Gas prices to go up
It was a busy day today in the local paper on energy items. This AP article in the Star Trib shouldn't be any surprise to anybody keeping up on energy issues. I filled up the car yesterday (we drive so little these days that I don't think to check and almost ran out on the way to a meeting) and the price was $3.066 at the BP down the road. Sounds like we can expect another 5 to 10 cents due to the pipeline shutdown. What I'm suspicious of is that, with all the publicity it's received, the oil companies will apply the price increase early and milk a few more profits out of the system before they feel the pinch.
posted by Darrell Gerber @ 11:13 AM
4 Comments:
Aren't all the prices set on speculation though? I mean, my understanding is that all the fuel that any gas station sells any given month comes at a set price negotiated in the previous month.
So the price of gas does not reflect the cost of what it took to purchase that particular amount, but rather tha amount it will take to purchase the next month's supply ... in theory...
Perhaps I misunderstand the way most gas stations operate, but I am in the middle of an awesome article from the Chicago Trib which explores this. I'll link to it shortly...
Yesterday the gas staion I pass most often was still the same as over the weekend, $3.17. This morning it was $3.09. Twin Cities Gas Prices is reporting fairly stable prices and an average of $3.05
Gas stations, just like a coal plant that has accumulated a pile of coal over many months at different spot prices, typically sell their product at current replacement cost for the fuel.
Yep- that's why the situation with the pipeline immediately drives up prices at the pump.
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