The last time gas prices shot up the reason given was activity in Iran and Nigeria.
I have been admiring the KWIK FILL commercials lately because they explain that their fuel is 100% North American.
Why did KWIK FILL prices jump with the rest of them if they don’t get or refine fuel in Iran or Nigeria?
OK I know why but, I want to hear KWIK FILL’s explaination for this.
(Just an observation I made.)
the one on Bowen and Broadway in Lancaster is always like 10 cents cheaper than anyone
They should be more like 30 cents cheaper though.
i know but 10 is greater than the same as everyone…now if i just lived over there to go there it would be great
ooo. good thought.
Because regardless of where they get it, the price is set as a commodity, freely traded on the market. Which is the exact reason retarded ideas like “don’t buy gas from Mobil” will never work.
:word: crude oil is sold at one standard price, delivered to the Henry Hub in New Orleans, no matter where it came from. if all the cows in europe get mad cow disease and die, american beef still goes up in price
Are you sure about that?
What you are saying is the oil is shipped from Canada to N.O. sold, and shipped back to pennsylvania to KWIK FILL.
The simplified version, removing the whole commodities exchange thing, is supply and demand.
I sell widgets that are produced in Buffalo NY. My competitor sells widgets that are produced in Rochester. We both sell as many as we can make and sell them for the same price because we agreed that a price war would be bad for both of us.
Tomorrow Hillary Clinton starts her diabolical takeover of the free world and enslaves Rochester. She gives my competitor the choice of death, or stop making widgets and start making “Hillary 2008” bumper stickers.
So now I still have the same quantity of widget coming out my factory door, but twice the demand. I’m still making them in Buffalo, Hillary has yet to expand her invasion, so there is nothing directly causing my price to go up. But since demand is that much higher, the price is going to go up.
Believe me I understand supply and demand.
I said in my original post that I knew why KWIK FILL prices went up.
The whole point of this thread was to make people think about the situation.
Yep, I knew you understood it knowing that you run a manufacturing business. So in you quest to have people think about it, are you implying that KWIK FILL should continue selling at the same price even with the problems in Iran/Nigeria?
I did not intend to imply that, really my intention was just to make people aware of the situation.
Everyone knows I am not against profit, this was just an observation I made and I was sharing it.
KWIK FILL should be rolling in the dough right now.
Here is another fact I recently learned, BANKS HAVE MADE HIGHER PROFITS IN RECENT YEARS THAN THE OIL INDUSTRY.
I know I saw this on NBC, CBS, or ABC, I just can’t remember which one.:smash2:
IIRC oil companies have made approximately 8-10% and banks have made 10%+
I don’t mean to imply my opinion on this either but it is an interesting fact.
Do you really think they’re making any more money than the station selling gasoline that came from Iran/Nigeria oil though? Kwik Fill’s gas still came from oil, and that oil cost the same if it came from the US or Canada since the demand for oil stayed the same while the supply went down because of Nigeria.
The one that bothers me is the price of oil going up because something MIGHT happen in Iran. The supply is the same, the demand is the same, but the potential supply might change so the price goes up instantly? But that’s where oil being traded as a commodity comes in and makes it much more complicated than what I learned about in Econ 201 and 205. 
EDIT:
As for the banks, I work for a company that writes credit union software, so I hear about how crooked the big banks are all the time from credit union managers.
How about this?
When gas was $1.50 what was the price of a barrel of oil? Maybe 50 bucks or so?
Now that a barrel is $70 (an increase of 29%) why is gas $3.00? (an increase of 50%) The gas doesn’t cost any more to refine. The process hasn’t changed. Why does the price at the pump go up exponentially?
When gas was $1.50 the refineries were running at 100%. They’re only just now getting back up in the mid 80% range after the hurricanes. Subtract more from the supply side.
When gas was $1.50 we were still putting MTBE in it as an additive. That’s been outlawed, with no phase in period, so the conversion to ethanol as an additive is not going smoothly. Subtract more from the supply side.
When gas was $1.50, Nigeria was cranking out oil at 100% and had a stable government. Nigeria is especially important to gasoline prices because they export a special light crude that is perfect to turning into gasoline. So the terrorists attacks in Nigeria have an exponential effect on the price of gasoline compared to the price per barrel of crude.
EDIT: I know it sucks when there is no big bad wolf to blame, because it makes fixing the problem much harder, but in this case it’s fact.
Commodities are definately a little more difficult to understand because the tangible inventory changes value all the time.
If you go to the local hardware store and they have ten bolts in stock they base the price on what they paid for those ten bolts, not what the cost is to replace them.
Alcoa just announced that any orders for aluminum after 5-12-2006 will cost 19 cents/lb more.
Suppliers have millions of lbs in stock that they paid a lower price for but they raise their price immediately.
Theoretically if the price drops they lower their price immediately.(yeah, right)
Yeah, like when the price of oil goes up and the price at the pump goes up the same day, but when the price of oil goes down it takes weeks for the price at the pump to go down?
Exactly.
consequences of LIFO accounting. You’re not paying for the gas in the pump, you’re paying for the next time they have to fill their tanks.