 · answered by ? 3 · 0⤊ 0⤋
As long as US consumers continue to use more and more gas the OIL companies have no reason to lower the price.
If you were in charge of an OIL company, you would probably do the same.
Last time I checked a gallon of milk is more expensive than a gallon of gas. I don't hear anybody accusing greedy farmers!
2007-05-07 07:54:10 · answer #4 · answered by nosf37 4 · 1⤊ 0⤋
Seasonal factors. In the US, gas prices always head up going into the 'summer driving season,' as shifting rifinery production from heating oil and the like takes time, and demand my rise quickly.
America's refinery difficulties are something that could be fixed with additional investment, but, it would take years, and it would require the cooperation of - or at least, restrained opposistion from - locals and environmentalists.
There would also have to be an anticipation of continued high gas prices for decades to justify the capital expenditures and opperating costs of increased capacity.
2007-05-07 07:46:31 · answer #5 · answered by B.Kevorkian 7 · 1⤊ 2⤋
so the auto industry in conjunction with the oil industry can put more money into finding a way to save us poor consumers more money by coming up with a more efficent automobile. Just a joke. I truly believe it is just a jab for more profits.
2007-05-07 08:03:43 · answer #6 · answered by littledel 5 · 0⤊ 0⤋
so the share holders and the CEOs of the oil companies can have a record profit year again on the backs of the middle and lower classes of America
2007-05-07 07:44:25 · answer #7 · answered by kimba 5 · 2⤊ 2⤋
The oil companies are trying to raise money so that they can make campaign donations to the republicans and not have any of it come out of their record high profits.
2007-05-07 07:52:04 · answer #8 · answered by ♥ Cassie ♥ 5 · 1⤊ 3⤋
Because the NIMBY and Environmental nuts keep them from getting the permits to build.
2007-05-07 07:57:00 · answer #9 · answered by cladiusneroimperator 2 · 1⤊ 0⤋
Because the Republicans who own the oil companies are greedy.
2007-05-07 07:46:57 · answer #10 · answered by andy r 3 · 3⤊ 2⤋