Our Awful Situation

Archive for the ‘Gasoline’ Category

Entrepreneurs lug cheap Mexican fuel across border

Posted by Charlie Kilo on July 13th, 2008

Better margins than drugs?

U.S. and Mexican entrepreneurs with an eye for a quick buck are buying subsidized fuel in bulk in Mexico and hauling it across the U.S. border to make big profits, officials say.

With a yawning gap between the cost of Mexico’s state-subsidized fuel and record U.S. pump prices, tanker truck owners and people doing business on the border are filling up tanks or plastic barrels with Mexican fuel and selling it in the United States.

Gasoline in Mexico is around a third cheaper than in the United States. For diesel, prices are more than double — well over $4 a gallon in U.S. border states compared to just over $2 in Mexican border cities.

“It is true tanker trucks are coming from the United States to fill up with supplies in Mexico,” Mario Osuna, the head of Mexico’s consumer watchdog agency Profeco in Baja California state where Tijuana is the capital, said on Thursday.

“There is no way of sanctioning foreigners who come to Tijuana and buy gasoline to sell in their country,” Osuna told Reuters. “Mexico does not have regulations relating to that.”

Border residents who have spotted the price anomaly are jumping on the export bandwagon, taking containers of fuel over the border in pickup trucks to sell.

“We cannot deny that this type of small-scale contraband is going on,” said Joaquin Avina, president of the Association of Gas Stations of Tijuana, Tecate and Rosarito.

When Gas Stations Run Out of Gas

Posted by Charlie Kilo on July 6th, 2008

Consumers aren’t the only ones getting squeezed at the pump. Many gas station owners can’t afford to buy gas either:

Don’t be surprised to see more filling stations with empty pumps. But don’t panic either. There isn’t a gasoline shortage like there was in the 1970s.

What’s happening is that filling stations have had their margins squeezed. Credit-card companies charge by the dollar, pushing up costs per gallon that filling stations pay to work with banks. And forget about sneaking in a few pennies’ worth of profit. Consumers are bargain-shopping like never before. The upshot: Some filling stations either can’t stay in business or are just barely hanging on.

Plenty of filling stations have already gone under. Last year, 3,184 of the nation’s 164,292 gasoline stations closed their doors and went out of business, the biggest drop in five years… 

Pain at the Pump: It’s Time to Start Thinking About $7 a Gallon Gasoline

Posted by Charlie Kilo on June 12th, 2008

I’m getting burned out over speculative talk about gas prices, why they’re going up, and where they’re going to. I see several problems with this article:

U.S. consumers barely had time to get used to the idea of $4 a gallon gasoline before prognosticators started talking about $5 a gallon fuel.

And unfortunately for the U.S. economy, the worst is yet to come.

The average price of gasoline in the United States broke $4 a gallon for the first time Sunday, following a double-digit surge in oil prices last week. And despite an economy that appears to be in an increasingly fragile state, experts are already debating the potential for gasoline to hit $5 this summer.

But here’s what most economists aren’t saying yet: U.S. motorists could easily be looking at $7 a gallon gasoline within two years. And that could have a disastrous impact on the U.S. economy.

“The bottom line is that the effect on the economy is going to be a lot worse than anyone’s talking about right now,” said Money Morning Investment Director Keith Fitz-Gerald, a longtime energy bull who recently boosted his oil-price projection to $225 a barrel. “The bottom line is this: Until someone develops a truly [interchangeable] alternative for oil and gasoline - something that works the same, costs the same and is just as effective - Americans are just going to have to face the fact that over time they’re going to pay more.” 

First off, I don’t think society will bear anything above $6 a gallon of regular gas. Second, developing alternative gas replacement will take at least 30 more years. The only alternative we have (beyond looking for alternative means) is the drill in Americas plentiful oil reserves and release more supply into the market place. The question is: With record profits are oil companies even willing to drill in order to increase supply? With a limited supply and ever increasing demand oil profits will only continue to climb.

Dow falls on poor jobs report, oil at $133 per barrel

Posted by Charlie Kilo on June 6th, 2008

The Dow is taking a hit today due to bad news on several fronts:

Stocks plunged after the sharpest jump in the unemployment rate in more than 20 years and news that wholesale inventories ballooned. Oil jumped more than $6 a barrel.

The employment report showed that U.S. employers cut jobs for a fifth straight month. Nonfarm payrolls shed 49,000 jobs in May, better than the 58,000-decline expected. April was revise to show 8,000 more job losses than previously expected. The unemployment rate shot up to 5.5 percent from 5 percent in April, the biggest monthly jump since 1986.

“I’ve been trading these markets for 25 years; to see a jump like this is a little scary,” Jack Bouroudjian of Brewer Investment Group told CNBC. “But, these markets have already factored in that weakness.”

The market’s initial knee-jerk was a sharp sell-off but economists pointed out that the historically high jump in the unemployment rate was likely a statistical fluke.

Ethanol feels squeeze: Amid rising oil and food prices, biofuel industry losing its friends

Posted by Charlie Kilo on May 26th, 2008

Corny:

Not long ago, the fledgling ethanol industry was the darling of investors, farmers, the federal government and a lot of Americans who liked the idea of turning corn into fuel. 

But suddenly, it doesn’t have nearly as many friends. 

Rising worldwide food prices and shortages have spurred calls in Congress to roll back the federal requirement that increases the amount of ethanol and other biofuels blended with the nation’s gasoline supply. Critics say so much corn is being used for ethanol that there’s less available for people and animals to eat, raising prices of everything from tortillas to meat.

What’s more, investors who bought into the industry in good times aren’t seeing the returns they had hoped for as once-record profits began to fall.

House of Reps passes bill to sue OPEC over high gas prices

Posted by patriot on May 20th, 2008

Cold, hard proof that Congress is largely a pack of imbecils:

The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

Why are gas prices so high?

Posted by patriot on May 20th, 2008

They hardly mention the falling dollar and skyrocketing inflation, which is really the #1 cause of the sharp increase in gasoline price.

It’s hard to imagine now, but in 1999 gasoline sold for 90 cents a gallon. How’d we get from there to $4 a gallon?

There is no short answer - many things happened, and together they formed a chain of events from cheap gas to

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