Hey grocery stores

[doubledeuce]

Have they worked?

Yes, does the amount you pay for gas and electric fluctuate daily? Nope. In fact, it is usually at a set price for about two years before the utility petitions their states PUCO( public utility commission) for a rate increase. Then, when they do petition, they have to provide substantial evidence that a rate increase is necessary. The rate increase is generally based on the amount of capital investment the utility made to upgrade their system and prove that that capital investment was needed.

Upkeep and maintenance is not part of an increase, that is viewed as the costs of doing business and is built into the initial capital investment rate increase.

[doubledeuce]

I do not think it is a supply and demand market. There is no way the demand fluctuates that drastically in short periods of time. But when you completely control the supply, the demand is irrelevant. Also, what incentive is there to maintain the refineries? If a refinery goes down they just raise the price. Heck, if your competitions refinery has to shut down for maintenance you get to jack up your prices...if your refinery shuts down, you get to jack up your prices. Failure is profitable.

[Jim Schue]

I do not think it is a supply and demand market. There is no way the demand fluctuates that drastically in short periods of time. But when you completely control the supply, the demand is irrelevant. Also, what incentive is there to maintain the refineries? If a refinery goes down they just raise the price. Heck, if your competitions refinery has to shut down for maintenance you get to jack up your prices...if your refinery shuts down, you get to jack up your prices. Failure is profitable.

 

Thank you. Totally rigged system.

[John Anthony]

I do not think it is a supply and demand market. There is no way the demand fluctuates that drastically in short periods of time. But when you completely control the supply' date=' the demand is irrelevant. Also, what incentive is there to maintain the refineries? If a refinery goes down they just raise the price. Heck, if your competitions refinery has to shut down for maintenance you get to jack up your prices...if your refinery shuts down, you get to jack up your prices. Failure is profitable.[/quote']

 

The Enron concept. Everyone, should create supply issues, all is fair in capitalism, or is that actually deceit?

[doomer]

The problem with the energy markets and with gasoline (or other fuel) costs is that they are not a "perfect" market because the demand elasticity curve essentially doesn't exist for the industry as a whole. Meaning...change in price has little influence (at least in the short term) over demand as opposed to a market and a normal demand curve where there is a relationship between price of goods and the quantity demanded. It does exist between providers IF the consumer has the option to shop around because if one gas station, for example increases its price, the consumer will go to a cheaper station. There is no such opportunity for consumers of utilities and that is why there is a level of control over the pricing.

 

IMO cheap oil and cheap gas does little to help our country in the long term because it increases the breakeven point on the investment in alternative fuel sources or investment in conservation methods, and just increases our dependence on fossil fuel.

[Clyde]

Yes, does the amount you pay for gas and electric fluctuate daily? Nope. In fact, it is usually at a set price for about two years before the utility petitions their states PUCO( public utility commission) for a rate increase. Then, when they do petition, they have to provide substantial evidence that a rate increase is necessary. The rate increase is generally based on the amount of capital investment the utility made to upgrade their system and prove that that capital investment was needed.

Upkeep and maintenance is not part of an increase, that is viewed as the costs of doing business and is built into the initial capital investment rate increase.

 

Isn't it tough to compare electricity prices to oil prices? I'm not overly familiar with electricity but I don't see it priced on the world market.

[Clyde]

I do not think it is a supply and demand market. There is no way the demand fluctuates that drastically in short periods of time. But when you completely control the supply, the demand is irrelevant. Also, what incentive is there to maintain the refineries? If a refinery goes down they just raise the price. Heck, if your competitions refinery has to shut down for maintenance you get to jack up your prices...if your refinery shuts down, you get to jack up your prices. Failure is profitable.

 

You can't say it's not "supply and demand" and then say when the supply is controlled...

 

If supply is controlled(It is , especially by OPEC) then it's going to have an impact on prices. Demand does not change daily (as you point out) but the supply can and does. SA does not want to let it's supply hit the market if the market prices are low. They'll wait.

 

Your refinery issue shows that it IS a supply and demand issue. Not 100% but it's certainly a big part of pricing.

[doubledeuce]

You can't say it's not "supply and demand" and then say when the supply is controlled...

 

If supply is controlled(It is , especially by OPEC) then it's going to have an impact on prices. Demand does not change daily (as you point out) but the supply can and does. SA does not want to let it's supply hit the market if the market prices are low. They'll wait.

 

Your refinery issue shows that it IS a supply and demand issue. Not 100% but it's certainly a big part of pricing.

Yes, I can say it is not supply and demand because the demand is essentially a constant. The supply changes by choice, not by demand.

 

Also, we produce over 50% of the oil we use and 40% of our imported oil is from Canada.

[Clyde]

Yes, I can say it is not supply and demand because the demand is essentially a constant. The supply changes by choice, not by demand.

 

Also, we produce over 50% of the oil we use and 40% of our imported oil is from Canada.

 

Supply and demand work in tandem, right? So if demand stays relatively constant and supply goes down then you see an increase in price.

 

So in this case for the midwest we have demand staying the same but supply cut in half. Price goes up with all other factors being the same.

 

Now if the refinery comes back to full capacity and all other factors stay the same but price stays high THEN we can question supply/demand theory.

[doubledeuce]

Supply and demand work in tandem, right? So if demand stays relatively constant and supply goes down then you see an increase in price.

 

So in this case for the midwest we have demand staying the same but supply cut in half. Price goes up with all other factors being the same.

 

Now if the refinery comes back to full capacity and all other factors stay the same but price stays high THEN we can question supply/demand theory.

Do you really think there is less supply? I do not. We are using half as much gasoline than we were 10 years ago.

 

When a a utility has a production issue and has to correct it there isn't any spike in pricing, cost of doing business. The electric generation industry is doing just fine. Also, just think electric utilities cannot store electricity and save it for a rainy day like the oil companies can.

 

When you totally control the supply, you control the market.

[Clyde]

Do you really think there is less supply? I do not. We are using half as much gasoline than we were 10 years ago.

 

 

When the refinery has half of their operations shut down there is less supply.

[John Anthony]

When the refinery has half of their operations shut down there is less supply.

 

For the time being, it's an artificial shortage.

[Clyde]

Do you really think there is less supply? I do not. We are using half as much gasoline than we were 10 years ago.

 

When a a utility has a production issue and has to correct it there isn't any spike in pricing, cost of doing business. The electric generation industry is doing just fine. Also, just think electric utilities cannot store electricity and save it for a rainy day like the oil companies can.

 

When you totally control the supply, you control the market.

 

Your points about electricity are why I can't compare it to oil. Just a different world.

 

Wen you totally control the supply (because consumers haven't done anything for force change) you control the market.

[Clyde]

For the time being, it's an artificial shortage.

 

Does that matter? Unless we can force a refinery to empty its supply then it doesn't matter.

[John Anthony]

Does that matter? Unless we can force a refinery to empty its supply then it doesn't matter.

 

It only matters in the game of greed. If you had a product people desired, you would also consider cutting supply or supply propaganda. I'm amazed it took those in the oil/gas business so long to do it.