I would like for someone such as a gasoline distributor or wholesaler to explain the increase in gas prices again. After the ordeal we all endured last year, when the oil price skyrocketed, we finally got some relief.
Well, I checked this morning and the crude barrel price was hovering just above $40. Yesterday, retail prices at two Shell stations here on Signal Mountain went up 10 cents in one day.
We dropped to a low of $1.399 and now as I type it is $183.9.
I grew up in the gasoline business. My father was an Exxon distributor from 1956 to 1982. I witnessed first hand the shortage of 73' with the lines and all the fighting. Prices to my dad back then were set by Exxon. We went out weekly and wrote down the prices of all three grades at the 120+ stations in Maryville, Tn. at that time. The prices were sent to Exxon and, if needed, they would cut their prices so dad could be more competitive. Dad would set his wholesale price and that would give the stations the ability to get down to the cut-rate prices without wiping themselves out.
With the crude price where it is, someone out there is racking up some profits. What is the procedure today?
Mitchell Thurmer
Signal Mountain
mthurmer4300@comcast.net
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First - the steelworkers are threatening to strike. This would effect almost 65,000 workers and probably shutter 10 to 15 refineries all across the country, but mostly in Texas.
Therefore, speculators are slightly driving up gas futures (why oil futures haven't necessarily rocketed is because it's in the end stage. Side note - this is also the part where the oil companies stick it to the consumer because they charge "fees" and processing charges through subsidiaries. They can then claim they are not directly jacking up prices to the consumer in the end stage.
Second - oil company executives are not idiots. They realize that demand has fallen for gasoline. (I believe I saw a note the other day that it was the largest one-year drop since the mid-70s.) Using the law of supply and demand, they have cut the level of supply to keep the price at a higher level, so that they can keep their own bottom line in check. This follows a similar strategy to what OPEC was trying to do last month with raising prices for crude by cutting production.
Why we keep subsidies going to these guys, I will never be able to figure out. Hopefully, Congress will do something about it soon, although with the enormous power their lobbyists yield, I wouldn't hold my breath. Their lobbyists and lawyers have shouted down FASB on several occasions, so they have a mighty big stick that they like to swing.
Kenneth Nelson
Chattanooga
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The issue with gas prices is an easy one and can be explained in one word, greed.
Patrick McBride
East Ridge