Why gas prices are so high

[Car-Guy]

^^^^^^
And running at 95% capacities it won't take much to push refineries over the edge and significant shortages to start appearing... A bad hurricane or two hitting the gulf coast refineries, (it's that time of the year again) a refinery accident (remember these guys are boiling oil and these refineries are all pretty old), hackers shutting down or taking control of a major O&G SCADA or computer system, (remember that few years ago?) etc, etc...Oh, and let's not forget about refinery turnarounds when refineries are regularly taken off line for extended periods of time for major maintenance or reconditioning. All of a sudden prices won't seem to be the problem.


Have a nice day.

 

[NW-Bound]

To add to what Mathjak107 wrote, I just read an article that said COVID also caused some refineries to shut down. The world lost 4% refining capacity, while the US lost 6%.

And oil companies had no choice but to shutdown some older refineries. They already lost so much money due to COVID.

See: https://finance.yahoo.com/news/biden-and-the-oil-industry-are-talking-past-each-other-213916164.html

Exxon Mobil notched the first loss in its history, a gigantic $22 billion write-off. The five biggest U.S. oil refiners — Marathon Petroleum, Valero Energy, Exxon Mobil, Phillips 66, and Chevron — lost a combined $43 billion as COVID shutdowns worldwide produced an epic plunge in oil prices and energy demand.

 

[Midpack]

It's interesting to hear from those who haven't been involved in production or manufacturing who think you can just turn production capacity up and down like spinning a dial. It's not that easy, and never will be. Adding or restoring production capacity is a costly, lengthy process for most industries.

 

[mathjak107]

It’s easy to make everything political when one has little understanding

 

[Bigdawg]

It’s easy to make everything political when one has little understanding

No matter how much you, me or anyone understands something, that something is always political. That's the nature of politics. People/groups will make literally anything and everything political. Heck, people on here try to make things political. Thank goodness we have porky to shut things down when threads turn that direction.

 

[jollystomper]

Maybe let's back off the political aspects in this discussion, there are plenty of other reasons to dive into of interest to all members.

I would submit that the challenge herein is that the price of gas in the modern era is driven more by political issues (whether governments or wars, which are also political) than anything else.


I know nothing about the oil/gas industry. I will just say that a lot of folks seem to believe that increasing production is as simple as turning on a spigot somewhere to get more flowing.

 

[marko]

It's interesting to hear from those who haven't been involved in production or manufacturing who think you can just turn production capacity up and down like spinning a dial. It's not that easy, and never will be. Adding or restoring production capacity is a costly, lengthy process for most industries.

And even more difficult when half the population hates you for WHAT you produce and the other half hates you for what you're charging for what they want.

 

[Car-Guy]

And even more difficult when half the population hates you for WHAT you produce

Okay, I'll say it...

I wonder if these are the same people that drive gas powered cars, fly on any planes (public and especially private), or use any of the thousands of products that are made from petroleum or work in one of the millions of petroleum related jobs.

and the other half hates you for what you're charging for what they want.

I don't hate them for it but I don't like the rising price of food, medicine, clothes, cars, services, houses, land, etc, etc, either.

 

[MarieIG]

Okay, I'll say it...

I wonder if these are the same people that drive gas powered cars, fly on any planes (public and especially private), or use any of the thousands of products that are made from petroleum or work in one of the millions of petroleum related jobs.

I don't hate them for it but I don't like the price of food, medicine, clothes, cars, services, houses, land, etc, etc, either. Who is to blame for that?

I would respond, but I don't believe the mods would like it.

 

[Car-Guy]

I would respond, but I don't believe the mods would like it.

Trust me, my response was super toned down.

 

[marko]

Okay, I'll say it...

I wonder if these are the same people that drive gas powered cars, fly on any planes (public and especially private), or use any of the thousands of products that are made from petroleum or work in one of the millions of petroleum related jobs.

I don't hate them for it but I don't like the rising price of food, medicine, clothes, cars, services, houses, land, etc, etc, either.

Well all those other things are connected to the price of oil. Some directly, some indirectly

 

[Car-Guy]

^^^^^ I'd agree for the most part, oil is one of the things needed for most everything, one way or the other but now we're getting into the OP's original question: "Why gas prices are so high" .

 

[Koolau]

I'm sure there are at least a dozen reasons that gas prices are so high. If they remain that way for a long period then I suspect it will incentivize the move to EV and Hybrid vehicles and more fuel efficient transportation in general. I know around 2008 it happened and then as gas got cheap it seemed to shift again. It seems to be a constant cycle of up and down and I doubt that will go away.

I can't see a downside to moving away from gas as we move forward and what better way for it to happen than "pain at the pump"? When I fill up I try to keep that in mind!

I don't know if there is a faster way than "pain at the pump" but the "better" way since the dawn of rational man has been unfettered economic free market. And even at $5 (or $6 or $7) a gallon, a $60,000 to $100,000 electric car or equivalent still doesn't compete for many folks - and I like electric cars. That doesn't even count the fact that as coal and nuke plants come off line, electricity is going to cost a lot more and be scarce. Just heard a news article that coal which was down to 19% of electrical is up to 24%. You simply can't accomplish things by wishing and hoping.

I think the march of EVs and especially hybrids/plug-in hybrids will progress, prices will come down, availability will increase, prejudices will wane, battery tech will improve and in 25 to 40 years, electrics will be dominant - just in time for the twilight of the oil era. Pushing the issue with pain has many problems IMHO. YMMV as always.

 

[Mr. Tightwad]

I don't know if there is a faster way than "pain at the pump" but the "better" way since the dawn of rational man has been unfettered economic free market. And even at $5 (or $6 or $7) a gallon, a $60,000 to $100,000 electric car or equivalent still doesn't compete for many folks - and I like electric cars. That doesn't even count the fact that as coal and nuke plants come off line, electricity is going to cost a lot more and be scarce. Just heard a news article that coal which was down to 19% of electrical is up to 24%. You simply can't accomplish things by wishing and hoping.

I think the march of EVs and especially hybrids/plug-in hybrids will progress, prices will come down, availability will increase, prejudices will wane, battery tech will improve and in 25 to 40 years, electrics will be dominant - just in time for the twilight of the oil era. Pushing the issue with pain has many problems IMHO. YMMV as always.

Why do you only reference 60K and 100K EV's?

Why do you skip a 26K Bolt? Or a 27K Leaf? Or a 34K Kona? The last 2 qualify for the rebates to make them even cheaper.

Something to think about.

 

[Koolau]

Why do you only reference 60K and 100K EV's?

Why do you skip a 26K Bolt? Or a 27K Leaf? Or a 34K Kona? The last 2 qualify for the rebates to make them even cheaper.

Something to think about.

Because my DIL has one and runs around without AC or heat because she needs the miles for her grub hub gig. An even more practical issue to her is, like over 50% of people, she lives where there is no possibility of charging at home. She either pays for (slow) fast charging or uses slower free charging at a spot or two that still offer that (like a couple of strip malls and shopping center.) Anticipating the next question: Why did she buy it? When she did, she had a home charging station available and didn't run fast food to yuppies. Things change.

SO, IOW a "practical" replacement for the most average of $20K ICE vehicles is a minimum of $60K. It turns out to be a really nice car for that, but having range and chargeability (if that's a word) requires big bucks still. I assume that will begin to change over time, but we aren't there yet IMHO. YMMV

 

[aja8888]

For those who want out of gasoline purchases, Tesla raised the prices of the Model X today $6,000.

I guess EM is trying to raise cash to pay Twitter the $1 Billion fee they will be shoving in his face as he goes to back out of the deal.

https://www.theverge.com/2022/6/16/23170714/tesla-price-increase-june-2022-model-3-y-s

Tesla has raised the prices of select Model 3, Model Y, Model X, and Model S vehicles, Electrek reports. The largest price increase affects the Model X Dual Motor All-Wheel Drive version, which saw a $6,000 increase from $114,990 to $120,990, while the Model S Dual Motor All-Wheel Drive configuration increased by $5,000 from $99,990 to $104,990. Tesla’s most affordable car, the Model 3, was spared from the most severe increases.

 

[Midpack]

For those who want out of gasoline purchases, Tesla raised the prices of the Model X today $6,000.

I guess EM is trying to raise cash to pay Twitter the $1 Billion fee they will be shoving in his face as he goes to back out of the deal.

https://www.theverge.com/2022/6/16/23170714/tesla-price-increase-june-2022-model-3-y-s

Sarcasm? Trivial to the big picture in that the Model S/X is about 2.5% of total sales, and the Model S outsells the X - so no impact on Twitter buy. But all Teslas have gotten more expensive over the last few years…

 

[aja8888]

Sarcasm? Trivial to the big picture in that the Model S/X is about 2.5% of total sales, and the Model S outsells the X - so no impact on Twitter buy. But all Teslas have gotten more expensive over the last few years…

Not meant to be sarcastic, but just wanted to let everyone know the prices of Tesla's have been increased (inflation?) and just kidding about the Twitter nonsense.

 

[NW-Bound]

Being able to raise price shows that they have demand for their cars and have pricing power.

Yet, Tesla stock dropped -8.5% today. The S&P is down -3.3%.

 

[audreyh1]

For those who want out of gasoline purchases, Tesla raised the prices of the Model X today $6,000.

I guess EM is trying to raise cash to pay Twitter the $1 Billion fee they will be shoving in his face as he goes to back out of the deal.

https://www.theverge.com/2022/6/16/23170714/tesla-price-increase-june-2022-model-3-y-s

They keep raising the prices because the waits are so long that they have to guess how much it will cost to build the car a year from now. Once you order a car, Tesla honors the original price at order time.

Plus they have a huge backlog, especially overseas.

 

[aja8888]

Being able to raise price shows that they have demand for their cars and have pricing power.

Yet, Tesla stock dropped -8.5% today. The S&P is down -3.3%.

Yes, they are booked out pretty far with EV's. Other manufacturers, also out long.

 

[NW-Bound]

OK, so they build into the price the expected inflation.

And if inflation turns out to be not as bad, what is your cost to cancel?

 

[audreyh1]

OK, so they build into the price the expected inflation.

And if inflation turns out to be not as bad, what is your cost to cancel?

$250

 

[NW-Bound]

Hmmm... I wonder how many people sell their car right after taking delivery to make some quick bucks.

 

[aja8888]

Hmmm... I wonder how many people sell their car right after taking delivery to make some quick bucks.

I was behind a KIA EV6 (compact SUV) on the way home from the golf course this afternoon. It had California plates on it and it sure was nice looking and just hummed along at 70 MPH on the freeway. I'd be interested in something like that, but I don't believe they are sod in Texas yet.