FTC investigating gas price gouging *FINALLY!*

[ECeptor]

All I can say is it's about damn time - FTC on gas (http://www.msnbc.msn.com/id/9424585/).
With Rita building up steam we need to get ready for even more price hikes. I'm betting there will be major c**k blocking by those politicians who's pockets are lined by the oil industry.

[Dribble]

I'm sure that will help. :rolleyes:

[redi4fun]

A great big waste of time and money!!!!!!!
It will go nowhere!!!!!! :frown:

[Havasu_Dreamin]

People amaze me. They bitch and moan and bitch and moan and bitch and moan some more that the governement needs to do soemthing about the price of gas. Then, the government says it is going to do soemthing, and people bitch and moan about it being a waste of time and resources. Is the government inefficient? Hell yes. Is the government good and screwing things up? Again, yes. Will politics play a part, again, most likely yes. But damn, at least they are trying or putting in some degree of effort instead of saying phuck you, pay what they charge. You can't play both sides of the fence.

[ptboat]

:D

[Havasu Hangin']

Unless you can prove price-fixing...little can be done (except saber-rattling for the public).
The FTC has let the oil companies get to a point where they can contol pricing...they need to look in the mirror.
Just my 2 cents.

[Dribble]

People amaze me. They bitch and moan and bitch and moan and bitch and moan some more that the governement needs to do soemthing about the price of gas. Then, the government says it is going to do soemthing, and people bitch and moan about it being a waste of time and resources. Is the government inefficient? Hell yes. Is the government good and screwing things up? Again, yes. Will politics play a part, again, most likely yes. But damn, at least they are trying or putting in some degree of effort instead of saying phuck you, pay what they charge. You can't play both sides of the fence.
THe government has no more control over the price of gas than they do the price of say....
Real estate
Gold coins
IBM stock
A double double with grilled onions.
These prices are market driven.
The price of gas will fall when the price of oil on the open market falls and when refineries are operating at full capacity. Not when some bureaucrat says it should.

[Jyruiz]

I think they should look into it, shit my father-in-law's apartments and homes are controlled, he can't raise his rents but once a year and only 3%, or something like that. And he has to pay the utilities, which ( on his apartments) keep going up.

[MKEELINE]

supply and demand

[Havasu_Dreamin]

THe government has no more control over the price of gas than they do the price of say....
Real estate
Gold coins
IBM stock
A double double with grilled onions.
These prices are market driven.
The price of gas will fall when the price of oil on the open market falls and when refineries are operating at full capacity. Not when some bureaucrat says it should.
I agree, simple economics. What IO was pointing out is that if people bitch about nothing being done, don't then bitch when something is in the process of being done. Even if it is window dressing.

[redi4fun]

People amaze me. They bitch and moan and bitch and moan and bitch and moan some more that the governement needs to do soemthing about the price of gas. Then, the government says it is going to do soemthing, and people bitch and moan about it being a waste of time and resources. Is the government inefficient? Hell yes. Is the government good and screwing things up? Again, yes. Will politics play a part, again, most likely yes. But damn, at least they are trying or putting in some degree of effort instead of saying phuck you, pay what they charge. You can't play both sides of the fence.
I never felt anything should be done in the first place!!! :D
It is simple supply and demand as someone stated and it would be difficult if not impossible to prove price fixing. :cool:

[Havasu_Dreamin]

I never felt anything should be done in the first place!!! :D
It is simple supply and demand as someone stated and it would be difficult if not impossible to prove price fixing. :cool:
Yep. HH said it best, the FTC has allowed this to happen.

[Havasu Hangin']

It is simple supply and demand as someone stated and it would be difficult if not impossible to prove price fixing. :cool:
Because the oil companies now control retail pricing (the FTC has allowed the consolidation), it is no longer "supply and demand".
If there is a storm in the Gulf, why do retail prices rise immediately? Has the cost of the gas in the gas station's tanks risen? No.
Has supply decreased? No.
Has demand increased? No.
Since a select few oil companies now control 80%+ of the retail outlets, and 100% of the refined supply in the US, they can charge whatever they want...regardless of the cost of a barrel of crude oil, or the cost to refine that barrel.
The FTC let it happen.

[BBTAHITI]

If it's "supply and demand", then the FTC has absolutely nothing to do with it. AS a matter of fact, supply and demand (now) has nothing to due with it. It's a commodity driven by futures prices. We've been through this in other threads, and I expect to hear the same oil company rhetoric chiming in soon.....

[redi4fun]

Because the oil companies now control retail pricing (the FTC has allowed the consolidation), it is no longer "supply and demand".
If there is a storm in the Gulf, why do retail prices rise immediately? Has the cost of the gas in the gas station's tanks risen? No.
Has supply decreased? No.
Has demand increased? No.
Since a select few oil companies now control 80%+ of the retail outlets, and 100% of the refined supply in the US, they can charge whatever they want...regardless of the cost of a barrel of crude oil, or the cost to refine that barrel.
The FTC let it happen.
I understand what you are saying, but I was also under the impression that because of the "Special" formulations required for California that supply and demand played a bigger part for the State of California. :cool:

[ECeptor]

ECeptor, just keep in mind that nobody is going to do anything about the station you turned in for charging $3.05/gallon.
I know and didn't really expect them to. But, I did get responses (3 written letters, 3 emails, and one phone call) from local Senators and Congressmen on this subject. I'm sure my one little tiny voice isn't going to make a difference but 1) it sure made me feel better and 2) if there are enough out there like me who say something then something will get done!
Also, Bravo HH! Well said!

[Havasu Hangin']

It's a commodity driven by futures prices.
I'll take it one step further. Although the commodity price affects the cost of raw goods to an oil company, it no longer dictates price like it used to, since there is no competition.
Imagine if only two companies made toilet paper, and you could only buy it from a retail outlet owned by them. Do you think they could charge whatever they wanted...regardless of their manufacturing costs?
Would you still buy it for any price, or stop wiping your butt?

[ECeptor]

I'll take it one step further. Although the commodity price affects the cost of raw goods to an oil company, it no longer dictates price like it used to, since there is no competition.
Imagine if only two companies made toilet paper, and you could only buy it from a retail outlet owned by them. Do you think they could charge whatever they wanted...regardless of their manufacturing costs?
Would you still buy it for any price, or stop wiping your butt?
I'm reminded of some history lessons about business in the US in the early 1900's....trusts of steel, rail road, and petrolum industries and a few more!
Funny, I thought we (US) had progressed past that....guess not!

[Havasu Hangin']

I understand what you are saying, but I was also under the impression that because of the "Special" formulations required for California that supply and demand played a bigger part for the State of California. :cool:
That is just more PR by the oil companies to justify the retail price increase. Like Dribble pointed out, they completely control output.
Here's a little experiment for everyone.
A cost increase is a HUGE profit center to the oil companies. Like I mentioned earlier, since the acquisition cost of gas in the tanks of your local gas station hasn't changed, but the price went up, they make ALOT more margin on that gas.
Large independent retailers aren't setup that way (like Costco or Sam's). Usually, they will sell gas for just above what they paid for it.
The next time there is a big (overnight) increase, look who reflects it immediately (the oil company's retail stations), and who waits for the more expensive wholesale gas to get loaded in the ground. Then you'll see:
1. Who is ripping you off
2. Who controls the retail price
3. Who controls the wholesale price
(hint: the answer is the same on all three)

[Havasu Hangin']

I'm reminded of some history lessons about business in the US in the early 1900's....trusts of steel, rail road, and petrolum industries and a few more!
Funny, I thought we (US) had progressed past that....guess not!
I guess Robinson-Patman doesn't apply if you contribute enough money to certain campaigns... :hammerhea

[ROZ]

These prices are market driven.
The price of gas will fall when the price of oil on the open market falls and when refineries are operating at full capacity. Not when some bureaucrat says it should.
Exactly :notam:
The commission is PR to make you feel better :notam:

[Ziggy]

THe government has no more control over the price of gas than they do the price of say....
.
What just happened in Hawaii?...didn't they put a cap on what wholesale prices would be ? :confused:

[Essex502]

I read a great article but haven't been able to confirm it....that gas station owners price the gasoline at what the EXPECT to pay for the next load TO BE DELIVERED - not what they paid for what is in their tanks. If this is true...the speculate as to the cost and price it accordingly. This concept does seem to explain how a refinery fire one day causes the price of the retail gasoline that is provided by that refinery shoot up the very next day.
HH is absolutely correct about the market consolidation...who remembers the following:
Phillips 66
BP
Amoco
Arco
Chevron
Union 8
76
Texaco
Mobil
Shell
Sunoco
How many companies in the above are still independent?
Why do rising crude oil prices CAUSE record profit to the oil companies and independent refineries? Why were (pre-Katrina) Gulf coast state refineries averaging $0.22 margin per gallon of gasoline sold versus California refineries averaging $0.66 per gallon? Tell me what justifies the difference in margin to the refiners except a consolidated market where market power is in so few hands.
Anyone understand "zone pricing"? Look it up...it's legal and unethical and causes the higher than required price to the consumer.
Greed. Pure Greed. Nothing more.

[ECeptor]

What just happened in Hawaii?...didn't they put a cap on what wholesale prices would be ? :confused:
Wow...I didn't know that but found news on it.
Oil companies ask state to delay gas price cap
By Associated Press
HONOLULU (AP) _ Three oil companies have asked the state to delay imposing a gas price cap so more work can be done to determine its effect on the economy.
Shell Oil Company, Tesoro Hawaii, and Chevron U-S-A filed papers last week with the state Public Utilities Commission asking for the delay.
They said they need more time to determine how the law's stipulations will be affected by an April 2006 mandate for Hawaii's gas to be blended with ethanol.
The commission will rule on implementing the law by September 1.
The state law requires the commission to set a maximum pre-tax wholesale price at which gasoline can be sold in Hawaii.
The maximum will be based on the weekly average of spot prices in different parts of the nation.
The companies also asked that the state repeal the law.
(Copyright 2005 by the Associated Press. All rights reserved.)

[ECeptor]

My gf said this is cheaper than she paid when she lived there (2001)
Hawaii commission sets nation's first ever gas price capPosted: 8/25/2005 3:28:58 PM
HONOLULU (AP) - Hawaii has become the first state in the country to ever put a limit on the wholesale price of gasoline.
The state Public Utilities Commission has slapped a limit of two dollars and 15-cents a gallon on the price wholesalers can charge in Honolulu for regular unleaded. When you add in federal, state and county fuel taxes, that pushes the ceiling to about two-67 a gallon and that doesn't include the state excise tax or the retail markup. The commission has set separate price caps for Hawaii's other islands.
Hawaii's two refiners blast the price cap as a market distortion that will hurt consumers in the long run.
Because all its oil has to be shipped in, Hawaii has long had some of the highest gasoline prices in the nation. Yesterday, the statewide average for unleaded hit a record two-84 a gallon.
Photo Copyright Getty Images

[mickeyfinn]

Station pricing is different based on the direction the cost of fuel is headed. If the price is going down then the stores price their fuel based on what it cost to put it in the ground. If pricing is going up the retail price is based on projected replacement costs. If you own a station and are pricing based on what it cost to put it in the ground and the station next door runs out before you and reduces their price then you may take a small "loss" in order to make room for a fresh load. Must be nice to have a product that you can price that way.

[ECeptor]

Here's a reality check. I saw this when I was looking up article on the Hawaii price cap.
"The national average for regular unleaded gasoline on Thursday was $1.40 per gallon, according to AAA. " June 2002
So, given the national average has doubled in 3 years is there any other explaination than anti-trust violations?

[Havasu Hangin']

Here's a reality check. I saw this when I was looking up article on the Hawaii price cap.
"The national average for regular unleaded gasoline on Thursday was $1.40 per gallon, according to AAA. " June 2002
So, given the national average has doubled in 3 years is there any other explaination than anti-trust violations?
Since the industry isn't regulated, I'm not sure there's a law against a company making record profits?
I'm not a lawyer, but the only anti-trust laws I can think of would have to do with price-fixing amongst competitors...which they will never prove. All the consolidation has taken any free-market checks and balances out of the equation, so the oil companies are holding all the cards.
The FTC let it happen- let's see if they have the political huevos to reel it back in.
BTW- station retail pricing by franchisees is different that corporate stations.

[ECeptor]

How long have we been at war?
So the war is about oil?

[ECeptor]

Since the industry isn't regulated, I'm not sure there's a law against a company making record profits?
I'm not a lawyer, but the only anti-trust laws I can think of would have to do with price-fixing amongst competitors...which they will never prove. All the consolidation has taken any free-market checks and balances out of the equation, so the oil companies are holding all the cards.
The FTC let it happen- let's see if they have the political huevos to reel it back in.
BTW- station retail pricing by franchisees is different that corporate stations.
OK...here's my 'person' experience with the FTC.
When the company I work for merged with another large company in the same industry (we were #2 and #3 premerger) the FTC required us to sell off one brand's product line on our large, mid and small products. They stated that the merger would give us too large of market share. If the FTC is worried about a few thoulsand tractors a year I can't imagine why they've ignored the oil industry which is many, many times larger than ours. I suppose the risk of us price fixing would have driven up the cost of wheat and corn too much...rediculous!
BTW, end result in our industry was our major competitor (the industry leader) decided to gain market share in our transition by slashing prices and would take straight trade on used red or blue equipment for their brand new green equipment. Net result was a price war which nearly broke both companies but left the customers with more bang for their buck.
Last time I checked, I don't get more from 1 gallon of gas than I did 3 years ago despite paying double for it!

[ECeptor]

Isn't everything we do over there really about oil? They have it, we want it.
But, that wasn't really my point. Prices of resources such as steel, lumber, oil, gas, etc, almost always escalate during times of war.
I remember the day we declared war on Iraq...the first time. I went out after the news and filled up my truck. The next morning gas was 15 cents a gallon cheaper!
Hey, if the war is about oil I'm good with that. But last time I checked to the winner go the spoils....so why again did the price go up? Did we lose? :notam:

[ECeptor]

Mostly because demand is so high during times of war, especially for the US since we haven't fought on our own soil since the Civil War. This does not hold true for oil only, almost all resources and building materials are affected.
I know our steel bill at work has gone nuts since that tariff a couple years back. Prices are just now starting to stabilize.

[Havasu Hangin']

OK...here's my 'person' experience with the FTC.
When the company I work for merged with another large company in the same industry (we were #2 and #3 premerger) the FTC required us to sell off one brand's product line on our large, mid and small products. They stated that the merger would give us too large of market share. If the FTC is worried about a few thoulsand tractors a year I can't imagine why they've ignored the oil industry which is many, many times larger than ours. I suppose the risk of us price fixing would have driven up the cost of wheat and corn too much...rediculous!
BTW, end result in our industry was our major competitor (the industry leader) decided to gain market share in our transition by slashing prices and would take straight trade on used red or blue equipment for their brand new green equipment. Net result was a price war which nearly broke both companies but left the customers with more bang for their buck.
Last time I checked, I don't get more from 1 gallon of gas than I did 3 years ago despite paying double for it!
That's the $60,000 question- why has the FTC let the oil companies consolidate and corner the wholesale market?
On the retail side, these companies (who never wanted to be in the retail business in the past) suddenly began buy (or forcing out) franchisees. They did this in many ways, but it was made easier by the fact that they owned much of the land they leased to the franchisee, or by undercutting them on price (since they sold them the wholesale gas and could dictate an uncompetitive price).
All these small gains on the retail side equate to a big win if you want to control the price. Think about it...they may not control the commodity price, but they control the output of the finished product, the price of it, and many of the retail stores (gas stations) it's sold at.
They now could put any franchisee or independent operator out of business at any time, simply by adjusting the retail price....and it's not illegal.
Why did the FTC let it happen? Who knows...but my guess is political clout (money).

[ROZ]

he fact that they owned much of the land they leased to the franchisee,
RAy liked Real Estate and Hamburgers... These guys like Real Estate and gas.. Sometimes Ray's burgers give me gas... :D

[MagicMtnDan]

Thanks Havasu Hangin and others who do "get it" and understand that it's NOT supply an demand.
Bill O'Reilly and his team have been investigating the oil companies because as he says it, they're GOUGING Americans. Yesterday he said, after lots and lots of investigation and talking to all kinds of people in the industry, they have been unable to determine who actually sets the price per gallon at the pump.
The oil industry has complete and utter control over their industry and its pricing. The government has allowed them to get to this point.
Ever wonder why four gas stations on four corners of an intersection all charge the same amount for their gas? Ever wonder why those prices aren't any lower (due to the "competition") than other stations in the area?
Availability? There's plenty of oil available but there's an issue with refining the oil. There aren't enough refineries. So who controls how many refineries there are? The oil companies of course. Think about how refineries are continually being taken out of service for "maintenance." The do it because they can - because the oil companies learned years ago that if they squeeze the availability themselves they can raise their prices - that's total control.
Profit? Do you wonder how oil companies are able to have record, obscene and GROWING profits quarter after quarter? Their shareholders' demand for growing profits every quarter means we're on a death spiral.
Pricing? Why have gas prices been high since BEFORE Katrina and while the price of a barrel of crude has dropped appreciably, the price of a gallon of gas has remained virtually unchanged?
We're getting screwed every day, gallon by gallon.

[BBTAHITI]

******REPOST from the last gas thread******
The oil companies not only invented the game, they have perfected it (with a little govt help). Oil prices are not driven by demand, they're driven by futures. Reduce production to generate a "shortage" and it appears demand is high. Since the oil industry works on LIFO (principle), the higher the price, the greater the profit. China didn't create the obscene profits for US oil companies. Face it people, we're being played..... and our elected officials are the (blindfolded) referees. It's time for regulation..... can you think of a BIGGER national security threat than higher (manipulated) prices driving us into a recession? Remember, when the govt tells you there's little inflation, they use CORE inflation figures (less energy). My bank acct doesn't work off core inflation.....
Sorry for reposting it, cut and paste was easier.... :D