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elray
join:2000-12-16
Santa Monica, CA

elray to jazzlady

Member

to jazzlady

Re: Day 5, no power

said by jazzlady:

said by djdanska:

The oil companies are rich enough, but our station was not owned by any oil company. We get the majority of our profits from people buying stuff inside. Not the gas. Can't afford it.

Your situation may be different, but I would think that for 90+% of gas stations around the country- they're company owned.

And you'd be 90% wrong. Oil companies mainly extract oil and refine it into dozens of products. They wholesale gasoline and diesel to filling stations - of which they own about 4% nationwide.

There is no significant profit margin in retail gasoline sales - the money is made in the convenience store.

jazzlady
join:2005-08-04
Tannersville, PA

jazzlady

Member

said by elray:

said by jazzlady:

said by djdanska:

The oil companies are rich enough, but our station was not owned by any oil company. We get the majority of our profits from people buying stuff inside. Not the gas. Can't afford it.

Your situation may be different, but I would think that for 90+% of gas stations around the country- they're company owned.

And you'd be 90% wrong. Oil companies mainly extract oil and refine it into dozens of products. They wholesale gasoline and diesel to filling stations - of which they own about 4% nationwide.

There is no significant profit margin in retail gasoline sales - the money is made in the convenience store.

If that's true, then why doesn't it say "Joe's Filling Station" or something like that on the sign instead of BP, Shell, Sunoco, Texaco, etc?

If the oilco's don't own the gas stations what's to stop the real owner from getting his gas from anybody who gives him the best price instead of from a specific oil company?

I'm not trying to be snarky, I'm just asking...
elray
join:2000-12-16
Santa Monica, CA

elray

Member

said by jazzlady:

If that's true, then why doesn't it say "Joe's Filling Station" or something like that on the sign instead of BP, Shell, Sunoco, Texaco, etc?

If the oilco's don't own the gas stations what's to stop the real owner from getting his gas from anybody who gives him the best price instead of from a specific oil company?

I'm not trying to be snarky, I'm just asking...

The Oilcos figured out some time ago that they can make much easier money selling off their gas stations to Joe - or more commonly Yousseff.

Joe is buying a franchise package, agreeing to buy gas from OilCo and enjoying the brand-identity. Consumers tend to believe that OilCo gas is "good" while unbranded gas is ... questionable. Do you drink Coke, or Kroger Cola?

As for the independent gas station owner, indeed, they are free to contract with their own supplier, but that's a short list based on the refiners in the region. They're typically buying unbranded product from OilCo.

It is so easy to demonize the oil companies. But they're just large corporations that fill a large market need - and with all of them publicly traded, if they're truly "gouging" us, if their "record profits" (the result of massive volume and high world oil prices) are "excessive", then you can buy their stock - or in fact, your 401(k), mutual funds, ETFs and pensions already do - and enjoy the dividends.
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer

Premium Member

quote:
It is so easy to demonize the oil companies. But they're just large corporations that fill a large market need - and with all of them publicly traded, if they're truly "gouging" us, if their "record profits" (the result of massive volume and high world oil prices) are "excessive", then you can buy their stock - or in fact, your 401(k), mutual funds, ETFs and pensions already do - and enjoy the dividends.

Wait, so your solution to 'gouging' (or perhaps unneeded tax breaks) is to get on board with the gouging? That is such backward thinking! If your house was on fire would you join in the fun and toss on some gasoline? Broken things should be fixed, not made more broken so they have to be replaced. Your line of thinking is no different than that of people who 'jump aboard' for a free ride via government programs.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

said by CXM_Splicer:

Wait, so your solution to 'gouging' (or perhaps unneeded tax breaks) is to get on board with the gouging? That is such backward thinking! If your house was on fire would you join in the fun and toss on some gasoline? Broken things should be fixed, not made more broken so they have to be replaced. Your line of thinking is no different than that of people who 'jump aboard' for a free ride via government programs.

Can you actually provide evidence of "gouging" ?

Our Congresscritters and states attorneys have been investigating OilCo "gouging" since time began, and have yet to show anything. I'm not saying there isn't room for some price manipulation, but it isn't significant, and that's not gouging.

My "line of thinking" is to recognize the situation for what it is, not what you might want it to be. Oil discovery, extraction, refining and distribution is a large and complex operation, fraught with risk and peril - those who risk their capital aren't going to do it without some potential for profit. In the end, they earn between 9 and 13 percent - in good years.

The "broken" elements of the current production system are minor - 50 blends of gasoline, mid-grade, and issues with permitting of exploration, development, pipelines, emission control, and refinery plant expansion, and should be fixed - but that won't bring about a massive change in the price of gasoline, nor should it.

"Fixing" the problem doesn't involve condemning the very industry that supplies the fuel you desire. Unless we find a way to wean ourselves off of petrol on a massive scale, we will need the oil industry to continue to produce. And frankly, they will probably still be a part of the production and distribution system long after we use our last drop of gasoline.
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer

Premium Member

said by elray:

Can you actually provide evidence of "gouging" ?

Our Congresscritters and states attorneys have been investigating OilCo "gouging" since time began, and have yet to show anything. I'm not saying there isn't room for some price manipulation, but it isn't significant, and that's not gouging.

My "line of thinking" is to recognize the situation for what it is, not what you might want it to be. Oil discovery, extraction, refining and distribution is a large and complex operation, fraught with risk and peril - those who risk their capital aren't going to do it without some potential for profit. In the end, they earn between 9 and 13 percent - in good years.

The "broken" elements of the current production system are minor - 50 blends of gasoline, mid-grade, and issues with permitting of exploration, development, pipelines, emission control, and refinery plant expansion, and should be fixed - but that won't bring about a massive change in the price of gasoline, nor should it.

"Fixing" the problem doesn't involve condemning the very industry that supplies the fuel you desire. Unless we find a way to wean ourselves off of petrol on a massive scale, we will need the oil industry to continue to produce. And frankly, they will probably still be a part of the production and distribution system long after we use our last drop of gasoline.

No, I wasn't accusing them of gouging (although I will accuse them of receiving subsidies that are better done away with). My post was not really directed at the oil industry, I was simply commenting on the way you recommend dealing with a business that you think is gouging... 'Invest in them!'.

The 'broken' part has nothing to do with the elements of production, it has to do with supporting a business/company that is doing something wrong by buying their stock. You don't jump on the bandwagon to try and recoup some of your gouged money (and maybe get some of your neighbor's gougings), all you are doing is encouraging the bad behavior.

Fixing the system doesn't involve condemning the industry (I agree)... it involves condemning the behavior. When a company is (or even seems to be) engaging in something like gouging, people should start dumping their stock. Unfortunately, we have a system that separates the shareholders from the bad behavior so they can profit from it with impunity; almost no one would dump their stock. Fixing the system means discouraging bad behavior rather than encouraging it.

Your logic sounds like "Hey, if your house was burglarized, just find someone selling 'hot' merchandise so you can replace it more cost effectively."