Letter to the Editor
Enlighten us
Published Wednesday, August 13, 2008
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To the editor:
Let’s see if I have this right: The price of a barrel of oil rose daily for quite awhile, and the price of gas at the pump also rose daily to meet that increase. Over the last couple of weeks, the price of a barrel of oil has dropped daily but the price at the pump remains the same … hmm. Can someone enlighten us?
Community Discussion
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simple they got the price up and are making money, why bring it down, till they hafta. its just a way of making more money while the average person suffers to buy fuel
Is the News Miner going to print one of these a day?
Why?
We don't need to be reminded daily that we're being gouged.
Birdie...
Do you work for big oil? Seriously, why not print it, everyone is sick and tired of the price of fuel!
I agree, if I have to pay it everyday why not say something instead of grumbling under my breath and bending over to take it at the pump? We should all scream real loud and see if someone hears it. Should this be synchronized? Lets say that at the 11th minute of the 11th hour we all go outside and yell just to show it...
I am more sick of the volume of people who fail to do even the simplest of research on their own into the issue and fail to grasp the most basic tenants of economics. There are lots of people who believe Flint Hills exists just to make gas, diesel and heating oil for the Fairbanks area.
Birdie Birdie Birdie...
Figure it out. Need a clue? People are sick of it. I was on the phone to my Father just this am and he asked about the price of fuel(which he does every time I talk with him) and do you know his response? He laughed (which he does every time every time I tell him about the price of fuel)!
Kudos to the DNM! I hope they print every single letter they receive about the rediculous price of fuel we pay.
And just maybe Birdie you should join your flock and head South.
Thanks Pavel, I did my research and here's what I learned.
Everyday we watched the price of oil per barrel rise. Everyday we watched the price of gas increase right along side of it. Now the price of oil is falling but the price of gas is not. Simple economics suggest PRICE GOUGING.
Here's another "tenant of economics". If people are willing to pay, why lower the price? Recent times have shown that we will pay what ever the price for gas. We need it. Therefore as a "Big Oil Company" good economics suggest there is no reason to lower the prices. If we Alaskans are willing to (required to) pay 4.60 a gallon why sell it for 2.60 a gallon. Big Oil has us on the ropes and they can see that we can take a punch so they will continue to beat us until someone rings the bell.
Alaska is the last foot hold for Oil companies. They are banking on the precept that "Everything is more expensive in Alaska". They expect us to roll over and continue to take it. The fact is Alaska has historically paid 20 cents more per gallon than the national average, today we are paying almost a dollar more. GOUGING
Let's not forget tourist season. People have already invested millions into their Alaskan Vacations. The high price of fuel has already been budgeted in so beleive me the oil companies are going to get every penny they can.
So the true "Economist" here is Big Oil. They are getting away with price gouging. They are crimials and should be held accountable.
I'm in the process of sharing all my information with the Attorney Generals office right now. It will be interesting to see how fast the prices start dropping.
That isn't research, that is ranting at the percieved cause of the current prices of gas.
Research involves finding out where the crude is going, who is refining it into the products we buy at the pump, what are the costs involved in shipping crude and finished products, what are profit margins at the pump.
There are so many things that go into getting a gallon of gas or low sulfur diesel to a pump in Fairbanks, just screaming "PRICE GOUGING" isn't research.
The investigation launched by Palin will hopefully provide the answer that everyone wants, including me. I don't like these high prices any more then you do. If I am wrong on the reasons, I will be the first in line to eat my words. I just don't believe I am.
Time will tell.
In the mean time, we don't need more of these same kinds of letters. Just pick one and leave it up.
Missing the point...
If you, Birdie and Pavel, are sick of reading these redundant letters, perhaps it won't be too long and those who can do something about the price of fuel in Fairbanks will get sick of it as well. Perhaps then they will do something about it.
Until then, may I suggest you not read said letters. And the real question I beg to ask is if you are indeed so frustrated with these letters, why would you waste your time commenting on them.
Again, thank you Fairbanksgas for your work on this issue. You have benefited all of us in the area by what you are doing.
i'm curious to see what the price of gas will get to next summer. or how about if israel attacks iran over the nuclear bomb building thing and iran decides it needs to take an oil tanker out going through the straits of hormuz? who knows where the price of oil will go then?
I would suggest, in addition to writing letters to the editor, we should all just drive less if we can. If this is a case of price gouging (thats how I see it too, but I'm not an expert) the loss of profits will make more of an impact on gas companies then a whole bunch of complaints will.
Fairbanks Gas-
You are honestly involved with the Attorney Generals office on this subject? Do you mind if I ask as to what information you can offer them that they can't find themselves?
And I agree with Pavel on one part of this. People need to at least research simple economics, and realize that this is a global industry, not "Big" Oil as so many like to call it. Then come back and complain...and I will be the first to listen.
One of the most disturbing lines I read during the spike in oil prices from yahoo.com news was, "The price of crude oil jumped again today amid worries that the price of crude oil is going up." So it's going higher because you think it's going higher? How does that make sense?
Also, with crude oil down $7 in 3 days it's actually gone up almost $9 over the last two with Russia in conflict with Georgia and a shorter than expected supply of gasoline in the U.S. Who knows, we'll probably have $200bbl next July with August prices of $150bbl.
So when is the electric car gonna be ready for production?
I think the fact that the average price has fallen to .70 a gallon less than we are paying is research enough to say something is not right here in Alaska. It fell .30 a gallon in just one week while I was visiting Ohio earlier this month. I do agree, as I have said for months, until we drive less and stop buying their product at such high prices they will continue to make as much money as they can from us. Everything you read and hear from the oil industry and the economists say price is driven by demand. If we stop demanding so much of it, the price will come down. It has happened everywhere else, but not here. Based on my personal observations, there doesn't seem to be any less traffic on our roads, so I'd say we haven't yet reached the point where people are fed up enough to STOP DRIVING. Go to work, get groceries, stay home. It won't take long if we all do that for the price to drop.
AKLOWN
Alaska is the last foot hold for Oil companies. They are banking on the precept that "Everything is more expensive in Alaska".
Are you serious? There are only 670,000 people in the whole damned state. That's not much of a toe-hold. In fact it's only very slightly more populous than the metropolitan area of Boise Idaho...in the whole state...an area 1/5 the size of the entire lower-48.
I imagine we're still suckin' off a supply of gas that was purchased at higher rates. Once we get through that supply, we'll get to the cheaper stuff.
I agree that it's suspicious. The wind blows in Nigeria and the next morning our gas prices blow up. That's what you get with a market dominated by speculators.
You know, honestly, I have no problem with the gas at the station going up in price when the base materials go up (and it does go up immediately). My problem is when the price isn't lowered as quickly as it goes up. This isn't your standard "Free Market". There are very few options consumers have, and we can't just start up our own operation to be competitive.
If you expect me to pay more as a consumer when prices go up, I expect to pay less when they go back down. Don't want to honor that? Fine, then don't be surprised when I convert my house to wood heat, drive less, shop elsewhere in the future, etc. If you want sustained prosperity, you need to have honesty and trust with your customers, and not rip them off at every turn.
If I am a small store owner and the price of fuel that I just bought 1500 gallons of is @ $4.60 a gallon I am going to sell all 1500 gallons at $4.69 (or what ever my mark up is) Say I am at 300 gallons when they come and refill my tank, I am still going to keep my price up until I have sold those 300 gallons. then lower my price to what I bought the new fuel at. Our Fuel companies do the same. If they buy bulk fuel and keep it in a holding tank they will continue that mark up until the bulk fuel is used. It does not all change at once.
I do agree that as long as we are willing to pay these prices, nothing will change and I do believe we are getting the shaft at the pumps. But just remember that when you are getting your fuel wait a week after the price drop to see it at the pump!
Bridie, quit reading if you are tired of seeing the same complaints. If nobody complains, nothing gets down. We are paying 50 cents more a gallon that the national average, which was $3.89 this morning. If we are still using gas sent up at higher prices earlier in the year, then the price should not have kept going up all summer.
http://www.alaskagasprices.com/index.asp...
Ok maybe foothold wasn't the right word. How about "suckers". We are paying a dollar more a gallon than those in the lesser 48.
Here's some research.
Refinery. Tesoro Alaska's Kenai refinery is located on the Cook Inlet 70 miles southwest of Anchorage. Opened in 1969, the Kenai refinery has been under Tesoro's operations longer than any of the other refineries.With the capacity to process up to 72,000 barrels of crude oil per day, the Kenai refinery produces ultra low sulfur gasoline, jet fuel, ultra low sulfur diesel (USLD), heating oil, heavy fuel oils, propane and asphalt. Crude oil is delivered by doublehulled tankers through the eastern Cook Inlet and Kenai Peninsula pipelines.
Distribution. A 71-mile common-carrier products pipeline with a capacity of 40,000 barrels per day delivers jet fuel, gasoline and diesel from the refinery to the Port of Anchorage and the Anchorage International Airport. Wholesale delivery of refined products occurs at proprietary terminals at Kenai and Anchorage, a third-party terminal in Fairbanks and Tesoro's Nikiski dock next to the refinery.
There now I've done research do I have a right to complain now? You can continue to research, bend over at the pump, or work for the oil companies, what ever you like.
Further research will show, as soon as Gov Palin mentioned "investigation" prices started to drop, funny huh?
Pragmatist, well said.
Outspoken--for your theory to hold water I would think that when the price goes up the retailer should not raise the price of gas until the gas in the tank that they bought at the cheaper price is used up. That is never the case. They raise the price immediately. I know they like to use the "we paid more for what is in the ground" excuse for not lowering the price immediately, but they never say "we haven't raised our price yet because we paid less for what is in the ground." One standard would just fine, and that is all the writer is asking for.
An almost related item. Pavel in the past has mentioned how Flint Hills is losing money on it's jet fuel contracts thereby implying a need if not a right to charge excessively for other petroleum products. In contrast, the Alaska Public Utilities Commission ruled last month that GVEA should raise the residential electric rates because residential rates were being unfairly subsidized by industrial rates. The ruling says that the separate classes of service should stand alone. Don't steal from one guy to benefit another. So Pavel how is it okay for Flint Hills to do that.
FrozenAK, the Attoney General's office can find out anything I know and more. I just gave them a couple of ideas of where to start looking in order to save them a little time.
I agree 100% that we are part of the global market. That is not the current question. The question is why we are now paying $.70 - $1.00 more per gallon after 15 years of only paying 10-20 cents more per gallon. This spring when Alaska crude was at the same price it is today, we were paying $3.80 a gallon. Where is the extra dollar a gallon going?
Having seen proprietary pricing information I can tell you that the refineries are getting most of that extra dollar not the gas stations.
Fairbanksgas and others have said Flint Hills is losing money on the jet fuel contract, I have no knowledge of the contract other then Flint Hills primarily produces jet fuel to supply the military and airport.
I have never posted what you claim I posted.
lol @ interioropinion4u's statement "And just maybe Birdie you should join your flock and head South"
so you all think you're getting gouged at the gas station? and now you want the government (BIG GOVERNMENT) to investigate? what a riot.
carpool..ride the bus. better yet, ride your bike...stop acting like little heroin addicts...
Mike_Starkey -As I stated "if I was a small store owner," and did I say it was fair? no.
Also as a small store owner if I raise the price of fuel as it is delivered than NORMALLY I can off set that by charging the customer $.08 over instead of $.12 get it?
Sorry to have upset you interioropinion - I had no idea your reading comprehension was so poor as to assume I'm not disgruntled