Gas Prices

Imagine if someone could provide a graph that was a timeline with fuel prices, world events and policy decisions that might have impacted those prices.....  imagine.  I've seen such graphs but dare not post them here.  

If you can't openly discuss a problem and discuss all causes, solutions are impossible.  

FYI, I worked in this business 11 years.  OPEC has never set prices.  They set production goals and quotas for member countries.  The member countries often overproduce to gain market share.  

Speculation is driven by markets and traders and has little to do with oil production.  
 

Oil production has real costs and in some parts of the world it is quite high (technology) and in others it is laughably low.  Policy decisions can aggravate this situation significantly.

And like all business there are real labor shortages all around making things, getting them to market etc.  At this price anyone who can produce oil would love to be able to get it to market.  What could be preventing that?  

Enjoy the ride; it likely gets way bumpier.  

Forum rules vs. those charts you speak of be all like...

Read somewhere that the 2008 price adjusted for inflation now would be 5.49 so buckle up.  We just bought a fugly gen 2 prius for 3 grand and it is now the primary car.  So far the thing is averaging 45 mpg, perfect for running errands.  

Read somewhere else that there are 2 major causes, boycotting Russian oil worldwide and limited refinery capacity.  Minor cause added to that is it always goes up for the summer.  So tired of the limited capacity thing, oil companies have used this for a long time.  Cheaper to run the current ones at 100% and screw the consumer than build a new one that could run at 80% and keep up.  Then they take the profits and buy back stock to keep their shareholders happy.  I would love to see them hit with a 90% windfall tax on profits over a 5 year historical average.  And then give this money back to consumers.  And since I am dreaming I would also like to see the US not export any oil and fix the price for domestic use.  I know, it flies in the face of our capitalistic system, but after getting screwed by this stuff since the 70s I would like to see some sort of change.  Some commodities just need to be regulated.

Congrats on the Prius purchase.  Yeah, you already bought but you still might benefit from The Gen2 Prius buyers guide

In reply to porschenut :

If it is any "consolation" the electric market is the same way.  Instead of having ten power plants running at 80% capacity there are eight running at 100%.  It is more profitable that way.  Plus like we saw in Texas, they actually get paid more when a plant goes down pulling capacity down.  Positive incentive to not treat uptime as mandatory.

John Welsh said:

Congrats on the Prius purchase.  Yeah, you already bought but you still might benefit from The Gen2 Prius buyers guide

Thanks, already read it.  Recommended gen 2 cars to them when I got tired of fixing their subarus.  It was only a matter of time for me.

I have read about refining capacity being an issue also, but I think that has more to do with the increases last year (re-ramping up production).   Looking into current capacity, it looks scary.  Wow 91% capacity.

Until you look at the historical trend, and it looks like 90% is pretty much the average use.  So, there may be some other reason, but basic capacity does not seem to be it, based on this info.

Regarding OPEC:  I don't think anyone is saying OPEC is setting prices, but they sure as heck very heavily influence it.  If they want prices to go up, they just cut production (as has been seen, many times).

As stated previously, the current prices are primarily based on supply and demand, and speculation (futures).  US policy is a part of both of those, as is Ukraine (Russia) and OPEC. 

The slight irony about the US position (and suggested one) is that they don't want to produce more, and yet are suggesting taxing profits (locally).  Holding back production is of course anti-competitive (free market) and also makes it far easier for OPEC to keep prices higher (less competition).  Taxing profits is also is anti-competitive and would punish companies for something they have no control of (global prices) and are actively being restrained from helping to solve (local production)!

Would US ramping up production help?  Certainly, but it won't fix supply and demand issues completely (and it would take a while) and won't fix all the speculation issues (though it could help those quickly).  Expensive US production (~$40 / barrel) will always have the worry that OPEC (Saudi ~$12 / barrel) will drive down prices to hurt their business but is also an important reason for OPEC to keep prices lower.  Removing that "threat" give OPEC fewer reasons not to keep prices higher (by keeping production lower, not by setting prices).

I think the best way to state the US position is:  It's part of the problem, it's not all of the problem, but it's certainly not doing what it could do to help the problem.

For reference (this is 2015, so it's a bit low, but relatively it should be the same):

How soon before they start protesting in the US?

https://www.msn.com/en-us/news/world/ecuador-indigenous-groups-protest-high-fuel-prices/ar-AAYpHhD?ocid=entnewsntp&pc=U531&cvid=62c3acdcc3e34a418b8898f6625fea20

In reply to Snowdoggie (Forum Supporter) :

Ecuador would be the place, espcially after the water rights fiasco.

I'm thinking mid September at the latest...

Anyone else bothered by the chart that has anything over 100% when it comes to usage?

Yeah, I am not sure how that works.  Must be an industry thing.  Rated capacity vs some sort of surge capacity?

OK, here is a good test of the example of the absurdity of the gas / oil futures market, which is responsible for a fair amount of the current prices.

California has only two major refinery complexes (CA has special fuels and have no pipelines going out of state anyway).  One of the large ones is about to start undergoing maintenance.  These maintenance periods have never resulted in an actual shortage of gasoline, they have never caused any problems with future supplies but they ALWAYS result in higher prices, temporarily, apparently because stocks are reduced, temporarily, and everyone knows it's temporary.

This will likely result in a national story because in the north coast of CA, the gas is currently JUST under $10 / gallon.  This has to push that over I would imagine.

https://www.eastbaytimes.com/2022/06/16/california-fuel-prices-set-to-soar-as-refiners-undergo-work/

Edit:  Just checked Mendocino is already over $10 for premium, regular is at $9.68

In reply to Pete. (l33t FS) :

You're describing why I like Co-ops as a business structure for utilities. By making the consumer and the owner the same group it eliminates some of the perverse incentives that you're describing. 

AnthonyGS (Forum Supporter) said:

Imagine if someone could provide a graph that was a timeline with fuel prices, world events and policy decisions that might have impacted those prices.....  imagine.  I've seen such graphs but dare not post them here.  

If you can't openly discuss a problem and discuss all causes, solutions are impossible.  

If you don't want to follow the rules at the party, leave.

I was thinking about this a little today and part of the price is tax.  The state gets a share of each gallon as do the feds and I believe it's a straight up cents-per-gallon as opposed to a percentage.  In my state, it works out to about $0.43/gallon, give or take.  If the average fleet fuel economy for gasoline vehicles is 18mpg - and I'm just sort of pulling that number out of my butt - then that's $0.024/mile in what should be road taxes.  And that number isn't figured in in most discussions about EV costs vs gas costs.

I am absolutely opposed to having any sort of GPS monitor installed on cars for tracking mileage for the state vehicle registrar, but I absolutely think that EVs should be getting a per-mile charge every year to collect those taxes which should then be used for upkeep of roads.  If you're getting 4 miles to the kWh of power, and the average kWh for home charging is $0.12, now your EV per mile charge is more like $0.05/mile instead of $0.03/mile. 

Still better than gas, but if we're going to have this big transition to electric, the gas tax is something that is going to have to change, so plan accordingly.  Still way better than the current $0.28/mile for gasoline, but we do need to remember that in most places, we're getting a temporarily free lunch with electric.

In reply to wae :

The trade off is for clean air.  Since EV's don't pay a mileage tax.  At 2% of the nations fleet it's an additional incentive  to reduce pollution.  

In reply to frenchyd :

That's great for the environment, but EVs still cause wear and tear and don't eliminate effects of aging on roads and bridges. Funding for roads and bridges will take a hit as EVs become a larger part of the total vehicles on the road, and then there is the added impact on the electric grid. 

Im all in favor of helping the environment, but EVs don't drive on rainbows or get electricity from unicorn farts, so there will need to be adjustments so they contribute to infrastructure costs just like ICE vehicles. Commercial vehicles get hit twice, my father paid fuel taxes when filling his car hauler, and then paid each state a road use tax each quarter based on his mileage in each state he passed through (whether it was 10 or 10,000 miles).

In reply to frenchyd :

As EV adoption increases, the amount of gasoline sold will increase at a lower rate while the usage of roads will continue to increase.  And EVs could put a higher toll on the roads since they tend to be a bit heavier.  So the roads are going to need increased maintenance which is going to cost more money and that money (is supposed to) come from the gas tax, primarily.

By not addressing that for EVs we are essentially going to be having those that can't afford to go out and buy a new car - or even an expensive used one.  How many $2500 road-worthy EVs can you find on the market? - subsidize the roads for the well-to-do.  That will either be from a larger portion of "other" taxes going to roads or from hiking of the gas tax.

Look, I don't like these class-warfare type arguments and I don't think it's anybody's business how other people spend their money.  But we already sit around and complain about how bad the roads and bridges are.  Not addressing that problem sooner rather than later is only going to exacerbate the issue.  The point of the gas tax is supposed to be that the people who drive more and drive heavier vehicles (that would traditionally consume more fuel per mile) should pay more for the roads.  With the current system, we're completely breaking that model and making it rather fundamentally unfair when there really isn't any reason for it to be so.

In reply to wae :

Oregon has had an alternative to gas tax (not "has tax" like autocorrect originally said) since 2015. They have, IIRC, GPS device, non-GPS device, and manual entry options, administered through a few different external partners. Optional program at registration, and applicable to, I think, EVs and other cars getting more than 40mpg EPA.

https://www.myorego.org/

EVs do pay a surcharge at registration in a lot of states. In CO, it's roughly equivalent to 9000 miles of gas tax for a 30 mpg car if memory serves.

The flat per-gallon road tax has problems as cars become more efficient, especially as asphalt costs are tied to oil costs and also because consumers get all wound up if it's ever adjusted. Colorado DOT is pushing for a mileage-based use tax. 

No Time said:

In reply to frenchyd :

That's great for the environment, but EVs still cause wear and tear and don't eliminate effects of aging on roads and bridges. Funding for roads and bridges will take a hit as EVs become a larger part of the total vehicles on the road, and then there is the added impact on the electric grid. 

Im all in favor of helping the environment, but EVs don't drive on rainbows or get electricity from unicorn farts, so there will need to be adjustments so they contribute to infrastructure costs just like ICE vehicles. Commercial vehicles get hit twice, my father paid fuel taxes when filling his car hauler, and then paid each state a road use tax each quarter based on his mileage in each state he passed through (whether it was 10 or 10,000 miles).

Free lunch,   No EV's don't pay a gas tax but in some states they pay a fee recognizing their unique status.  
    Some states have a low gas tax but higher license fee.  while other states treat it different.  Wear and tear on public roads is not a direct 1 for 1 tax to road usage. Some states give heavy trucks a break while other states give farm implements a break.   
        
 

Keith Tanner said:

EVs do pay a surcharge at registration in a lot of states. In CO, it's roughly equivalent to 9000 miles of gas tax for a 30 mpg car if memory serves.

The flat per-gallon road tax has problems as cars become more efficient, especially as asphalt costs are tied to oil costs and also because consumers get all wound up if it's ever adjusted. Colorado DOT is pushing for a mileage-based use tax. 

    Mileage based tax.  Truckers would that because an 80,000 truck does more damage to a road than a 3000 pound car.  

Since vehicle weight is already part of your registration fee here, I suspect the truckers would still get to pay their share.  

In reply to wae :

In Ohio, hybrids get an extra $300/yr and EVs get an extra $600/yr tax with registration.

At 38.5 cents per gallon, $600 is equivalent to 1558.x gallons per year, or what a 20mpg vehicle uses over about 31k miles.

So the EVs are technically getting overcharged, so to speak.

What is annoying is they consider the Volt to be an EV with an onboard generator so they get charged $600.  But when you collect your fuel receipts and try to get a refund on fuel taxes (generator fuel is tax exempt) they consider it to be a hybrid...