GREED...Generaly Really Expensive Every Day
-----Original Message-----
From: Dave Terrick <dterrick@pangea.ca>
To: Bowen, Patrick A. RP2 <jak0pab@jak10.med.navy.mil>
Cc: list, triumphs <triumphs@autox.team.net>
Date: Monday, April 12, 1999 21:24
Subject: Re: FW: PRICE OF GAS
>
>Hi Patrick and list,
>
>I'm a bit behind on my mail but I think you may find this interesting if
>you're "not really"an accounting or economics kinda guy or gal... I think
>you will understand more than you realize:
>
>There are two major types of Generally Accepted Accounting Principles
(GAAP)
>in allowed: FIFO (first in first out) and LIFO (last in first out).
>this is a measure of cost against sale price for any goods. A retailer
just
>loves to sell you the oldest goods at the highest price (assuming goods
>become more expensive over time, this would be Last In First Out (LIFO) on
>the income side and First in First Out (FIFO) on the expense side. Mixing
>of the accounting styles is strictly forbidden by tax law and GAAP. So....
>
>We are dealing with unadulterated GREED here. The retail side says, "it's
>summer (or something else)...it's time for a price hike! And the Oligopoly
>(a market controlled by "few" players as opposed to monopoly which is one
>player as opposed to free competition which is many players with no
barriers
>to entry) goes along with it. Prices rise everywhere, and the oil in the
>"system" just became 10% more valuable.
>
>
>All this means is that, when sold, there is that much more profit to "pay
>tax" on.
>
>Of course, we know oil companies sponsor many major world class sporting
>events, arts, culture, science, etc., and that is removed from income
before
>the "profit" is calculated. Somebody in that company writes the budget,
and
>therefore somebody knows what the anticipated revenues should be AT ANY
>POINT IN THE YEAR.
>
>One interesting point to make about our recent consumption squaks on this
>list is this: We are a small minority among gas consumers. Generally,
fuel
>consumption is 10% higher in the "severe conditions" such as sleet or snow.
>Cars use more energy to warm up, etc. If, (and only if) more people drive
>consistent mileage (no sports car people here, just "Joe lunchbucket",
OK?),
>would it not seem reasonable that with less demand that the price should be
>higher in the summer?!?!?
>
>Now the counterpoint, just to be even. Argue that given a forecast demand
>for the year, the SUMMER prices are correct. Perhaps winter prices are
>lower on purpose, either to adjust our demand (higher) or to reduce income
>for the purposes of tax (shoudda sponsored VTR <G>). The oil execs might
>argue they are "reducing winter price" not "Raising summer price".
>
>See ho easy it is to spin "facts"? And I don;t even get paid to do this.
>But, my University economics statistics, marketing, and accounting courses
>tell me that "what is, is, because of who has the power at that time".
>
>I have just completed my Certified Financial Planner designation. As such,
>I "might" council ALL of you to go buy shares in the "oil companies" and
>then be happy when profits rise!
>
>There. See. There IS an answer. (Damn, that makes me wish my Honda was a
>gas guzzler)
>
>Dave T
>Winnipeg
>
>
>-----Original Message-----
>From: Bowen, Patrick A. RP2 <jak0pab@jak10.med.navy.mil>
>To: Scott Hall <sch8489@garnet.acns.fsu.edu>; Joe Curry <spitlist@gte.net>
>Cc: JDean <jdean@designdimension.com>; spitfires@autox.team.net
><spitfires@autox.team.net>
>Date: April 12, 1999 11:29 AM
>Subject: Re: FW: PRICE OF GAS
>
>
>>
>>Scott, if I may answer your questions. (please read I do not agree with
>>how this works, but it is how it works) The cost of Gasoline, as well as
>>many products, is not pushed by how much it cost the reseller to purchase
>>it but how much it will cost the reseller to purchase the replacement for
>>it. It is irrelevant if he bought the gas at $1.00 a gallon if he knows
>>the next time he refills that it will cost him $1.20 a gallon than that is
>>what he will charge. As for why our gas is so much cheaper than other
>>countries, believe it or not, it has little to do with taxation as much as
>>it does the fact that our government tightly controls the "mixture of
>>gasoline that we use. The government says that for every gallon of gas so
>>much will be from alaska, gulf of mexico, middle east and so on. They
>>control this mixture to ensure high quality grades and to control the
>>market. In all honesty Texas has huge amounts of oil beneath it still,
why
>>are we not using it? Texas does not fit into the governments equation and
>>they actually pay people in Texas to cap off and fill in their wells. Add
>>this and the fact that the industrial process of refining which accounts
>>for the largest cost of the gas is much cheaper here than it is elsewhere
>>in the world.
>>
>>Here is the average breakdown of a gallon of gas being sold for $1.69 -
.45
>>for Crude, .42 Tax, .10 reseller, .72 refining.
>>
>>Sorry for the Economic lesson, had to take a few too many classes in
>college.
>>
>>Patrick
>>
>>At 02:17 AM 4/11/99 -0400, Scott Hall wrote:
>>>
>>>thank god, I was beginning to think I was the only one that noticed this.
>>>how come every time I tun on the morning radio and hear of a newly
>>>announced (as in just happened today, not a few weeks ago) opec price
>>>hike, the prices at the pumps jump that same day or the next? does the
>>>crude get pumped directly to an underground refinery beneath my gas
>>>station in 4 hours? and why, when I hear of an opec price drop, it takes
>>>more than a month (or longer, if ever) to see the prices fall?
>>>
>>>and, though I'm not sure if it was on this list or not, someone said wrt
>>>other countries paying ~$5.00 US/gal for gas: 'so what, just because they
>>>tax themselves into oblivion doesn't mean we have to', let me add: AMEN.
>>>yes they pay more there. yes america is possibly the lowest taxed and
>>>greatest country to live in. but by no means does that mean that it
>>>couldn't and shouldn't be much, MUCH better. it's because we keep
telling
>>>ourselves how great we have it that we're willing to overlook incremental
>>>tax hikes. soon, we'll be up there with european countries. then what?
>>>
>>>oops, I should stop now. my soapbox isn't rated for rants of more than 3
>>>minutes. and here comes than damn nurse with my meds again. back, BACK,
>>>I say! no! no sponge bath!
>>>
>>>scott
>>>
>>
>>Patrick Bowen
>>'79 Spitfire
>>Jacksonville FL
>>
>
>
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