Gas Prices and Profits

[BlueHaya]

Shell profits soar by 49% - Yahoo! News


ok, ...so why are gas prices so high?

This profit is " driven by higher energy prices". While people are loosing jobs and income, these guys are raising production and prices and reaping more $$$$$.

Hopefully soon we get real cars that repel the effect of high gas prices.

 

[Scar]

Here's something that'll choke you:

I pay $3.01 for Wasabi's premium unleaded here in AZ.

At a gas station in CA, last weekend, I paid $3.59.

I always 'fill up' in Yuma.

Greedy bastids.

 

[Blanca BusaLess]

Here's something that'll choke you:

I pay $3.01 for Wasabi's premium unleaded here in AZ.

At a gas station in CA, last weekend, I paid $3.59.

I always 'fill up' in Yuma.

Greedy bastids.

I can get almost that kind of diff within 30 miles.
Around the corner its 3.31.
By the lake its 3.07
Out in Wellington where all the million dollar homes and escalades are its 3.43.

It pays to know where the cheap gas is for sure.

 

[theskaz]

This morning....I fill up every day.

 

[Vonderbach]

The problem here is that the story neglects to tell us if their margins changed. I doubt they changed their margins to achieve that profitability. Any time the cost of goods increases, a fixed margin will increase the amount of net profit.

For example

Crude cost of $1,000,000 @ 10% margin = $111,111 profit
Crude cost of $2,000,000 @ 10% margin = $222,222 profit

Same profit margin reaps twice the return when costs double, and that's failing to account for their increased production. So from the layman's perspective it appears that this company is making twice the profit when in reality their margins never changed. Margins are the lifeblood of a company and on the average should never go down.

 

[Blanca BusaLess]

This morning....I fill up every day.
View attachment 185581

Wow Skaz good to the last drop , huh ?
5.5 gallons ?

Must have been fumes in there when you stopped.

I always fill up as soon as light comes on which is about 4 gallons.

 

[theskaz]

Wow Skaz good to the last drop , huh ?
5.5 gallons ?

Must have been fumes in there when you stopped.

I always fill up as soon as light comes on which is about 4 gallons.

yeah i was pushing it a little. If i filled up when the light comes up i would be filling up 3 times in a 48 hours time span.

 

[MET]

Yes it is greed, but consider that our government wants to put on another 10 cents of tax on a gallon. That is on top of .21 fed tax now and an average of .22 in states. All to pay for things most people do not even want.

 

[Vonderbach]

Yes it is greed, but consider that our government wants to put on another 10 cents of tax on a gallon. That is on top of .21 fed tax now and an average of .22 in states. All to pay for things most people do not even want.

How is it greed? "If" the margins don't change, how can this be considered a greedy proposition?

 

[BlueHaya]

How is it greed? "If" the margins don't change, how can this be considered a greedy proposition?

do you think consumption changed?


"Chief executive officer Peter Voser said the improved performance reflected higher prices and output."
I dont think it cost them more..so with higher prices, which is usually driven by supply/demand, the had better margins since they upped output as well.

 

[det45]

What really sucks is we are getting shafted without even a courtesy reach-around.

 

[MO-BUSA]

in the past couple of days here in the midwest gas has rose almost 30cents we are not quite to the 3 dollar range yet but getting close premium was 2.92

 

[zellabusa]

The Obama cartel is obviously in bed with the Saudi's. This is all a plan to make him and his cronies super rich!

 

[busarocket]

Have to keep the shareholders happy, don't they.:angry::angry::angry::angry:

 

[Vonderbach]

do you think consumption changed?

I suspect it had to, otherwise how would you justify increasing production?

"Chief executive officer Peter Voser said the improved performance reflected higher prices and output."
I dont think it cost them more..so with higher prices, which is usually driven by supply/demand, the had better margins since they upped output as well.

The cost of a barrel of oil has been increasing for a while now. I think it's fair to say that the cost has increased. If they increased their margins (an unknown) then I would agree that it is greedy. However, based on rising oil costs and increased production, I would have to assume that this is a simple case of increased costs = increased profits due to mathematics of margins.

 

[BlueHaya]

I suspect it had to, otherwise how would you justify increasing production?


The cost of a barrel of oil has been increasing for a while now. I think it's fair to say that the cost has increased. If they increased their margins (an unknown) then I would agree that it is greedy. However, based on rising oil costs and increased production, I would have to assume that this is a simple case of increased costs = increased profits due to mathematics of margins.

Think in terms of mining for gold or silver. They do more of it when the price is higher...so the profit is higher

 

[GSXRFANN]

Bottom line is that when gas goes up, the economy goes to crap!

 

[Vonderbach]

Think in terms of mining for gold or silver. They do more of it when the price is higher...so the profit is higher

I see where you're going, but oil has forecastable consumption rate. Simply producing more does not create more demand, in fact, it lowers prices if the oil is refined into gasoline. Precious metals have an infinite consumption (i.e. trading) since it can be transferred to multiple owners without any overhead costs and no depletion of the core product. The demand for precious metals also far outweighs the true demand, only cost prohibits more consumption. Oil on the other hand is a necessity which requires X amount of consumption, again a forecastable useage.

I still have to insist that even though production has increased, the margin likely is unchanged. If the margin does not increase, I can't consider calling them greedy. I they have increased margins, I would absolutely join you in your assertion, no doubt about it.

 

[smac]

Keep in mind the oil companies make an average of $.12 per gallon for reg unleaded where as the government makes an average of $.45 per gallon. The government does not have to explore, refine, transport or anything, just collect the revenue, so who is really ripping us off ??? ???

 

[BlueHaya]

I see where you're going, but oil has forecastable consumption rate. Simply producing more does not create more demand, in fact, it lowers prices if the oil is refined into gasoline. Precious metals have an infinite consumption (i.e. trading) since it can be transferred to multiple owners without any overhead costs and no depletion of the core product. The demand for precious metals also far outweighs the true demand, only cost prohibits more consumption. Oil on the other hand is a necessity which requires X amount of consumption, again a forecastable useage.

I still have to insist that even though production has increased, the margin likely is unchanged. If the margin does not increase, I can't consider calling them greedy. I they have increased margins, I would absolutely join you in your assertion, no doubt about it.

I wonder what % production or demand would have to increase to realize a 49% increase in profits.

10-14-09 oil was 81.19 a barrel...wholesale unleaded was 1.92 a gallon
11-4-10 oil was 80.40 a barrel..wholesale unleaded was 2.01 a gallon
3-10-10 oil was 81.77 a barrel...wholesale unleaded was 2.29 a gallon


some crazy numbers.....
6-28-08 oil was 140.21 a barrel...wholesale unleaded was 3.5 a gallon.


I have a spreadsheet I keep up with wholesale oil/gas and my local stations prices...call me crazy