Overall, gas has dropped over sixty cents since I originally posted this, with no sign of slowing up.
Why is it when oil goes up they adjust the price of gas up just about every hour but when the price goes down it can take days or even weeks to lower the gas prices?
Same, no clue, though it's combination of bike and transit. Maybe I should fill up my lawn mower or something.
Oh God it's so cheap. I just bought ten Gallons and dumped them down the drain for fun. I like the smell.
@Nautica, it must have gotten eighty-sixed during the smiley clean-up. I honestly can't remember what it was, though.
As I understand it, it's in part because of a tax ratchet. If you have a big tank field and the world price goes up, the value of your inventory is hit with a capital gains tax, so your selling price has to respond immediately, even though you didn't actually pay the new price for what is in your inventory. You could also just turn around and sell your inventory on the world market, so the consumer has to compete directly with other wholesalers, buyers, and markets to keep your gas going to them. So price increases are virtually instant. Price decreases, on the other hand, means you face a loss on what's in your tanks. You bought high and don't want to sell low. You can replace what's in your tanks at the new lower world price, but first you have to get rid of what's in your tanks, and you do that by passing the higher-priced gas along before other suppliers have time to undercut you, and the other suppliers are in the same boat so it will take them a while to run out their older inventory, too.
That is far too complicated to be reality and reality has next to nothing to do with taxes, my poor daft boy. The reason it goes up so quickly is because they make more profit that way; the reason it goes down so slowly is because they make more profit that way. This isn't rocket science, jr.
Yes, it's all a conspiracy that can't be broken by a company trying to expand market share, because expanding market share would be wrong.
Did some driving today, noted prices for a gallon of regular ranging from as high as $2.95, down to $2.39.
There is very, very, very little competition in the refining business, my ignorant friend. Most of the same and medium sized refineries got bought up by the big boys in the 80s and 90's and now most of the independent t nonbranded gas stations are gone too because the big boys only sell to you if you sign long term exclusive supplier contracts. Each region only has 1-3 companies which supply the vast, vast bulk of the fuel to that region. So why don't you look up the term "oliogopoly market structure" and get back to us? My point being that market competition is vastly, vastly reduced with so few players. That is the cliff notes version since you probably won't bother looking anything up.
And back when the market was very wide and diverse - gas prices shot up quickly and came down slowly. For example, you buy 10,000 barrels of oil at $20 a barrel and put it on a ship, because your ship holds 10,000 barrels of oil. From this you expect to make a small profit (ignoring contracts and whatnot). By the time you arrive at the destination, the oil price has risen to $40 a barrel. So you stand to double your money, or you could sell the oil at the original $20 price, because you're such a nice guy. But if you did that, you wouldn't lose any money, but then you'd only have enough money to fill your ship halfway up with the next load of oil, because it costs twice as much as what you'd sold the previous shipment for. So your asking price jumps up in sync with the supplier's selling price, otherwise you'll have to cut your volume in half. In contrast, if the price dropped in half while you were sailing across the ocean, you arrive in port and try to minimize your loss by holding out for the original price you paid. Your customers might point out that they can arrange to buy cheaper oil now. You reply "Yeah, but that oil is going to take two or three weeks to arrive, and you need oil now." All the ships are in the same situation, so although their next delivery might be cheaper, what's in transit is only going to drop slowly based on the immediate supply and demand.
No, back when there was more competition prices actually adjusted more quickly due to more intense competition. Competition is a good thing but we have allowed a whole lot of corporate take overs and buy outs which should have been disallowed on anti trust grounds. Left to their own devices industries will consolidate down into monopolies or duopolies because that maximizes their profits. This is an excellent example of where the government SHOULD intervine in order to maintain a functioning market economy.
Yeah, we're down to Exxon, Shell, BP, Chevron, Conoco, Valero, Total, Marthon, Sunoco, Teseco, Hess, Murphy, and about 150 others.
You are an extremedy ignorant man. Do you even know the difference between a refiner and a retail brand chain?
Break it down be region, bright boy, and by volume so we can all see how each region is dominated by a few players. Since you are an ignorant rube I won't even bother asking you about what impact, hint it is virtually negligent, minor players have on pricing power or upon competitive pressure. Take some MBA classes, junior.
My state has two refineries. Alaska and Ohio have five. Texas, New Jersey, Louisiana, and many other state have a shit ton. Quit embarrassing yourself, you ignorant moron (invective thrown in fee of charge, though I usually don't go there unless you pay me). ISIS was building refineries on the fly back when the Syrian revolution was just starting up. Some of them could fit in your garage. It's not rocket science, it's moonshining. You heat the oil and distill it. Any fucking moron, including ISIS morons, can do it well enough to put the end product in a Ford, Chevy, or Toyota. The only question is market share, and about 140 refineries in the US market are all looking to increase share. You probably thought we were down to five or something.
And if you weren't a drooling idiot you'd notice that many of those refineries are owned by the same people or at least the same group of people.
Man, Oerdin Classic has come out for a spin! Saddle up bitches we look to be a few posts from another flamout!