Frckn gas prices...

[loborick]

went up 20 cents a gallon yesterday here in SF. They go down two or three cents at a time then they raise them like this. It is a damn shame.

[Roob]

went up 20 cents a gallon yesterday here in SF. They go down two or three cents at a time then they raise them like this. It is a damn shame.

I heard Oil just went up to $86 a barrel. $100 a barrel can't be far away. Sucks.

[judas_priest]

gasoline is still cheap. 55 years ago (and more) I can remember price wars, with gas down to about $.25 a gallon. If you adjust for inflation it's about the same price. In fact, we subsidize the cost of operating motor vehicles. With the arrogance of someone whose car got 38 mpg on the last tank of gas, I believe that the prices should go higher. It would be a big aid to conservation - and if we cut back enough we could really stick it to Venezuela, Iran, etc.

As someone who believes in the market system as the most efficient allocater of goods, I like it much more than the CAFE standards. If the price of gas were to go up some $.50 a gallon, I'd bet we could reduce the subdidies given to public transit and Amtrack.

[loborick]

The problem is I know some people who have no alternative but to drive to work. And they are forced to use a lot of gas. An increase like this means an extra $75-$100 a month for them. On a tight budget, that is a lot of money. It takes months for the price to go down 20 cents, but they hike it that much overnight. That is my complaint.

[PitCrowd]

The problem is I know some people who have no alternative but to drive to work. And they are forced to use a lot of gas. An increase like this means an extra $75-$100 a month for them. On a tight budget, that is a lot of money. It takes months for the price to go down 20 cents, but they hike it that much overnight. That is my complaint.

I recently had a teacher that had owned a gas station in the past and she the way she explained it to me made sense from her perspective. I'll try to explain how she did to me and hopefully get things right.

If a gas station has 1000 gallon shipment coming to them and the gas is more expensive than the gas that they already have they have to increase the cost to cover the increased price of the new shipment. The same is also true when the prices go down. A new shipment may be cheaper than what is currently in the tank but they can't reduce the price per gallon immediately otherwise they lose money on the gas that's in the tank. She got out of the business because it's very difficult for the local gas station to make money on just gasoline sales.

I'm with you Rick the rising cost of gasoline has big time effects on the average family. Unfortunately, like you said, many rely on vehicles for transportation to and from work. I would love to ride my bike to work but I need my truck during the day for errands and such. Fortunately I get reimbursed for my mileage.

[Roob]

I recently had a teacher that had owned a gas station in the past and she the way she explained it to me made sense from her perspective. I'll try to explain how she did to me and hopefully get things right.

If a gas station has 1000 gallon shipment coming to them and the gas is more expensive than the gas that they already have they have to increase the cost to cover the increased price of the new shipment. The same is also true when the prices go down. A new shipment may be cheaper than what is currently in the tank but they can't reduce the price per gallon immediately otherwise they lose money on the gas that's in the tank. She got out of the business because it's very difficult for the local gas station to make money on just gasoline sales.

I'm with you Rick the rising cost of gasoline has big time effects on the average family. Unfortunately, like you said, many rely on vehicles for transportation to and from work. I would love to ride my bike to work but I need my truck during the day for errands and such. Fortunately I get reimbursed for my mileage.

Pit, her argument is not logical (picture me as Spock on this one). When prices go up, she's got to cover the cost of the new/incoming shipment. When prices go down, she should cover the cost of the new/incoming shipment. That's consistent.

What the teacher is proposing is that when prices go up she'll charge the higher "spot" price on the inventory she purchased at a lower price, and when the prices go down, she'll charge the higher historic price on the inventory she purchased at a higher price. If she wants to recoup the cost of her purchased inventory, she should stay consistent in her pricing practices. Charge what you paid for it, not what the incoming stuff costs. Or always charge the incoming price cause that's what it takes to replenish your inventory. Her pricing practice was a case of having your cake and eating it too.

[PitCrowd]

In my opinion the nature of gasoline sales lends itself to this sort of situation because they are dealing with a volitile product from a price perspective. If I were a business owner of a gas station I too would try to maximize profits on the inventory I have. Why should I take the hit on higher prices? I would lose money. If my memory serves me correctly she got out of the business in the early 80's before the rise of corner gas stations that sold alot more than just gasoline. ( I was born in 78 so I don't remember gas stations in the early 80's if they were on every corner selling more than just gas like today). So in her case if your business is operating on the revenue that the gasoline sales produce I don't see much of an alternative without incurring losses.

[Roob]

In my opinion the nature of gasoline sales lends itself to this sort of situation because they are dealing with a volitile product from a price perspective. If I were a business owner of a gas station I too would try to maximize profits on the inventory I have. Why should I take the hit on higher prices? I would lose money. If my memory serves me correctly she got out of the business in the early 80's before the rise of corner gas stations that sold alot more than just gasoline. ( I was born in 78 so I don't remember gas stations in the early 80's if they were on every corner selling more than just gas like today). So in her case if your business is operating on the revenue that the gasoline sales produce I don't see much of an alternative without incurring losses.


My point is: Do you price your existing inventory at replenishment cost or at the paid cost. If you price to replenish, then be consistent. If you price based on what you paid, then be consistent. She was applying her practices inconsistently. When her incoming prices went down, she charged you the higher price for what she paid If the prices went up, she charged you the higher current price (not what she paid). This pricing practice is why prices crawl down at 2 cents at a time, but immediately jump 20 cents at other times. Oh well, ultimately she had to price at a point where she could make a living - sounds like it didn't work out for her so she got out.

[loborick]

Exactly. When oil prices go up, the gas stations raise the price immediately, even though they paid a lower price for the inventory they are now selling. Charge what you paid for, not what you think you can justify. There are price controls on natural gas and you charge what you pay for it. There should be controls on gasoline also. There is definitely collusion. When every station in Santa Fe charges the same price and all the prices go up at the same time, that is a coincidence?

And don't even get me started about the stations on Indian land. When they first opened, they charged 25-30 cents less a gallon. They don't pay federal or state taxes which come to about 20 cents a gallon I believe. Now they charge about the same as you pay in Santa Fe. So they are not only making whatever profit the stations in Santa Fe make but also the additional 20 cents in tax they don't have to pay. They will say it is more expensive delivery charges. Well, those would account for 5 cents a gallon at the most. They are the biggest racket. I refuse to put gas at either Santo Domingo or San Felipe anymore.

[PitCrowd]

We the end consumers seem to get it in the "rear end" the most. I guess that's what we get for relying so heavily on a product like gasoline.

[RedPitSea]

Google Abq cheap gas for the lowest prices in town!

[judas_priest]

by raising the gasoline tax, as I proposed, would be feasible only with other changes.

1. Phase in the tax increase at $.05/ a gallon per year for 10 years.

2. Lower FICA taxes to 4% (now 6.2%) social security and 1.5% for Medicare (from 1.45%) but remove the SS cap (now at about $95,000) so that A-Rod would be paying over $1,000,000 payroll tax. At current rates he would be paying less than $200,000.
This supplies more money to wage earners that would help them pay for gas. It also lowers employment costs, since the employers have to pay a matching amount, which would then be lower.

3. Reform (or better yet, rewrite) the income tax code - my own plan, which is far too complex to put here (and also it's not fully written out and I don't think anybody wants to read 10-15 pages on the topic), would exempt income below minimum wage per adult from income tax. The idea is to broaden the base but keep rates down. The top rate under my plan would be 33.33%, which when couples with the changes in FICA taxation I proposed, would keep the total marginal rate to less than 39% no matter what.

My plan would probably put me out of business, but I have no fear that this would happen within 10 years - I think it steps on far too many toes to ever be adopted.


apres moi, le deluge. (Which was not said by King Louis XIV, as is commonly but mistakenly believed, but by one of his mistresses.)

[Garishwolf]

went up 20 cents a gallon yesterday here in SF. They go down two or three cents at a time then they raise them like this. It is a damn shame.

RICK, check it out, a bigmac is 12 cents higher in Fanta Se than ABQ.:mad: