Surprised no one complained about gas prices yet?
- Thread starter maxmk8
- Start date
look neither unbiased or accurate to me
look neither unbiased or accurate to me
or maybe i read it wrong.
since the hey day of cheap consumer fuel prices in the mid 70s when gas was 50 or so cents the rate of inflation rate is 475%. that gas today would be $2.25 a gallon inflation adjusted. that is not the same fuel we burn today (reformulation) nor was it purchased under the same market conditions including demand and taxes.
we have a developing giant in china that is thirsty for raw materials and for the first time proven reserves peaked and then declined in 2007 while the need out paced production at the wellhead and the pump. much like the spike in 1980 when fuel price was $1.10 a gallon or inflation adjusted to $3.66 in 12/07 dollars.
if we go way back to 1913 when fuel was $.18 and factor the inflation rate of 2132%, that same gallon is $3.84. this was at the time that production was fully domestic with adequate production and the sherman anti trust act protected us from the robber barons.
this is what economist are talking about when they inflation adjust fuel prices and claim fuel is not overpriced.
i believe market conditions will substantially increase the price of fosil fuel for the balance of the life of this commodity with normal market variations.
our inflation adjusted fuel cost per mile has gone been reduced substantially as a result of efficiency both mandated by the federal government and the retail market. in my case it is half of what i was paying in 1973 when i started driving my 64 327 12mpg vette.
i don't like to pay $80 and rising for tanks of fuel for transportation but am not able to adjust my usage. i hope that many of those suv and pu drivers will suffer from the effect and downsize making the roads safer and fuel demands lower. something has to be done when we consume 25% of the world's oil production.
there is a bright spot with canada's oil sand. this reserve is estimated at 175 billion barrels. cost to recover is much higher than underground sources but we are approaching marketability now.
happy motoring...tom
look neither unbiased or accurate to me
Found another unbiased source for inflation adjusted prices of gas...
http://www.randomuseless.info/gasprice/gasprice.html
or maybe i read it wrong.
since the hey day of cheap consumer fuel prices in the mid 70s when gas was 50 or so cents the rate of inflation rate is 475%. that gas today would be $2.25 a gallon inflation adjusted. that is not the same fuel we burn today (reformulation) nor was it purchased under the same market conditions including demand and taxes.
we have a developing giant in china that is thirsty for raw materials and for the first time proven reserves peaked and then declined in 2007 while the need out paced production at the wellhead and the pump. much like the spike in 1980 when fuel price was $1.10 a gallon or inflation adjusted to $3.66 in 12/07 dollars.
if we go way back to 1913 when fuel was $.18 and factor the inflation rate of 2132%, that same gallon is $3.84. this was at the time that production was fully domestic with adequate production and the sherman anti trust act protected us from the robber barons.
this is what economist are talking about when they inflation adjust fuel prices and claim fuel is not overpriced.
i believe market conditions will substantially increase the price of fosil fuel for the balance of the life of this commodity with normal market variations.
our inflation adjusted fuel cost per mile has gone been reduced substantially as a result of efficiency both mandated by the federal government and the retail market. in my case it is half of what i was paying in 1973 when i started driving my 64 327 12mpg vette.
i don't like to pay $80 and rising for tanks of fuel for transportation but am not able to adjust my usage. i hope that many of those suv and pu drivers will suffer from the effect and downsize making the roads safer and fuel demands lower. something has to be done when we consume 25% of the world's oil production.
there is a bright spot with canada's oil sand. this reserve is estimated at 175 billion barrels. cost to recover is much higher than underground sources but we are approaching marketability now.
happy motoring...tom
My dad started 35 years ago and said he would never raise his rates unless there was no other choice and he said there would be no charges that you couldnt explain I try to stay with his theory as much as possible. Its called being honest. The oil prices have to come down. I work hard for my money every dollar of it and thats what my customers do too. I guess I think about them to much. Yes the rich keep getting richer. I like most of you am in the upper middle class and we are the ones that suffer from high fuel costs.
Not much to read wrong Tom, the chart is one individual's fuel records over the years tracking and adjusting for inflation. It clearly illustrates the cost of fuel adjusted for inflation is less than most believe.
However, another important fact to consider, and one you alluded to, is the comparison to price increases to per capita disposable income.
www.cato.org
While you cannot argue the record setting price increases are nearly unprecendented, there is more than ancedotal evidence they are not 'over the top'... yet.
right after the post i reviewed your graph
right after the post i reviewed your graph
and i realized your graph supported my wordy reply when i understood the adjusted for inflation curve.
as always driller you are correct particularly in that this is a shocking increase that has quickly errased the argument that fuel prices have not kept pace with the economy.
i am just glad i no longer drive my 64 vette since my fuel bill would be double or $160 for the same miles driven. the elders among us are actually getting a largely unknown discount in the cost to drive as a result of modern automobile efficiency.
a 1973 ten dollar fill up was 3/4 of my days wage and took me 200 or so miles. i lived to feed that car or push it to the gas station. there was a sticker on the dash when i bought it. it said ass, grass or gas nobody rides for free.
no free rides today either. we may be in the drivers seat of our automobiles in the garage but if we want to start the engine we need fuel. we compete with the world to buy this resource and there are more buyers than sellers. a simple but painfull law of finance dictates if demand exceeds supply then prices increase.
european governments have a solution to waste and abuse of fuel. they charge taxes that are 10 times what we pay. this has a chilling effect of discretionary driving and has provided funds for mass transit road improvements and the like.
right after the post i reviewed your graph
Not much to read wrong Tom, the chart is one individual's fuel records over the years tracking and adjusting for inflation. It clearly illustrates the cost of fuel adjusted for inflation is less than most believe.
However, another important fact to consider, and one you alluded to, is the comparison to price increases to per capita disposable income.
www.cato.org
While you cannot argue the record setting price increases are nearly unprecendented, there is more than ancedotal evidence they are not 'over the top'... yet.
and i realized your graph supported my wordy reply when i understood the adjusted for inflation curve.
as always driller you are correct particularly in that this is a shocking increase that has quickly errased the argument that fuel prices have not kept pace with the economy.
i am just glad i no longer drive my 64 vette since my fuel bill would be double or $160 for the same miles driven. the elders among us are actually getting a largely unknown discount in the cost to drive as a result of modern automobile efficiency.
a 1973 ten dollar fill up was 3/4 of my days wage and took me 200 or so miles. i lived to feed that car or push it to the gas station. there was a sticker on the dash when i bought it. it said ass, grass or gas nobody rides for free.
no free rides today either. we may be in the drivers seat of our automobiles in the garage but if we want to start the engine we need fuel. we compete with the world to buy this resource and there are more buyers than sellers. a simple but painfull law of finance dictates if demand exceeds supply then prices increase.
european governments have a solution to waste and abuse of fuel. they charge taxes that are 10 times what we pay. this has a chilling effect of discretionary driving and has provided funds for mass transit road improvements and the like.
there have been historical spikes
there have been historical spikes
1980 is an example during the carter administration. fuel was 30% more. reagan got the immediate release of the embasy hostages and agreements with opec which resulted in price stabalization.
the producers will charge whatever the market will pay up to the point that it results in a protracted recession. this would be against their interest.
this is a different world. the producers can not increase production to meet this huge demand overnight. these prices will appear cheap in a few years unless there is a major worldwide recession that reduces demand.
there have been historical spikes
1980 is an example during the carter administration. fuel was 30% more. reagan got the immediate release of the embasy hostages and agreements with opec which resulted in price stabalization.
the producers will charge whatever the market will pay up to the point that it results in a protracted recession. this would be against their interest.
this is a different world. the producers can not increase production to meet this huge demand overnight. these prices will appear cheap in a few years unless there is a major worldwide recession that reduces demand.
sleeper
Former LOD President
Oil is traded on a futures market. Oil companies actions and supply and demand have very little to do with the price of oil. Their "profiteering" is nothing more than capitalism. If anything, the government should provide tax incentives for those companies to invest that money in new refineries and expanded drilling in the US.
The reason oil is so high is because investors in oil expect it to go up, so they buy "stock" in oil. The more they buy, the more it goes up. Speculation is the main reason that oil is so high. This speculation is in part based on supply and demand, but not entirely.
My boat gets 2.5 MPG. My truck gets anywhere between 10-14, about 12 on average. In the summer I spend about $700 a month on gas.
The reason oil is so high is because investors in oil expect it to go up, so they buy "stock" in oil. The more they buy, the more it goes up. Speculation is the main reason that oil is so high. This speculation is in part based on supply and demand, but not entirely.
My boat gets 2.5 MPG. My truck gets anywhere between 10-14, about 12 on average. In the summer I spend about $700 a month on gas.
commodity markets are complex
commodity markets are complex
in brief oil is not generally traded on the futures markets. mere rights are traded.
most oil is traded on the private markets where the parties get together and form a contract to purchase the product. these contracts can be relatively straight forward or can be of the requirement or output variety or contain any other term that the parties can dream up to serve their needs. these contracts are not normally reported to the exchanges.
the spot market is were most of the additional supply is traded. here the law of supply and demand determines the price. these prices are reported to the exchanges and then are used by futures traders to adjust the price of futures.
a future is the right to buy or sell a commodity at a price, date, place and quanity certain. sometimes producers and purchasers use these markets as a hedge or insurance.
this discussion is academic and moot. we live in the real not the future world and the prices we pay are the prices. it matters little if we think we should drill to locate more reserves, offer this or that credit, or do this or that.
those are long term solutions to our real needs have been present since the oil embargo.
personally i am tired sitting for 5% of my life on the freeway. investment in the infrastructor has not kept pace with demand for the roadways. i like the idea of unaffordable fuel that curtails discretionary use and taxed high enough to support efficient well maintained highways.
commodity markets are complex
in brief oil is not generally traded on the futures markets. mere rights are traded.
most oil is traded on the private markets where the parties get together and form a contract to purchase the product. these contracts can be relatively straight forward or can be of the requirement or output variety or contain any other term that the parties can dream up to serve their needs. these contracts are not normally reported to the exchanges.
the spot market is were most of the additional supply is traded. here the law of supply and demand determines the price. these prices are reported to the exchanges and then are used by futures traders to adjust the price of futures.
a future is the right to buy or sell a commodity at a price, date, place and quanity certain. sometimes producers and purchasers use these markets as a hedge or insurance.
this discussion is academic and moot. we live in the real not the future world and the prices we pay are the prices. it matters little if we think we should drill to locate more reserves, offer this or that credit, or do this or that.
those are long term solutions to our real needs have been present since the oil embargo.
personally i am tired sitting for 5% of my life on the freeway. investment in the infrastructor has not kept pace with demand for the roadways. i like the idea of unaffordable fuel that curtails discretionary use and taxed high enough to support efficient well maintained highways.
At an average of $0.42 per gallon in federal and state taxes with state sales taxes at a percentage of the sales, I doubt that any credible arguement can be made for insufficient taxes on gasoline.
Here in WV, the state is claiming it only has a mere fraction of the money needed for infrastructure upkeep despite our above average taxes on gasoline.
In a local response, our county decided to try to pass a special use tax of $2 per week from all those employed in the county to be utilized to provide local highway projects. The idea was summarily dismissed by the voters - a sign to me that they believe we pay enough already.
After all, the DOT had enough funds to buy a huge parcel of land and erect a new highways maintenance facility.
Meanwhile the tax revenues increase and the potholes continue to grow.
look at the state of our roads
look at the state of our roads
west virginian's are pikers when it comes to taxes. in ca we have the distinction of paying the highest combined tax with a total of $.68 per gallon. additionally, you have robert byrd to pork you up to include freeways to know where. i have never seen such waste. in ca there is gridlock, even on our $5 or 50c a mile toll roads.
by the way i just made part of the credible argument for more taxes and you helped me with your potholes. the most rational way to improve or pay for items of public good is through user fees. it may not be popular but it is fair. in my area we need a new connector to orange county, wider freeways, bigger offramps, better traffic controls on the highways, road repairs etc, etc, etc.
it has been estimated that the need for infrastructure repair and improvements is many trillions of dollars. should we levy the tax on everyone equally or pass it on to hour heirs. one is regressive and the other is folly.
the purchase of non agricultural fuel is directly related to miles driven on the road.
it is my hope the tax increases dramatically. this will not only reduce our discretionary driving, lower our national need to import oil, force drivers to double or tripple up to work, live closer to work and improve my quality of life.
but not to worry. this is my folly and nothing more than grist for the mill.
tomorrow i will still be sitting in traffic. happy motoring
look at the state of our roads
At an average of $0.42 per gallon in federal and state taxes with state sales taxes at a percentage of the sales, I doubt that any credible arguement can be made for insufficient taxes on gasoline.
Here in WV, the state is claiming it only has a mere fraction of the money needed for infrastructure upkeep despite our above average taxes on gasoline.
In a local response, our county decided to try to pass a special use tax of $2 per week from all those employed in the county to be utilized to provide local highway projects. The idea was summarily dismissed by the voters - a sign to me that they believe we pay enough already.
After all, the DOT had enough funds to buy a huge parcel of land and erect a new highways maintenance facility.
Meanwhile the tax revenues increase and the potholes continue to grow.
west virginian's are pikers when it comes to taxes. in ca we have the distinction of paying the highest combined tax with a total of $.68 per gallon. additionally, you have robert byrd to pork you up to include freeways to know where. i have never seen such waste. in ca there is gridlock, even on our $5 or 50c a mile toll roads.
by the way i just made part of the credible argument for more taxes and you helped me with your potholes. the most rational way to improve or pay for items of public good is through user fees. it may not be popular but it is fair. in my area we need a new connector to orange county, wider freeways, bigger offramps, better traffic controls on the highways, road repairs etc, etc, etc.
it has been estimated that the need for infrastructure repair and improvements is many trillions of dollars. should we levy the tax on everyone equally or pass it on to hour heirs. one is regressive and the other is folly.
the purchase of non agricultural fuel is directly related to miles driven on the road.
it is my hope the tax increases dramatically. this will not only reduce our discretionary driving, lower our national need to import oil, force drivers to double or tripple up to work, live closer to work and improve my quality of life.
but not to worry. this is my folly and nothing more than grist for the mill.
tomorrow i will still be sitting in traffic. happy motoring
Here's my situation and why I am not too concerned with the price of gas:
1. I pay about $3K a month in mortgage
2. $1K a month is business expenses (sans gas)
3. $900 a month in home/health/auto insurance
4. $500 a month in groceries
5. $300 a month in Hummer payments (refied down from $800)
6. $250 a month in utilities
7. $250 a month in tithes
8. $140 a month in FUEL
Fuel comprises about 2% of my monthly bills. When it cracks my top 3, then I'll get concerned.
Just my philosophy here.
1. I pay about $3K a month in mortgage
2. $1K a month is business expenses (sans gas)
3. $900 a month in home/health/auto insurance
4. $500 a month in groceries
5. $300 a month in Hummer payments (refied down from $800)
6. $250 a month in utilities
7. $250 a month in tithes
8. $140 a month in FUEL
Fuel comprises about 2% of my monthly bills. When it cracks my top 3, then I'll get concerned.
Just my philosophy here.
Ouch, I'm glad I don't live in CA. Well, we still have it better than other countries, and our gas prices are artificially low. Then again, I don't get gas often (don't drive much and get others to take the car to the gas station). I did just put $50 something worth of shell into her last week. But for me, it's worth it to enjoy all my trips in the car.
WTF is that?
?And I think if it cracked your top 3 you wouldn't be driving a car buddy.