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roadwarrior

The Disparity Between Oil Prices And The Cost Of Gasoline

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That is really upsetting.  Our gas prices went up 0.15 a gallon over night because of Ike, and they are talking about rationing it as well.

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Question.  The article talks about damaged refineries.  If I understand right, there are few refineries in the US, but aren't they mostly inland?

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There are refineries along the entire gulf coast; here in Lake Charles, Louisiana there is a Citgo and a Conoco refinery.

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I remember when an Exxon refinery in IL was on fire a few years ago, they blamed a local spike in gas on that, but I just googled refineries and see that there are alot thru the US.  Can the shut down of 3 or 4 refineries really make that much difference in supply and pricing, or is it market ploy?

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firefighten15, The refineries on the Louisiana and Texas Gulf Coasts provide 25% of all the gasoline and diesel fuel consumed in the U.S.  These refineries have all been shut down because of Ike.  From this point on it becomes basic economics.  i.e.  The supply of gasoline to our nation is greatly reduced, yet the demand, in anticipation of a supply shortfall, greatly increases.  Guess what happens to the prices of fuel?  

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Can the shut down of 3 or 4 refineries really make that much difference in supply and pricing, or is it market ploy?

It's a WHOLE lot more than 3 or 4.  Last I heard just over 20% of the nations refining capacity was shutting down.

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If I understood correctly, it was suggested in another thread that the capitalism or price gouging, was maybe a good thing because in a concentrated area it kept the supply healthy.  Is this somewhat correct?

I'm not getting into the gouging debate, just trying to digest everything.

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firefiten, bear in mind the the refineries are in business to make a profit.  Obviously, this is capitalism at work.  The refineries do not dictate the price of the product they supply.  They simply sell to the highest bidder.  Capitalism.  The bidders could be large wholesalers, retailers, airlines, or nauseatingly, speculators.  Capitalism.

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yep, the almighty dollar. it's one of those "i have it and how much are you willing to pay for it" situations.  my bike keeps looking better all the time.

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I guess I really do understand it, It just don't sit right.  Here on local and private level I was taught by family and neighbors that "we're in this together attitude" is all there is to it.  I'm thinking that if I ever gave it a go in the business world, I'd get stomped!  

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