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[Tripon]

As Los Angeles drivers shelled out more than $4 a gallon at the pump in recent weeks, the state's oil refineries pocketed record amounts of money — as much as $1.17 a gallon in gross profits.

From Jan. 1 to July 6, oil refineries almost doubled the typical amount they collect on a gallon of gasoline, state data show.

California refineries reaped an average of 49.3 cents on a gallon of gasoline from 1999 to 2014, according to the California Energy Commission. But this year, the average ballooned to 88.8 cents, triggered when refinery troubles in February disabled 7% of the state's capacity at a time of low inventories.

But Tupper Hull, a spokesman for the Western States Petroleum Assn., which represents oil producers and refiners, argues that Consumer Watchdog's view and the energy commission's refiner margin calculations are overly simplistic.

Hull said the market is responding to the basic laws of supply and demand after the refinery troubles and a drop in gasoline inventories.

"The function of supply and demand work very efficiently to make sure that there's fuel at that pump," Hull said.

He said that might mean that prices rise for a period of time because of the decline in refinery capacity from plants that aren't producing gasoline and from a shortage in inventories, but it will balance out in the long run.

Consumers, Hull said, would be harmed if oil refiners operated with complete transparency because such openness would enable the kind of industry collusion that companies are accused of now.

Then, as now, oil companies attributed at least part of the price increase to problems at California refineries.

This time, the primary catalyst was a February explosion that crippled Exxon Mobil's Torrance plant, which has historically produced about a fifth of Southern California's gasoline. It might not return to service before Christmas.

http://www.latimes.com/business/la-fi-gas-profits-20150722-story.html#page=1

Sigh.

 

[speculawyer]

Uh oh . . . time for some more maintenance on a refinery!


Hey . . . if you don't like it then pick up one of the cheap compliance EVs. You can lease them for around the price of an expensive cell phone plan and they cost very little to 'fuel up'.

 

[Gentleman Jack]

But they said it was the taxes that made our gas so expensive. Why would they lie?

Consumers, Hull said, would be harmed if oil refiners operated with complete transparency because such openness would enable the kind of industry collusion that companies are accused of now.

Also, wut?

 

[DirtyManos]

Yeah such fucking bullshit.

Can't believe no fuss is even being made about it.

 

[hipbabboom]

Maybe they can use some of that profit to find out which one of them is dumping oil into Santa Monica bay

 

[John Kowalski]

Consumers, Hull said, would be harmed if oil refiners operated with complete transparency because such openness would enable the kind of industry collusion that companies are accused of now.

"If you think just being accused of something is bad, imagine how much worse it would be if we were actually guilty!"

 

[ezrarh]

If your society is dependent on a few oil companies, of course they're going to try to get as much profit as possible. Only way to win is to move away from oil dependency.

 

[DragonSworne]

If your society is dependent on a few oil companies, of course they're going to try to get as much profit as possible. Only way to win is to move away from oil dependency.

Or nationalize oil.

 

[Slavik81]

The cost of their inputs dropped significantly and the value of their outputs has more or less stayed the same. Shockingly, their profit has increased.

 

[Kieli]

Consumers, Hull said, would be harmed if oil refiners operated with complete transparency because such openness would enable the kind of industry collusion that companies are accused of now.

Uh..........................

 

[Fenderputty]

Shocker.

Oil all time low, gas At all time highs

 

[Stet]

Talk about gross profits.

 

[LaMeRz]

Low price of oil means refineries can buy it cheaper. They were getting killed when oil prices were high.

 

[ReAxion]

The complete transparency quote. Wow.

 

[FZZ]

Fuck this shit

We should not be paying $4+ a gallon

Fucking cunts

 

[AstroNut325]

7% reduction in supply/capacity leads to 100% profit gain? Because the markets are responding to supply and demand?"

WTF...

And that transparency quote... Mega WTF...

My next car is an EV. F*** the refineries.

 

[Liquidsnake]

Someone should be dragged before congress.

 

[harSon]

Consumers, Hull said, would be harmed if oil refiners operated with complete transparency because such openness would enable the kind of industry collusion that companies are accused of now.

This quote is fucking amazing

 

[Septimus Prime]

Time to buy a Tesla.

 

[American Eskimo]

I was told Jerry Brown and his evil liberal taxes were to blame?

 

[EMT0]

I don't suppose your state government can do anything about this, huh CA-GAF?

 

[AstroNut325]

Someone should be dragged before congress.

And do what? Fine them? Ridicule them? Pass a law that will tax the refineries more? Any action against these f***ers is only going to be passed on to the consumers as price increases.

Get an EV and give them the middle finger.

 

[PseudoKirby]

with the up and coming alternatives would the decrease in demand for gasoline make it cheaper for petrol heads like me or make it more expensive?

 

[AstroNut325]

with the up and coming alternatives would the decrease in demand for gasoline make it cheaper for petrol heads like me or make it more expensive?

More expensive. These are corporations. They are expected to bring in ever increasing revenues and profits. So if demand tanks, they will have to increase prices to bring in sufficient revenue. That or they will go suck on the tax payer dollar via some sort of subsidy to make up for the lost revenue.

 

[Fenderputty]

Low price of oil means refineries can buy it cheaper. They were getting killed when oil prices were high.

When the hell have the oil companies ever been " killed"

 

[Black Mamba]

More expensive. These are corporations. They are expected to bring in ever increasing revenues and profits. So if demand tanks, they will have to increase prices to bring in sufficient revenue. That or they will go suck on the tax payer dollar via some sort of subsidy to make up for the lost revenue.

That's not how profit maximization works. If Demand tanks, so will prices.

Prices are determined by Demand and Supply. You can't will prices into making up for one or the other. If Demand Drops, so too will prices. Raising prices in such a scenario would guarantee increased losses.

 

[Dr_Boris_Goltz]

Hey . . . if you don't like it then pick up one of the cheap compliance EVs. You can lease them for around the price of an expensive cell phone plan and they cost very little to 'fuel up'.

How much is an expensive cell phone plan?

 

[AstroNut325]

That's not how profit maximization works. If Demand tanks, so will prices.

Prices are determined by Demand and Supply. You can't will prices into making up for one or the other. If Demand Drops, so too will prices. Raising prices in such a scenario would guarantee increased losses.

http://boe.ca.gov/sptaxprog/reports/mvf_10_year_report.pdf

7% less consumption over a 10 year period, but nearly a 40% increase in price of regular unleaded in California. Can you explain that?

 

[Fenderputty]

http://boe.ca.gov/sptaxprog/reports/mvf_10_year_report.pdf

7% less consumption over a 10 year period, but nearly a 40% increase in price of regular unleaded in California. Can you explain that?

Well mamba is correct. That's generally how demand and pricing works. Not the way you described it.

Oil companies are unique in that people need oil. It's not a standard consumer good.

 

[ReAxion]

*thinks back like a decade to economics class*

uhh, inelastic demand? that's a thing, right?

 

[A Fish Aficionado]

No shit they're profiting.

As always they'll blame the taxes and environmental reasons for having a special gas blend.

ugh.

Low price of oil means refineries can buy it cheaper. They were getting killed when oil prices were high.

They were making record profits with higher prices.

 

[Fenderputty]

*thinks back like a decade to economics class*

uhh, inelastic demand? that's a thing, right?

Heh yeah. It's been a while for me too.

Other than medical, oil is as close as one can get to a perfectly in elastic demand.

 

[Black Mamba]

http://boe.ca.gov/sptaxprog/reports/mvf_10_year_report.pdf

7% less consumption over a 10 year period, but nearly a 40% increase in price of regular unleaded in California. Can you explain that?

Consumption is not Supply. Consuption is the output of Demand and Supply (as is price).

If Supply is constant and Demand goes up, prices go up and consumption goes down,

In other words, it's exactly as the Classical Model would predict.

 

[speculawyer]

How much is an expensive cell phone plan?

Well . . . here are some EV deals available in California where this oil price problem exists:

Electric Cars
The 2015 Chevrolet Volt has been out of production since May, as General Motors prepares to launch the all-new 2016 model.

But there are apparently still some 2015 models left on dealer lots, and they continue to get aggressive incentives.

The Volt is now available to lease for $197 per month for 39 months, with $2,500 due at signing and an allotted 10,000 miles per year.

This offer is only valid in California, Connecticut, Massachusetts, Maryland, Maine, New Jersey, New York, Oregon, Rhode Island, and Vermont, and expires August 31.

Chevy is also offering a $2,500 loyalty bonus credit, which effectively erases the down payment.

The brand's other electric car also continues to be a good deal.
A 2015 Chevy Spark EV lease can be had for $138 for 39 months, with nothing due at signing and a cap of 10,000 miles per year.

Those are essentially the same terms offered last month, although the monthly payment is now $1 less. This offer expires August 31.

Fiat is also extending the deal offered for the past two months on its 500e electric car.

It remains $169 per month for 36 months--with $1,999 due at signing and an allotted 12,000 miles per year--through August 3.

Note that the Spark EV and 500e are low-volume "compliance cars." Both cars are sold in California and Oregon, while the Chevy is also available in Maryland.
http://www.greencarreports.com/news/1099196_best-deals-on-hybrid-electric-diesel-cars-for-july-2015

Spoiler

Avatarquoteme.jpg

*thinks back like a decade to economics class*

uhh, inelastic demand? that's a thing, right?

Yep. The only thing you can put in your car is gasoline. And the only thing they make gasoline from is oil.

Electricity . . . it can be made with solar PV, CSP, onshore wind, nuclear, natural gas, geothermal, biomass, hydropower, etc. Hence a much more stable price.

Spoiler

Fuck coal.

 

[TheOMan]

But they said it was the taxes that made our gas so expensive. Why would they lie?



Also, wut?

That quote is amazing, wow.

 

[DarkFlow]

Consumption is not Supply. Consuption is the output of Demand and Supply (as is price).

If Supply is constant and Demand goes up, prices go up and consumption goes down,

In other words, it's exactly as the Classical Model would predict.

Doesn't Texas use the same shit?

 

[Black Mamba]

Doesn't Texas use the same shit?

I changed what I said to be more accurate.

As for Texas, maybe. Never did research but I've heard Cali's was unique to here.

 

[xbhaskarx]

It's infuriating to pay around $4 when the rest of the country is paying under $2... and I drive a Prius.

Time to buy a Tesla.

That $30k Tesla cannot arrive soon enough.

 

[SlickShoesRUCrazy]

Fucking crooks.

 

[unholyrevenger72]

Doesn't Texas use the same shit?

Texas is flat enough to have it's smog blown away, meanwhile LA smog is trapped by a ring of mountains and a temperature inversion keeping the smog from being blown over the mountains.

 

[ShowDog]

Fuck these oil companies right up the ass.

 

[Suikoguy]

It's really fucked up when "accidents" and "mistakes" can cause more profit. That only happens in industries with insufficient competition.

Those profits should be taxed at significantly higher rate since they were basically obtained via "unintentionally" reducing supply.

 

[EloquentM]

Just filled up my tank today. Fuck this shit.

 

[DarkFlow]

Texas is flat enough to have it's smog blown away, meanwhile LA smog is trapped by a ring of mountains and a temperature inversion keeping the smog from being blown over the mountains.

What does that have to do with anything?

 

[Dr_Boris_Goltz]

Well . . . here are some EV deals available in California where this oil price problem exists:

Electric Cars
The 2015 Chevrolet Volt has been out of production since May, as General Motors prepares to launch the all-new 2016 model.

But there are apparently still some 2015 models left on dealer lots, and they continue to get aggressive incentives.

The Volt is now available to lease for $197 per month for 39 months, with $2,500 due at signing and an allotted 10,000 miles per year.

This offer is only valid in California, Connecticut, Massachusetts, Maryland, Maine, New Jersey, New York, Oregon, Rhode Island, and Vermont, and expires August 31.

Chevy is also offering a $2,500 loyalty bonus credit, which effectively erases the down payment.

The brand's other electric car also continues to be a good deal.
A 2015 Chevy Spark EV lease can be had for $138 for 39 months, with nothing due at signing and a cap of 10,000 miles per year.

Those are essentially the same terms offered last month, although the monthly payment is now $1 less. This offer expires August 31.

Fiat is also extending the deal offered for the past two months on its 500e electric car.

It remains $169 per month for 36 months--with $1,999 due at signing and an allotted 12,000 miles per year--through August 3.

Note that the Spark EV and 500e are low-volume "compliance cars." Both cars are sold in California and Oregon, while the Chevy is also available in Maryland.
http://www.greencarreports.com/news/1099196_best-deals-on-hybrid-electric-diesel-cars-for-july-2015

Spoiler

Avatarquoteme.jpg

Yep. The only thing you can put in your car is gasoline. And the only thing they make gasoline from is oil.

Electricity . . . it can be made with solar PV, CSP, onshore wind, nuclear, natural gas, geothermal, biomass, hydropower, etc. Hence a much more stable price.

Spoiler

Fuck coal.

Damn I wish I knew about this while I had a steady income.

 

[Tripon]

Gas prices are a blowup.