**** Gas Prices, they keep going up and there appears to be no end in sight. We are being RIPOFF?

These prices are out of CONTROL. Someone needs to TAKE some action. Why aren't the government doing anything about these prices?

WHY ARE GAS PRICES HIGH AND RISING?

Being systematic, here are the primary reasons for the rise in gasoline prices in March 2004:

1. High world crude oil prices. These prices are partly the consequence of conscious OPEC supply constriction to raise price. OPEC’s ability to do so is typically constrained by three interrelated factors: the world demand for oil, cheating on the part of smaller OPEC members, and production from non-OPEC countries like Russia, Norway and Mexico. Economic growth, particularly in Asia, is shifting out the demand for oil according to this Ft. Worth Star-Telegram article:

Strong demand for oil in Asia is one reason for higher crude prices in recent months, although analysts also said that aggressive bets by large commodity speculators have contributed to the recent run-up in oil markets. Much of the attention on Asian oil supplies is related to the fast-growing economies of China and India.

Sales of diesel fuel in India, which account for about 40 percent of the oil sold in that country, soared 10 percent in February from the same month a year earlier; automobile sales in India grew 31 percent in the last year. India's oil imports are forecast to continue to climb as its economy grows 8 percent this year.

This Investor’s Business Daily article points to the other two aspects of this dynamic: Saudi Arabia is still the “swing producer” because of the scale of its reserves relative to other producers, and some OPEC members have not curtailed production to meet the targets OPEC set in their 1 February meeting. Saudi Arabia’s production is the primary determininant of the world price, and with rising demand the growth in production in Russia and in Iraq has not been sufficient to change that fact. And small OPEC producers are riding the crest of this high price, not restricting their output.

No current discussion of OPEC is complete without reference to the horrendous state of affairs in Venezuela. Their low production adds substantially to the high prices we are currently experiencing.

OPEC is currently discussing whether or not to continue its output restrictions at the end of the month, and today’s news suggests that they are fighting internal battles over whether to pursue output restrictions when their benchmark price is $4 above the high end of their usual benchmark range.

2. Existing environmental regulations making supply more inelastic. Petroleum refiners in the US must meet the EPA’s federal fuel oxygenate requirement from Title II of the Clean Air Act Amendments of 1990, which mandates a 2% oxygen content in fuel in ozone non-attainment urban areas. Furthermore, refiners are required to drain all of the winter fuel from their tanks before replacing it with summer fuel, which in most markets must have inventory built up to start sales on 1 April. On top of that, states can choose to implement their own fuel formulation requirements to address their specific geographic and climatologic conditions that lead to different local air quality conditions. As a result, the US now has over 40 fuel formulation requirements at different times and places.

Think about what this does physically and economically. People continue driving in March, and continue to use winter-blend fuel while the inventory of winter-blend fuel falls, ideally to zero at midnight on 31 March. Inventory storage costs are very high for petroleum, so keeping a buffer of winter fuel through March and over the summer is very expensive (this point is in response to a question from Virginia Postrel on storage). Not only do people generally not want new refineries built near them, they also do not want new tank farms built near them. So storage capacity is a binding constraint.

So of course the seasonal fragmentation that the oxygenate requirement introduces into fuel supply would cause prices to rise in March, all other things equal. This temporal fragmentation exacerbates the balkanization of fuel markets, because of the 40+ fuel formulations in effect. Note especially that this fragmentation across both time and place makes the supply of gasoline more inelastic. Confront that with an inelastic demand for gasoline, and one that shifts out and becomes more inelastic in the spring and summer months, and you have a policy-driven exacerbation of the potential for price spikes.

The California prices are also driven by the switch from MTBE as fuel oxygenate to ethanol, a switch that is taking full effect for the first time in 2004. Ethanol, a corn-based additive, is not produced in California, cannot be shipped from the Midwest to California in oil pipelines, and is highly water soluble, so it can only be added to the fuel at the rack (basically, right before it ships out to gas stations). And Senator Boxer wonders why the price of gasoline in California has gone up to $2.18/gallon? I suggest that she review Title II, Section 211 of the Clean Air Act Amendments of 1990. You can also read my testimony to a Congressional hearing on the MTBE/ethanol transition in California from July 2003 for more background.

3. New air quality regulations taking effect in 2004. The EPA’s Tier 2 sulfur control regulations, leading to the co-development of low-sulfur fuels and vehicles optimized to the use of low-sulfur fuel, took effect in January 2004. This program to reduce sulfur content in fuel will be phased in over three years, and 2004 is the first year in which refiners will be required to meet overall sulfur content regulations, according to this EPA fact sheet on the Tier 2 regulations:

Beginning in 2004, the nation’s refiners and importers of gasoline will have the flexibility to manufacture gasoline with a range of sulfur levels as long as all of their production is capped at 300 parts per million (ppm) and their annual corporate average sulfur levels are 120 ppm.

More information on the regulations is available at the EPA OTAG Tier 2 website. The Tier 2 regulations can be found in the Federal Register from 2000.

These new regulations, while likely to deliver improvements in air quality, are going to increase gas prices, at least in the short run. Refiners are having to engage in research, in reconfiguration of their production processes, and in equipment installation to meet the new low-sulfur requirements. For example, Valero is building a new desulfurization unit in one of its Louisiana refineries, precisely to aid compliance with the Tier 2 sulfur regulations.

These factors have combined to raise the current, and expected future, prices of gasoline. The new low-sulfur requirements are not likely to exacerbate the seasonality/inelasticity problem, but they will increase fuel prices.
Posted by lkiesling at March 23, 2004 10:59 AM
Comments

http://www.knowledgeproblem.com/archives/000748.html

This is all Bull.

Gas prices up 32 cents in past month

By E-R and AP Staff Reports

The cost of fuel increased dramatically in the last month, according to AAA of Northern California, which tracks gas prices.

The statewide average cost of a gallon of regular unleaded gasoline in California rose to $2.63 per gallon, up 32 cents a gallon since March 15.

Chico's average price per gallon is $2.52, according to AAA, which is also a rise of 32 cents per gallon in the last month.

In Marysville, gas is going for $2.49 per gallon, the lowest in the state, but still up 29 cents in a month. Redding prices were put at $2.60 per gallon, up 36 cents.

"Prices in many communities have increased by 70 cents a gallon or more since the beginning of the year," said Sean Comey, spokesman for AAA of Northern California.

"The rate of increase has jumped recently, from a penny or so a day to a nickel or more overnight in some cases."

The cost of crude oil, the raw material from which gasoline is made, has been dropping steadily from recent record high prices. Output from California refineries, one key variable that can affect consumer gas prices, is reasonably good, according to the California Energy Commission.

Despite these developments, no relief has trickled down to the gas pumps where most consumers fill their tanks.

The most expensive average gas price in California is in Eureka, where regular unleaded costs $2.82 per gallon.

The nationwide average price is now 36 cents per gallon less than the statewide average in California.

The least-expensive gasoline is found in Monmouth, N.J. where the average price is $2.05 per gallon.

"The outlook appears bleak for the consumer," Comey said. "We're looking at record high prices heading into the time of year when fuel consumption typically increases, which may trigger more price hikes."

AAA's Fuel Gauge Report is a daily survey of more than 85,000 self-serve stations.

http://www.chicoer.com/Stories/0,141...817864,00.html

In response to your question, you must understand just how much tax is incorporated in the price of a gallon of gas. One way for the government to help soften the burden, is to lower the tax, BUT THAT WILL NEVER HAPPEN!!

Also you must understand that the big OIL conglomerates and our government are in bed with one another, scratching one anothers back.

Who do you think is paying for the war in IRAQ?....One sneaky way is At the GASPUMP.

You also must remember one basic principle that all thiefs and crooks in business utilize is this: "GET WHAT THE MARKET WILL BEAR".

The whole bottom line with the oil companies and our overtaxing government
is this: GREED...POWER...and CONTROL.

Don't ever been conned into thinking that our government and the oil companies are concerned with your pocket book. The only concern they have is just how much money they can squeeze out of all of us before we dry up and go away.

Well I hope this was a helpful answer.

These prices are so ridiculous and there seems to be nothing the current administration is doing? Consumers are being gouch. Heaven sick.....

Brace yourself... Triple A of alabama says gas prices increased again overnight.

The auto clubs's daily fuel gauge report shows prices for all grades were up about four cents. The average for regular unleaded now stands at two-44. The most expensive gas in our state is in Birmingham. The cheapest... in tuscaloosa.

Residents at a local gas station give their thoughts about gasoline prices.Gas is one price minutes later the prices jump up 5 cents a gallon. It's enough to make those who drive larger vehicles re-think what they drive Camp Hill Resident, Bob Swantes,says,"I am looking obviously to get a hybrid of some sort." Mobile resident, Rich Manstiel, says "actually my wife's car has got a lot of miles on it and we're looking for a new car right now. We're pretty seriously considering a hybrid." Bob and Rich pay top dollar for their gas, but there are people who evidently don't feel they have to follow the same rules. Entec gas station manager, Mickey Rudolph, says, "I guess that they're thinking that since the gas prices are going up that they feel like they don't have to pay, and whether they know it or not it comes out of my pocket." As long as the dark clouds hover over the price at the pumps, and no good news on the horizon, people will be forced to dig a little deeper into their wallets.

http://www.wsfa.com/Global/story.asp?S=3730562

A Record Week for Gas Price Increases

By Joe Benton
ConsumerAffairs.Com

August 19, 2005
Gas prices had a record week, setting a new price record almost every day. Drivers around the country are now paying an average of $2.60 for a gallon of regular unleaded gasoline and in some areas of the country the price is pushing $3.50 a gallon.

The $2.60 a gallon average is up 8 cents over four days and marks a new record according to AAA. One year ago, the average price stood at $1.87. The difference is 73 cents.

A barrel of crude oil for future delivery was trading at $64.30 by week's end.

The nation's cheapest gasoline can be found in Monroe City, Mo., at $2.09 a gallon. Some folks in Long Beach, Calif., are paying $3.49.

Here’s a look at prices around the country:

Oregon: Gas prices across the state rose by nine cents over during the week, to hit an average of $2.60 a gallon. Analysts are now wondering whether prices in the state might hit $3 before the end of the year.

Statewide, gas prices are highest in the Medford-Ashland area, where a gallon of gas now averages $2.74. In Portland, the average is $2.51; in Eugene, it's $2.60.

Oregon's average gasoline price is 8th highest in the nation.

Memphis: Record high gas prices have drivers shelling out an average of $2.51 a gallon for regular unleaded gasoline.

The high prices at the pump have some people resorting to low tactics to fill up their tanks.

In east Memphis, police say a man who couldn't afford to fill his tank got so irate he assaulted the station attendant and even threatened to kill him. Most station workers say they are getting an earful from angry customers. They warn customers that they don't set the prices.

Texas: Gasoline prices across the state rose by record numbers this week, including in the Houston area, where the average cost for a gallon of self-serve regular shot up by 24 cents.

Prices in Houston averaged $2.56 a gallon, compared to $2.32 the week before. Statewide, the average was $2.54, up from $2.32.

The Galveston-Texas City area saw the biggest jump of 25 cents a gallon to $2.58.

Maui: The price of regular unleaded has already topped $3 a gallon at some stations on Maui.

According to AAA's Daily Fuel Gauge Report, the average price of a gallon of regular on Maui sits at a record $2.97. Hawaii's statewide average also hit a record of $2.76, in Honolulu a record $2.67 and in Hilo a record $2.81.

http://www.consumeraffairs.com/news0..._prices31.html

This site should give you a clue as to the fluctuation in prices.

Weekly U.S. Retail Gasoline Prices, Regular Grade Dollars per gallon, including all taxes

Change from 9/12/2005 9/19/2005 9/26/2005 week ago year ago

US 2.955 2.786 2.803 0.017 0.886
East Coast 3.057 2.857 2.849 -0.008 0.951
New England 3.114 2.912 2.858 -0.054 0.937
Central Atlantic 3.174 2.944 2.884 -0.060 0.961
Lower Atlantic 2.951 2.776 2.819 0.043 0.947
MidAtlantic 2.892 2.676 2.718 0.042 0.812
Gulf Coast 2.810 2.656 2.724 0.068 0.900
Rocky Mountain 2.947 2.873 2.856 -0.017 0.961
West Coast 2.997 2.946 2.927 -0.019 0.861
West Coast Less CA 2.986 2.933 2.893 -0.040 0.876


California 3.004 2.954 2.947 -0.007 0.853
Colorado 2.995 2.885 2.866 -0.019 0.977
Florida 2.942 2.777 2.795 0.018 0.873
Mass 3.121 2.945 2.878 -0.067 0.978
Minnesota 2.746 2.539 2.655 0.116 0.771
New Youk 3.300 3.020 2.942 -0.078 0.937
Ohio 2.901 2.673 2.716 0.043 0.782
Texas 2.843 2.672 2.738 0.066 0.925
Washin 2.940 2.899 2.885 -0.014 0.874

http://www.eia.doe.gov/oil_gas/petro...home_page.html

Weekly U.S. Retail Gasoline Prices, Regular Grade
Dollars per gallon, including all taxes

4/24/2006 5/1/2006 5/8/2006 Change from Change from week ago
Retail Gasoline Prices by Grade by Formulation

East Coast, Regular
Conventional
Date Areas RFG Areas Average

05/08/06 $2.878 $2.962 $2.910
05/01/06 $2.923 $2.968 $2.940
04/24/06 $2.937 $2.951 $2.942
04/17/06 $2.818 $2.774 $2.801
04/10/06 $2.707 $2.661 $2.689
04/03/06 $2.595 $2.558 $2.581
03/27/06 $2.512 $2.471 $2.496
03/20/06 $2.523 $2.456 $2.497

East Coast, Midgrade
Conventional

Date Areas FG Areas Average

05/08/06 $2.969 $3.069 $3.004
05/01/06 $3.015 $3.079 $3.038
04/24/06 $3.031 $3.060 $3.041
04/17/06 $2.911 $2.874 $2.898
04/10/06 $2.803 $2.762 $2.789
04/03/06 $2.687 $2.661 $2.678
03/27/06 $2.604 $2.577 $2.594
03/20/06 $2.615 $2.562 $2.597

East Coast, Premium
Conventional
Date Areas RFG Areas Average

05/08/06 $3.078 $3.173 $3.114
05/01/06 $3.128 $3.180 $3.148
04/24/06 $3.140 $3.163 $3.149
04/17/06 $3.018 $2.964 $2.997
04/10/06 $2.911 $2.852 $2.888
04/03/06 $2.800 $2.750 $2.781
03/27/06 $2.712 $2.664 $2.693
03/20/06 $2.722 $2.653 $2.695

Last Updated 5/8/2006
Retail Gasoline Prices by Grade by Formulation
West Coast less CA, Regular

Conventional
Date Areas RFG Areas Average

05/08/06 $3.081 $3.087 $3.082
05/01/06 $3.009 $2.997 $3.007
04/24/06 $2.901 $2.936 $2.907
04/17/06 $2.749 $2.755 $2.750
04/10/06 $2.654 $2.615 $2.647
04/03/06 $2.563 $2.480 $2.549
03/27/06 $2.524 $2.421 $2.506
03/20/06 $2.479 $2.377 $2.461

West Coast less CA, Midgrade

Conventional
Date Areas RFG Areas Average

05/08/06 $3.196 $3.193 $3.195
05/01/06 $3.121 $3.103 $3.118
04/24/06 $3.005 $3.042 $3.011
04/17/06 $2.806 $2.874 $2.818
04/10/06 $2.770 $2.718 $2.760
04/03/06 $2.680 $2.583 $2.663
03/27/06 $2.644 $2.524 $2.622
03/20/06 $2.595 $2.480 $2.575

West Coast less CA, Premium

Conventional
Date Areas RFG Areas Average

05/08/06 $3.307 $3.299 $3.306
05/01/06 $3.236 $3.209 $3.231
04/24/06 $3.125 $3.148 $3.129
04/17/06 $2.970 $2.952 $2.967
04/10/06 $2.880 $2.821 $2.870
04/03/06 $2.795 $2.686 $2.776
03/27/06 $2.752 $2.628 $2.729
03/20/06 $2.706 $2.583 $2.683
Last Updated 5/8/2006

States
California 3.068 3.202 3.332 0.130 0.816
Colorado 2.825 2.830 2.818 -0.012 0.630
Florida 2.953 2.937 2.893 -0.044 0.665
Massachusetts 2.881 2.900 2.889 -0.011 0.704
Minnesota 2.839 2.758 2.701 -0.057 0.752
New York State 3.077 3.089 3.086 -0.003 0.767
Ohio 2.858 2.806 2.765 -0.041 0.744
Texas 2.886 2.862 2.826 -0.036 0.745

Cities
Boston 2.879 2.896 2.887 -0.009 0.704
Chicago 2.966 2.942 2.913 -0.029 0.708
Cleveland 2.872 2.847 2.792 -0.055 0.771
Denver 2.824 2.824 2.812 -0.012 0.645
Houston 2.885 2.889 2.887 -0.002 0.825
Los Angeles 3.081 3.262 3.428 0.166 0.913
Miami 2.990 2.982 2.976 -0.006 0.666
New York City 2.981 2.991 2.997 0.006 0.775
San Francisco 3.100 3.226 3.334 0.108 0.736
Seattle 2.896 3.001 3.092 0.091 0.631


http://www.eia.doe.gov/oil_gas/petro...home_page.html

__________________

Change from
Change from
3/17/2008 3/24/2008 3/31/2008

week ago

year ago
U.S. 3.284 3.259 3.290 0.031 0.583
Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Delaware, Maryland, D.C, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida 3.253 3.241 3.256 0.015 0.585
Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island 3.208 3.198 3.209 0.011 0.502
New York, New Jersey, Pennsylvania, Delaware, Maryland, D.C. 3.247 3.243 3.258 0.015 0.527
Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida 3.271 3.252 3.268 0.016 0.652
Ohio, Kentucky, Tennessee, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma 3.252 3.192 3.249 0.057 0.635
Alabama, Mississippi, Arkansas, Louisiana, Texas, New Mexico 3.177 3.166 3.206 0.040 0.641
Montana, Wyoming, Colorado, Idaho, Utah 3.178 3.198 3.232 0.034 0.613
Washington, Oregon, California, Nevada, Arizona, Alaska, Hawaii 3.523 3.517 3.523 0.006 0.427
Washington, Oregon, Nevada, Arizona, Alaska, Hawaii 3.382 3.371 3.374 0.003 0.505

Weekly Gas Prices.jpeg

States
California 3.604 3.602 3.608 0.006 0.380
Colorado 3.126 3.139 3.195 0.056 0.577
Florida 3.321 3.307 3.305 -0.002 0.633
Massachusetts 3.116 3.104 3.112 0.008 0.474
Minnesota 3.083 3.043 3.144 0.101 0.604
New York State 3.367 3.369 3.382 0.013 0.502
Ohio 3.321 3.184 3.196 0.012 0.573
Texas 3.169 3.159 3.205 0.046 0.642
Washington 3.511 3.481 3.460 -0.021 0.526

Cities
Boston 3.113 3.102 3.109 0.007 0.478
Chicago 3.378 3.366 3.444 0.078 0.757
Cleveland 3.366 3.236 3.194 -0.042 0.566
Denver 3.114 3.135 3.182 0.047 0.581
Houston 3.162 3.151 3.188 0.037 0.631
Los Angeles 3.593 3.597 3.602 0.005 0.381
Miami 3.392 3.372 3.391 0.019 0.670
New York City 3.209 3.218 3.215 -0.003 0.456
San Francisco 3.663 3.655 3.645 -0.010 0.325
Seattle 3.511 3.486 3.440 -0.046 0.486

__________________