Engineered fuel prices

Using “market forces” is the standard excuse for ripping off customers and taking huge profits, there is no need to charge insane prices for fuel at the pumps, big companies like Exxon, Mobil and Chevron are the fuel producers, nothing has changed much in the production processes, and yet they raise the end prices because they can get away with it. This insane chasing ever higher prices will only bring about a catastrophe to peoples living standards and severely affect businesses world wide, in all probability it will culminate in a very deep worldwide recession that will take years to recover from, using the Ukraine/Russia war is a smokescreen for the unscrupulous profiteers to hide behind. Dave W

They don't look any further ahead than next quarter's bottom line. The CEO gets his multi multi million dollar bonuses while the going is good then moves on to the next lucrative position before the resulting fallout hits the fan.

Hopper and Dave W...

100% agree with your comments !

Regards

Derek

Market forces is basic economics - we may not like it, but it's how the world works. It's very simple: when demand exceeds supply, prices rise until only one customer is prepared to pay. Conversely prices of unwanted goods drop until someone is prepared to pay. The going rate is a balance.

For example, when selling Samsaranda Towers, and ten equally lovely buyers desperately want to buy it, should Dave sell to the highest bidder or the lowest? I think I know the answer, and wouldn't accuse Dave of being an 'unscrupulous profiteer'. Members of the forum who play the Blame Game based on unsubstantiated opinion might be less forgiving. Off with his head!

Can anyone suggest an alternative to market forces? Faced with two or more people wanting to buy a lathe how should it be decided who gets it and for how much? Is it profiteering to take advantage of those prepared to pay more for a Myford?

Dave

It is a zero sum game for us.

I make "X" amount of money, and so X has to be divided by all of my expenses.

If gas goes way up (it has), then we drive very little, don't take trips, and walk when we can to the store.

Ditto with other items such as food, utilities, etc.

When expenses go up, we cut back on everything across the board, until all of our expenses meet "X" again.

Right now we pay the utility bill, buy food, and that is about it.

We don't drive the car unless we absolutely have to go somewhere.

Energy prices can't remain high if nobody can afford to buy anything.

What we really need are stable prices on everything, not runaway inflation due to excessive gov spending.

.

Market forces DO work.

Supermarkets watch each other's prices very carefully.

If X is selling a product cheaper than Y, Y loses sales so reduces the price to at least match, or undercut X.

(Remember John Lewis "Never knowingly undersold" )

When Danish bacon was costly, housewives stopped buying as much. Guess what? The price fell, 'cos people would no longer buy until the price fell to a tolerable level.

If we all stopped buying petrol and diesel, the price would soon start to decrease. Unfortunately we need fuel, and they know it!

I suspect that a fair bit of my pension is being funded by investments in oil companies and the dividends they bring in. Seems to be generally felt that most investments are held by pension funds, insurance companies, and so on. Some money goes to private investors, and, yes, the CEO and friends may be taking a fair bit (expressed as a percentage of profit, though, how much is that?) The sheiks are another matter, but no worse than Putin's mates who have stitched up their countrymen - but who are our best hope of applying pressure on the great man due to their falling profits.

The primary use of and argument for markets is to establish commodity prices which are essentially the maximum going rate for any product. When markets are not checked in some way to eliminate wild fluctuations, socially undesirable effects such as such low prices that producers go out of business and supply ceases or such high prices that huge amounts of social dammage occurs. Markets can feed us very well wehen stable but when unstable can just as efficiently starve us.

regards Martin

I'm sorry, people getting upset with Shell/BP is just mis-direction as far as I'm concerned. We've been busy digging a hole in terms of energy security for some time but 'they' (media/politicians/lobbists) are never going to admit it.

I'm sure there are some folk who might not agree with me, but when you positively discourage investment in fossil fuels without having a clear transition plan to get to fully renewable 24x7 solutions (be that wind, solar or nuclear) then you are obviously going to have problems. And if I can figure that out, cleverer people than me can get there pretty quickly too. All Putin has done it take advantage of a situation that the West has largely placed itself in because, quite frankly, of a mindless rush to net zero.

Because of this companies such as Shell were actively discouraged from exploring the Cambo field, our 'Rough' gas storage in the North Sea was shut down without any thought about UK gas self-sufficency (because Europe will always have lots won't it?) and we've been busy closing down our gas/coal fired power stations before base-generation replacements have been built or even (it seems) planned.

This is before we even get into fracking and the quite frankly strange rules around tremor levels. Regulations which were set at such a low level (on a logarithmic scale) that it would mean the instant closure of all quarries and mines around the country if it were to be applied to them.

So I'm afraid we had already dug our energy 'hole' long before Putin decided to take advantage of our stupidity. By all means work towards a cleaner/greener world but please do have some sort of plan to get us there without the lights going out and our factories being forced to shut down this winter - just so we can stay warm (always assuming we can afford to pay the bills of course).

Regards,

IanT

There may be a small improvment, I filled the car up from nearly empty and the bill was £12 less than I expected for 44 litres of diesel.

According to the interweb petrol costs $1.18 per litre in USA. this is £0.97 in Uk money. Don't complain too much PatJ. In the UK we're paying at least £1.62, the motorway service station near me is charging over £2

I don't know if it's relevant to the OP's point, but as an aside a large part of that difference is due to taxation. In the US they pay around $0.09 per liter tax (combined Federal and average State tax), so the 'actual' cost of a liter of gas is around $1.09. AFAIK they don't have an additional 'sales tax', but I might be wrong. Here (UK) we pay £0.53 per litre duty, plus 20% VAT on the total ('actual' cost +duty - yes, we pay tax on tax!) which means that the 'actual' cost of a £2 litre of petrol is ~ £1.14. I guess the remaining difference is down to the UK being more dependent on oil imports than the US.

Just thought I'd share that midnight calculation!

Robin

But then you end up living in a world run by real estate salesmen and their ilk. The end result is great for profits, not so great for good lives for most people.

A certain amount of government price controls on essential items such as energy and food worked in the past and would still work if unfettered free-market economics had not been adopted as a religion. 30 years later we are still waiting for the trickle down effect to trickle down to us. Stats show the wealth continues to trickle upwards instead.

If our government puts a cap on what oil companies can charge in this country then they will sell it to someone else. I'd rather pay more than freeze. What we should do is set some declining limit on how much gas the country will consume in a year, then allow fracking. We can't stop using fossil fuels overnight, and it will take years to improve insulation and various industrial processes to significantly reduce the energy requirements. In the meantime let's burn our own gas rather then importing it. I suspect a lot of our housing stock with solid 9" walls is a lost cause, but as we seem unable to build enough houses as it is we are unlikely to start pulling the old ones down willy nilly. I don't agree with Insulate Britain's tactics, but the do have a point.

As you say Ian we have dug our energy 'hole' and we keep on digging, have done for the last 20 years!!! I can't describe how I feel regarding politicians of all parties, they seem clueless even about the simplest problems.

Tony