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Old 12-10-2008, 04:32 AM   #1
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I bet my wife we would never see gas prices below $1/G again. gas prices by zip. Why hasn't diesel followed? EPS says it costs 4-5 cents more to produce ULSD, so why is diesel over $1 higher?
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Old 12-10-2008, 04:32 AM   #2
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I bet my wife we would never see gas prices below $1/G again. gas prices by zip. Why hasn't diesel followed? EPS says it costs 4-5 cents more to produce ULSD, so why is diesel over $1 higher?
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Old 12-10-2008, 05:08 AM   #3
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heating fuel and a colder than expected winter?
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Old 12-10-2008, 05:52 AM   #4
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I like the lower gas/fuel prices. They have been caused by, what I'll call, the collapse of the US economy.

If other consumer goods see a likewise downturn in their prices the US economy could enter a period of deflation.

Deflation is a very, very serious economic condition. The US dollar would collapse as the German mark did after WWII.

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Old 12-10-2008, 07:00 AM   #5
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The price of diesel is determined solely by demand and has nothing to do with the costs to produce it. There remains more world-wide demand for diesel, therefore it is higher priced.

The prices of many things are controlled. Take, for example, Maytag appliances. We recently bought a Maytag gas range. It was exactly the same price in every store. Why? Because Maytag specifically controls the price that stores can sell to the consumer. A story was told to me about a large chain retailer who allowed customers a small discount on Maytag appliances if the consumers paid for them with a new credit card from that retailer. A complaint was filed by a competitive store about that discount. As a result, Maytag removed all of their appliances from the first retailer's floorspace and refused to allow that retailer to sell any Maytag appliances for 30 days. Microsoft used a similar technique to prevent PC makers from installing any other operating systems on their PCs coming from the factories

Anyone who thinks that we were dealing with a "free market economy" needs only to look around. One of the things that is clear from the economic crises is that some organizations (AIG) are too big to even be managed by their own management teams. I do realize that in the petroleum industry, many of the companies are owned by country governments (Mexico and Venezuela for examples) and that American companies had to be large enough to deal with those. IMHO, however, the industry has not been the same since the Exxon/Mobil merger and the price of diesel seems to be one of the casualties of that. When we bought our RV 5 years ago, the price of diesel was only higher than gas in the winter time and then only for a brief period. I don't remember that the oil companies were loosing money then.
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Old 12-11-2008, 09:24 AM   #6
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"so why is diesel over $1 higher?"

Fuel oil is obtained in the same process. More is needed due to global warming. Seems there is 1" of snow on the ground in New Orleans, LA as a result.
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Old 12-11-2008, 09:26 AM   #7
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"Because Maytag specifically controls the price that stores can sell to the consumer."

That is called price fixing and is specifically forbidden by law. Don't happen.
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Old 12-11-2008, 10:35 AM   #8
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by chasfm11:
The prices of many things are controlled. Take, for example, Maytag appliances. We recently bought a Maytag gas range. It was exactly the same price in every store. Why? Because Maytag specifically controls the price that stores can sell to the consumer. : </div></BLOCKQUOTE>

Sorry but that is called "price fixing" and that my friend is illegal. A company can have a suggestive retail price, but it CAN NOT make you sale it at that price. There have been court cases over this. I own a retail store and while my suppliers have a suggestive retail price, I'm free to sell it at whatever price I choose. Now that being said, if you have a product that sales well you'd be stupid to sell it at less than the suggective price.
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Old 12-11-2008, 11:07 AM   #9
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by lawdude:
"so why is diesel over $1 higher?"

Fuel oil is obtained in the same process. More is needed due to global warming. Seems there is 1" of snow on the ground in New Orleans, LA as a result. </div></BLOCKQUOTE>

Because we the consumer will pay it...Plain and simple. Diesel is a by product of the refining of gas and 20 years ago we use to pour it on dirt road to keep the dust down.
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Old 12-11-2008, 05:13 PM   #10
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Easy Answer: The oil companies finally figured out the country runs on diesel fuel. Shut down the trucking industry and rail roads and what happens, we go hungry. The oil companies see this as their opportunity to make a profit.
They tried it with gasoline and you have the results of $4.00 gas now as business couldn't pass this much increase onto us and the economey went down quickly.
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Old 12-13-2008, 04:31 AM   #11
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Well its over, Calif is saying prices raising again by monday by 14 cents a gallon and will continue until they reach in the 3.00 range. I hope that is only in Calif.
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Old 12-13-2008, 05:07 AM   #12
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Deflation is a very, very serious economic condition. The US dollar would collapse as the German mark did after WWII. </div></BLOCKQUOTE>


Do you not have to have dollars , for it be worth anything? Collaspe? Wanna balance my checkboot? E a s y ....... all zeros!
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Old 12-13-2008, 05:55 AM   #13
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cb5300 said
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"> Sorry but that is called "price fixing" and that my friend is illega </div></BLOCKQUOTE>

There, unfortunately, are a lot of things that happen and some of them are illegal. Tell you what: try to buy and iPod classic and, for the same harddrive sized models, be sure and let me know how many different prices you come up with, on line and in the stores. I can assure you that there is a lot more variation in the price per gallon of diesel across the country. Do you think, in these hard times for retail, that the lack of price fluctuation of the iPod is set by what the consumer will bear or all of the retailers just selling at the suggested retail price? Did you ever wonder why none of the major PC retailers sold anything but the Windows operating system? I know: it was because the quality of Windows was so much better than anything else! (Not!) Sorry, but the price of many "commodities" can be manipulated in many ways, some of them by the manufacturers and creators and some by others later in the food chain.

The reason given for the run-up in fuel prices this past Spring and Summer was increased demand from emerging economies. OK, I buy it. Now, the US economy suddenly cratered, due at least in part to that run up in fuel prices (it is not an accident that mortgage payment defaults became much worse at the height of fuel price run up)and suddenly the price of fuel has plummeted. That is because the emerging economies suddenly quit their demand, right? Did the mortgage crises accomplish what the high cost of fuel couldn't - to lower fuel demand in the US? Why aren't China and India still buying as much fuel and keeping the price higher? Pardon me if I'm more than a bit suspicious.
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Old 12-13-2008, 07:41 AM   #14
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by chasfm11:
Why aren't China and India still buying as much fuel and keeping the price higher? Pardon me if I'm more than a bit suspicious. </div></BLOCKQUOTE>
One needs to consider global demand. The current recession reaches beyond the coasts of the U.S., so global demand has dropped. That's why OPEC (which is an entirely different entity from the major oil companies) is cutting production - to try to reduce supply to match demand and thus prop up crude oil prices.

By the way, today's low energy prices are a mixed blessing. Energy companies had increased budgets and spending on exploration, capacity increase, etc. projects while prices were high. Guess what's happening now? Drilling rigs are being stacked (i.e., shut down). Refinery and pipeline capacity expansion projects are being deferred or cancelled. So, what will happen to prices when the economy recovers and demand increases? It's not going to be pretty, I assure you.

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