# Preventing Price Gouging and Collusion.....



## krs (Feb 29, 2008)

.......is that really a "political" thread?

I was happy to read that the German Government decided to try to keep the large oil companies honest - it's not that the government is going to "control" prices in as "set the prices", they are just going to make sure that price gouging and collusion doesn't occur within that industry.
I can't speak for Germany, but in Canada it's uncanny how all the gas stations always have their price at the pump in step, it's also interesting how the price goes up immediately if there is an indication of a crude oil price increase but when the crude oil price drops the argument is that the lower price has to move through the system before the consumer can see it at the pumps.

I wish the Canadian and also the US government would have the balls to monitor the oil companies a lot closer.

We have had several studies done in Canada by the Government about gasoline prices and collusion and the result always is that there is no collusion....well, the average Canadian sure isn't convinced about that regardless of what the study results show.

Knut


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## Greg Elmassian (Jan 3, 2008)

As soon as you even talk about the government, you are starting a political thread, because normally (as you have above) you blame the government, and now there are "sides" and who is to blame. 

It might be said that hating the government is a bipartisan affair, and a universal feeling, but it's not. 

And if you believe the gas company aren't working in collusion, well.... 
Greg


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## krs (Feb 29, 2008)

All right, let's lock this thread too. No Problem. 
I made my comment.................... 

Would actually be nice if this was covered by the "official" rules of mls - that political posts are not allowed.


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## Pete Thornton (Jan 2, 2008)

We have had several studies done in Canada by the Government about gasoline prices and collusion and the result always is that there is no collusion 
"He who pays the Piper calls the Tune" Especially in the US.


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## lotsasteam (Jan 3, 2008)

Thanks!!!


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## Kovacjr (Jan 2, 2008)

Its all seems to be controlled by the goverment or some form of. Just look how every spring the price creeps up just in time for Memorial Day weekend. Oddly enough every fall it drops again. And the sequence continues. Or is it that in the summer oil is harder to pump and refine vs the winter? Its all a joke.


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## ChaoticRambo (Nov 20, 2010)

Just so all the facts are known before anyone gets all upset at the US government, you might want to recognize that the US has one of the cheapest prices of all first world countries.

Lets get some facts:

-the US is the worlds 3rd largest producer of crude oil

-52% of the oil we import comes from the western hemisphere

-29% of the oil we import comes from Canada

-Only 22% comes from the Persian gold

-The cost of gas is most widely affected by the WORLD oil demand




Now lets look at how our gas prices compare to those countries you say are doing things correctly:

http://chartsbin.com/view/1115


just my 2 cents


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## Ron Hill (Sep 25, 2008)

The AAA Daily Fuel Report shows the average price of regular today at $3.803. The price of a barrel of oil according to Bloomberg's is today at $102.59. There are 42 gallons in a barrel of oil. $102.59/42 is $2.44 a gallon to find, drill and extract the oil. One barrel of oil will produce one gallon of gas. So 64% of the price goes as a return on the investment of finding the oil. One deep water rig can cost $100 million dollars to bring in a well in 100 days. 50 cents a gallon is taxes. Transportation, refining and retailing is $3.803-$2.44-.50 or 86 cents. But remember that oil prices are not controlled by the oil company, but the commodity market, which is regulated by the federal goverment. 
Ron


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## Amber (Jul 29, 2011)

And the oil companies control the government oil policies with their massive special interest money. Corporate fascism works quite well for the oil companies.


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## Mik (Jan 2, 2008)

Don't forget speculation plays a huge part in energy cost. When other markets are slow more money gets put in commodities. When there is any hiccup in the Middle East (and there are plenty at the moment) folks bet that there will be a future supply disruption and bid higher... causing a price spike. 

The big speculators don't care if the average Joe gets hurt as long as they make their next million.


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## pete (Jan 2, 2008)

Well put mik. Tell it like it is.


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## W3NZL (Jan 2, 2008)

And don't forget, its an election year, gas prices will be going down , until after the election....
Neither of the political parties wants the gas price issue on their plates in an election year...
Paul R...


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## krs (Feb 29, 2008)

Posted By ChaoticRambo on 03 May 2012 07:52 PM 
Just so all the facts are known before anyone gets all upset at the US government, you might want to recognize that the US has one of the cheapest prices of all first world countries.

Lets get some facts:

-the US is the worlds 3rd largest producer of crude oil

-52% of the oil we import comes from the western hemisphere

-29% of the oil we import comes from Canada

-Only 22% comes from the Persian gold

-The cost of gas is most widely affected by the WORLD oil demand




Now lets look at how our gas prices compare to those countries you say are doing things correctly:

http://chartsbin.com/view/1115


just my 2 cents



We have a saying...."Don't confuse me with the facts"

But seriously - it's the price fixing and collusion between the oils companies that I have a problem with, not the price difference between the US and Europe or the location from where the oil is obtained.

If one relates that to our trains -

First of all, the selling price of a Large Scale item varies from dealer to dealer in the range of dealer cost + some percentage to Manyfacturer Suggested List, sometimes even a bit more - but it's not that the price of a Large Scale loco costs the same everywhere within a few dollars. In my neck of the woods the price of gas is always the same between "competing" companies - prices move up and down in step.


And secondly, if a Large Scale manufacturer announces a price increase, let's say Aristocraft announces that as of June 1 their dealer cost will be 10% more, if the Large Scale dealers reacted like the oil company retail outlets, the price of these Aristocraft items would increase immediately on May 5th and all dealers would set their new prices for May 5th at the same ratio between themselves as they had before.


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## harvey (Dec 30, 2008)

So how much is a bottle of water??
Cheers.


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## Torby (Jan 2, 2008)

An ounce of gold buys the same amount of oil today as it did in 1970. High oil prices aren't OPEC's fault, we've done it to [email protected] url(http://www.mylargescale.com/Providers/HtmlEditorProviders/CEHtmlEditorProvider/Load.ashx?type=style&file=SyntaxHighlighter.css);@import url(/providers/htmleditorproviders/cehtmleditorprovider/dnngeneral.css);


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## Pete Thornton (Jan 2, 2008)

it's the price fixing and collusion between the oils companies that I have a problem with 
I think you are over-stating the problem/issue. Every competitive industry appears to do price fixing - but that's just good competitive pricing. Gas stations on opposite corners of the street always sell for the same price, or why would anyone go to the one with higher prices. That doesn't mean the station down the street is at the same price. 

Milk in the supermarket is the same price in every one in town - because they check each other's prices. One decides his profit is too low so he raises the price - the rest breath a sigh of relief and follow suit. 

The real 'collusion' occurs (imho) in the contracts between oil companies and the corner service station. They have to adjust prices upwards as soon as the oil co raises prices - not when the price increase trickles through the system (pipeline?) Of course, the local guy doesn't care - he gets to make a higher profit for a few days. 

but it's not that the price of a Large Scale loco costs the same everywhere within a few dollars 
Oh No? Well, there are differences because dealers are different sizes and have a different mix of internet vs walk-in sales. Profits are different for each. And the seller may decide he wants more profit. But did you notice the nubmer of sellers/dealers is dropping? Soon there will be a couple of internet shippers ["Amazon Hobbies" ?] and that will be it. The prices will work in lock-step from then on.


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## krs (Feb 29, 2008)

Posted By harvey on 04 May 2012 01:01 PM 
So how much is a bottle of water??
Cheers.

Last case I bought was $2.99 for a case of 24 500ml bottles.
I wondered if that even covered the cost of handling and shipping.


But that is not the issue - the price of water varies quite a bit from store to store, there is no collusion or price fixing - at least not obvious the way it is with gas.


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## Pete Thornton (Jan 2, 2008)

Neither of the political parties wants the gas price issue on their plates in an election year 
And that's my pet peeve. Ignoring political lobbyists or oil company collusion - when is someone going to point out that we're getting a really cheap ride? The gas tax hasn't increased for years and the transportation fund is out of $. Hence the bridges fall down. 

However, there's a limit to how many roads you can build using that 18% gas tax. In the urban environment, it would be better for everyone [what a socialist concept - good for everylone!,] if the gas tax went up and the money was used to provide better public tranport - like the rest of the world has. The roads would be less crowded and we'd all be more relaxed. (I didn't say 'more trains' but that's one of the better options.) 

I'm still waiting to see the bumper sticker that says "More Gas Tax for Trains = Fewer Cars in front of You".


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## Pete Thornton (Jan 2, 2008)

the price of water varies quite a bit from store to store
Oh Yes? Not around here it doesn't - over the long term. The variations are entirely promotions from the vendors or loss-leaders by the store. In general it is $4.99/case (24x500ml) from all suppliers in all supermarkets. 

P.S. How come you aren't complaining about the un-american *metric *bottle size? ;-)


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## krs (Feb 29, 2008)

Posted By Pete Thornton on 04 May 2012 03:52 PM 
it's the price fixing and collusion between the oils companies that I have a problem with 
I think you are over-stating the problem/issue. Every competitive industry appears to do price fixing - but that's just good competitive pricing.
I don't find that at all for other products - the only other one like that I can think of is furnace oil, but even that varies by about 10% from dealer to dealer, at least here.
With furnace oil I have another problem - it's essentially the only product I buy where I can't decide if the price is acceptable to me.
With gasoline, I can decide to fill up tomorrow or the day after if I think the price will drop (and my tank isn't empty, but that is my own management issue).
With furnace oil, the company shows up, fills the tank whenever they think it's appropriate and sends you the billfor wahtever they decide to charge.

As to other products - I just bought a few SanDisk 16GB flash drives for $14.95 each.

Other makes were priced all the way up to $29.-; another store had the identical SanDisk Flash drives I bought for $14.95 on "super special" for $19.95.
Wide range in pricing - and the computer industry is as competitive as any.


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## Kovacjr (Jan 2, 2008)

We have an account with a local gas station for our fuel for the business. We have had a few conversations about prices in the past and even they feel that its priced too high. And they are not even making any decent money! Something like .06 per gallon on average. The supplier tells them how much to charge each week and also tells them what they will pay for fuel. Now with that said the current barrel price in comparison to the same barrel price years ago the price per galon "should" be under 2.00. Now the difference is the amount of road taxes per gallon added on by the goverment. And this comes direct from their records of 20+ years at the same station. Of course with the increases in insurance over the last 2 years they have just closed the fuel part of the business and now is just a repair shop.


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## Chris Scott (Jan 2, 2008)

Posted By Torby on 04 May 2012 03:22 PM 
An ounce of gold buys the same amount of oil today as it did in 1970. High oil prices aren't OPEC's fault, we've done it to [email protected] url(http://www.mylargescale.com/Provide...ad.ashx?type=style&file=SyntaxHighlighter.css);@import url(/providers/htmleditorproviders/cehtmleditorprovider/dnngeneral.css); 



Gold 1970 ~$36. oz. Barrel oil 1970 $3.60 = 10 barrels per oz. gold.


Gold 2012 ~$1700 oz. Barrel oil ~$100 = 17 barrels per oz. of gold


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## Bob in Kalamazoo (Apr 2, 2009)

"More Gas Tax for Trains = Fewer Cars in front of You"

Hey Pete, why don't you have some bumper stickers like that made up and sell them? I'd buy a few of them, two for my two cars and a few for friends. I like it.










Bob


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## SD90WLMT (Feb 16, 2010)

Ain't inflation fun... 

42 years from $3.60 to $100.00, 

and wages can not match this change! 

Dirk


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## krs (Feb 29, 2008)

Posted By SD90WLMT on 05 May 2012 01:00 PM 
Ain't inflation fun... 

42 years from $3.60 to $100.00, 

and wages can not match this change! 

Dirk 


This isn't inflation - that's price speculation with gold and oil

Adjusted for inflation in the US, the $3.60 in 1970 becomes $21.28 in 2012.

http://www.bls.gov/data/inflation_calculator.htm


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## bicyclexc (Mar 31, 2010)

Its not inflation or speculation, The price of gold and oil rises because there are 3 billion (and counting) more people in the world who want to have some of the pie since 1970. This is a simple Econ100 supply and demand example, Demand goes up, supply goes down, what happens to price? Get used to it America, its only gonna get worse.


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## Randy Stone (Jan 2, 2008)

Posted By bicyclexc on 05 May 2012 01:45 PM 
Its not inflation or speculation, The price of gold and oil rises because there are 3 billion (and counting) more people in the world who want to have some of the pie since 1970. This is a simple Econ100 supply and demand example, Demand goes up, supply goes down, what happens to price? Get used to it America, its only gonna get worse. Interesting how people forget the fact that world wide, there are many more people looking to buy the same comodities.

The internet has brought the price down on a lot of things like items bought and sold on Ebay and other online websites.

Maybe we need fuel futures bought and sold on the internet by the consumers.


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## krs (Feb 29, 2008)

Posted By bicyclexc on 05 May 2012 01:45 PM 
Its not inflation or speculation, The price of gold and oil rises because there are 3 billion (and counting) more people in the world who want to have some of the pie since 1970. This is a simple Econ100 supply and demand example, Demand goes up, supply goes down, what happens to price? Get used to it America, its only gonna get worse. 
Hmmmm....

Ever hear of OPEC?
Or this?

http://www.reuters.com/article/2007/11/19/us-gold-fixing-idUSL0728994920071119


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## JEFF RUNGE (Jan 2, 2008)

If you want to stop the oil speculators, just pass laws requiring them to "store" the quantity they "own" complete with the all the EPA certifications & regulations.. Your tanks are where?


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## Dr Rivet (Jan 5, 2008)

Jeff 

And cut all the money off to the Congesscritters from the commodities brokers? What are you thinking?


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## JEFF RUNGE (Jan 2, 2008)

Jim, 

LOL, good point.


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