Fuel Price Pro

Alan Peter asked:


The issue of how gas from auctioned acreages should be priced, thrown up by a set of legal tangles between entities controlled by the Ambani brothers on the one hand and Mukesh’s Reliance Industries Ltd and NTPC, have divided policymakers. A number of MPs cutting across party lines and Congress functionaries have written to PM, Congress chief and oil minister opposing Andhra chief minister YSR Reddy’s demands on the issue.

Reddy has written a series of letters to PM on pricing of gas from RIL’s Andhra offshore field. These letters question the formula for working out the price, demand a preferential allocation for the state — which, industry analysts say is like a first right of use — and Central intervention in pricing.

Reddy’s letters have evoked protests from MPs representing the Congress, RJD, BJP, Samajwadi Party and the JD — several of whom are members of House panels on petroleum — and some Congress functionaries. The essence of these letters appears to have indirectly raised a debate over the country’s federal structure.

“…the Constitution Bench of the Supreme Court in a special reference case of 2001 in its judgment dated 25th March, 2004 clarified that only the Central government has exclusive competence to enact any legislation pertaining to oil and natural gas. Hence, the demand of AP Government on KG basin gas pricing and preferential allocation of gas is not justified and is unconstitutional,” says one letter.

The letters also oppose any move by the government to artificially cap prices. Such a move will amount to Centre going back on its promise of allowing investors freedom on pricing with government approval, hamper efforts to attract investments in exploration and reduce the government’s income from new discoveries.

Some letters point say Reddy’s demands amount to taking “ undue interest” in a corporate dispute and point out that demand for cheap gas is unfounded as many of the fertilizer and power companies are buying gas for a higher price from other sources.

Matthew Paolini asked:


Gasoline prices have been steadily climbing for quite a while - though the costs around the nation have dropped slightly in the past week — and are threatening to become ‘the’ story of the summer. The countrywide average price for a gallon of unleaded regular gasoline now stands at just above 3 dollars, up a full 25 cents from one year ago.

Many are blaming the ‘Big Oil’ companies, who are reaping huge profits from the high gas prices. However, in an industry as complex as the oil/gas business it is difficult to figure out exactly what the causative factors are. Analysts have run the gamut, from accusing oil companies of pure greed, to complaining about the lack of domestic oil refining capacity, to acknowledging that the supply of oil may be decreasing globally — although those who believe the latter are certainly in the minority at present.

Gasoline consumers nationwide are justifiably worried about the rising prices. Recently in Texas the average price of retail gasoline rose for a 14th straight week. A weekly AAA-Texas gas price survey showed uneven price trends, with costs reaching record highs in some areas but going lower in others. AAA spokeswoman Rose Rougeau said that Texas cities Amarillo and El Paso recently set new record highs, while costs edged lower in eight other cities. Rougeau asserted that strong consumer demand, reduced domestic output because of refinery issues and lower gas imports apparently are all working to keep prices high.

In nearby Arizona, gas costs also recently rose for approximately 14 week in a row. According to an AAA-Arizona survey, the statewide average for a gallon of self-serve unleaded regular was 3 dollars and 9 cents per gallon. That’s a penny below last summer’s highest price, and getting closer to the all-time record of 3 dollars and 13 cent per gallon set in September 2005.

In relation to the theories of why gasoline costs keep going higher, the shortcomings in oil refining capacity seems to be the most popular response. Some industry observers blame Congress, saying that the legislators are preoccupied with forcing domestic automobile companies to meet unreachable targets for fuel efficiency, while not taking the time to address the oil refining issue. On May 8, the Senate Commerce Committee voted to raise fuel economy standards to an average of 35 miles per gallon in 2020 for cars and light trucks, with standards rising by 4 percent annually until 2030.

According to some industry commentators, Congress has discouraged the construction of new oil refining capacity through proposed legislation that punishes refiners when prices rise, that levies extensive and expensive permit requirements for construction of new refineries and expansion at existing sites, and that allows for a degree of tort risk.

Construction of more refineries would certainly ameliorate the problem of supply, but because they can be so damaging to the surrounding environment, it is very problematic to find a community that will approve of a new refinery. Under the logic of ‘NIMBY’ (Not In My Backyard), consumers like to purchase gasoline at low prices, but they don’t want a refinery close to home.

John Reed asked:


Unless you ride a bicycle or walk where ever you go, you have certainly noticed that gas prices have sky rocketed. Trend data leans toward them continuing to do so and that seems to be a given. We’ve all felt the reluctance to look at the price total display on the fuel pump as we fuel up. Many of us refuse to look at the read out until the fueling operation is complete and then we balk as the amount spent is realized. This reaction is common due to the fact that most people prefer the quick shock of seeing the price, as opposed to a gradually increasing pain of watching the total grow as fuel is pumped. It just hurts to see that much money go out of the window for what could amount to a single trip. To endure this infringement on the household budget, many drivers have elected to use varying tactics to relieve the financial pressures presented by this unwelcome increase in fuel prices.

Tactics such as driving less, carpooling, low price gas shopping, shopping online, and electing for public transportation, have all been used in an effort to offset the effects of rising fuel costs. However, with all of these options come the same feeling of inconvenience and hindrance. When you aren’t able to drive as you wish, it’s then that you come to appreciate the convenience of driving one’s personal vehicle. For many, the sense of freedom is not only gone, but with substantial oil deposits becoming harder and harder to find, and interruptions to oil production due to wars, weather and human will, regaining that freedom seems unclear at best. While the nation has not needed to resort to rationing fuel, many households haven’t been as fortunate. For many, it is a daily decision whether to travel or not. “Do I go to the store now, or wait until other tasks require me to drive in the vicinity of the store?” “Do I have enough fuel to get there and back without having to fill up again?” Questions similar to these are common in most middle and lower income households. Seven out of ten people surveyed, admit that higher gas prices have affected their driving habits. Four out of ten drivers polled admit to changing travel plans such as vacations, trips and entertainment related maneuvering due to higher gas prices. As many consumers have found, attempting to drive less does not always work, as life demands travel. Six out of ten people surveyed say they have redirected money ear marked for other things to purchasing fuel for their vehicles.

This redistribution of funds within the average household is telling, in that the consumers lifestyle is directly being affected buy the sharp rise in gas prices. It’s no longer just about “go or don’t go.” For many, it is about “have or not have”, and these significantly differ in their scope. It is one thing to simply say “well I won’t go to the store this time.” But it is a totally different thing to say I won’t go to the store because I spent most of my money on gas.” That being said, many drivers are turning to the Internet as a means of purchasing items and accomplishing tasks while minimizing their fuel expenditures. A new resource for supplementing one’s fuel budget called Gas Money Toolbar is changing drivers focus from merely lowering fuel expenses to actually increasing the size of the driver’s gas budget. The Gas Money Toolbar is providing a means for drivers to pay for the higher gas prices with less of a burden being placed on their household finances. Through its sister dot com website TypoBounty, GasMoneyToolbar dot com presents the user with the opportunity to earn money for gas by helping locate and report errors on the websites that they visit. With average two dollar bounty offered for reported errors, users are able to earn money for gas relatively quickly. “I have been to this gas station 3 times this week” says Larnell White, “I haven’t seen the same price yet. This is madness.”

“The average driver can earn enough money to fill up his/her gas tank in a couple of hours of surfing the web”, says Douglas Angston, ‘that’s appealing when you fill up twice a week at $54 each.”

“Users need gas money, website owners need web traffic and the internet needs correcting.” Says John Michaels. “This approach combines and provides for these differing needs, while merging them into a workable arrangement that benefits everyone. The Gas Money Toolbar idea is essentially solving three very high profile problems at the same time.”

Consumers can feel empowered once again by the ability to fill their fuel tanks without totally destroying their household budgets. Since they are surfing the Internet for some reason anyway, consumers simply help their favorite websites be better by pointing out the errors they encounter. The websites enjoy rich amounts of traffic and correct their errors promptly to prevent their image from being damaged. It is a win win win situation for all parties.

Matthew C. Keegan asked:


As autumn weather spreads across the lower forty-eight states, gas prices and temperatures seem to be dropping in unison. After pushing above $4 per gallon early in the summer, prices have been gradually retreating and have dropped to below $3 per gallon in some places. This is good news for drivers who have been especially squeezed at the pump all year.

But, not all areas are feeling the effects of lower gas prices, particularly in some parts of the Southeast which were hit hard by pipeline shutdowns due to Hurricane Ike in September. In Raleigh, the average price of a gallon of regular gas is still about $3.89, while in Corpus Christi prices are now average a full dollar less at $2.89 per gallon. Indeed, outside of Alaska and Hawaii – two states which consistently charge the highest rates – cities like Charlotte, Atlanta, and Durham are paying the most for gas.

Since peaking around $150 for a barrel of oil this past summer, price have dropped below the $100 per barrel level and seem to be heading even lower. A recent spike in prices in late September due to the economic meltdown have eased, suggesting that prices will eventually drop below $90 per barrel. With the meltdown, US consumption continues to drop, further pushing prices downward.

Yet, it is the Southeast which is having the most difficult time seeing lower prices, thanks in part to disruptions from Hurricane Ike which whacked the Texas coast in September. A major pipeline from Texas that serves the Carolinas and Georgia was cut off, forcing gas stations to shut down or ration out what they had. To this day, many independent gas stations are without fuel, waiting for supplies to be restored which should happen later this week. Once gas has been made widely available, then prices will begin to drop, perhaps by 50 cents or more almost immediately, before settling below $3 per gallon this winter.

Top and Bottom 5 Cities

The following lists, supplied by information gleaned from GasBuddy.com, reflects the top five and bottom five cities price wise:

Top 5

Corpus Christi 2.889

Oklahoma City 2.948

Kansas City 2.998

Des Moines 3.020

Tulsa 3.053

Bottom 5

Raleigh 3.891

Charlotte 3.902

Atlanta 3.945

Anchorage 3.994

Honolulu 4.007

Clearly, the price advantage can be found in the middle of the country while the Southeast, Hawaii, and Alaska continue to pay the highest prices in the nation.

Bill Black asked:


Predictions of recessions and down-turns or up-turns are almost daily by now and many of us are becoming de- sensitized to it. Some of us know things are getting worse, foreclosure may be looming; others just find that with gas prices, food prices and other necessities increasing we are short of cash.

Everywhere, people are feeling the pinch. if you are one of the unlucky millions that is trying to avoid foreclosure, it will be essential for you to find ways to economize. Also keep a note on your fridge of the agencies that are set up to help in mortgage emergencies.

The most well known of these groups are : Project Lifeline, Hope Now, the Federal help line at 1-888-995-HOPE and NeighborWorks America. All these addresses are found on the Internet. All of these groups can help you by offering resources and usually by talking to your lender for you.

It is perhaps helpful to keep getting reminders that things could get worse, but is there anything we can do about it? Some people take the attitude that optimism pays off and others prefer to hedge their bets and start pulling in their belts.

No-one can dispute that the price of gas is affecting those of us who are working on a budget. This is one area where you really can save noticeable dollars. There are several ideas that could be adopted to save gas money.

Some households are trying the ‘back to the fifties’ routine, when there was only one car in use and sharing the vehicle was the norm. In some routines it can work better than you may think. For instance if one of you has to be at work really early, and one of you is working flexible hours, try and change your flexible hours to suit.

Another very feasible plan is for one of you to drop the other off. The passenger then walks the last part of the way to work; in these days of lighter mornings it not only saves gas money, but it could save medical bills too.

A ten minute drive to work can often represent a thirty minute walk - if you count all the parking hassles and warming up the engine etc. Go to bed a half hour sooner and get up earlier and walk!

Become more efficient in the kitchen and notice the food supply. This means that when you are coming home from work you can pick up the milk or bread that is running out. This saves you from driving down to the corner store later in the evening.

Approach a neighbor who has a child at the same school and ask if they would like to alternate pick ups from school with you. They might be visibly relieved! You may even find more car drivers ask to join you and you need only pick up once a week!

Some cities have monthly bus passes and if you are senior or a student they may even offer concessions. If you get a bus timetable you may be pleasantly surprised to find that the buses fit your routine. It can also be more relaxing to sit on a bus and read for 20 minutes than drive to work whilst yelling at other (useless) drivers!

In what other ways can money be saved? Well, some of these suggestions may make you wince but here they are anyway!

Summer is coming and we all watch less TV at this time of the year. If you downgrade your cable programs by one level you will save quite a lot of cash. (If you think that the teenagers will really complain, ask them first if they would like to pay the extra amount, in advance, each month.)

Well, now that you have the teenagers all riled up, let’s have a go at the little kids. Breakfast cereal is inordinately expensive and it has the same white flour in it as a slice of toast that is one tenth the price; they can drink the milk out of a glass.

Here is one money-saver that will make all of us wince: stop using your cell phone for anything above your contracted rate of use. The best way to do this is by leaving it at home or shut off the ring tone. Another thing to leave at home is your credit card. Instead keep a ten dollar bill in your purse or wallet. Have you ever had a spontaneous dire emergency where ten dollars wasn’t enough?

Andrew Delamar asked:


“We’re raisin’ prices and there ain’t nothin’ you can do about it”. That seems to be the sentiment of the oil and gas producers; sounding much like something out of a bad mafia movie. Gas prices, as we all know, are on the rise with no end in sight.  Rumor has it that prices may increase to well over $10 per gallon by years end. So why hasn’t something been done about that problem?  One reason is what I call the “whine and decline” factor. The corporate execs at companies such as Exxon, Shell and BP all know that once they raise gas prices a surge of whining will emerge from the populace. They also know that after a short period of time there will be a decline in the whining as people surrender to the reality that there is nothing they can do about it. This “nothing you can do about it” theory is flawed, and the corporate execs know this. They only hope you never do.  To the extreme side of solutions, if enough people petitioned the government through the electoral process to force the oil and gas execs to put a cap on how fast gas prices could rise, there would be nothing the corporation could do to stop it. The first problem with this solution is the amount of organization that would have to go behind such a campaign (although with the amount of pain people are going through right now it might be easier than we think). The second is the amount of lobbying and advertising the corporations will throw at stopping the effort.  A less extreme solution would be a directed uproar in the form of protests or millions of letters flooding their corporate offices. This type of bad PR would not sit well with corporate investors and there may be some movement in a positive direction.  The last is for us to simply drive a lot less. Don’t use their product, or use it as little as possible.  

 

One website that is devoted to helping people find ways to get around the oil and gas corporations is Fuel Razer, found at www.fuelrazer.com .   Fuel Razer offers a complaint form where you can log your opinions about the high price of gas; this form will then be made public to various people who can work to make a change in the situation. They hope to obtain over 1 million comments.

 

The second reason something hasn’t been done is what I call the “pin the tail on the blame game”.  This one is clever.  The oil and gas execs have made so many excuses as to why we have to pay so much at the pump that people are starting to either believe or agree with them.  Some will say, “Well, look at how much they pay in Europe. We Americans complain too much”.  What these individual fail to realize is that the landscape of America is different than Europe. Driving destinations are spaced further apart causing us to have to use greater amounts of fuel throughout our journeys.

 

Another factor is that no-one know who to blame. I tested a high gas price forum on MySpace to see what reactions I would receive. I wasn’t surprised at the fact that there were many angry responses. What did surprise me was the anger showed towards me.

Some were angry that I blamed the oil companies, saying that instead I should blame the auto manufactures. Others didn’t understand the dynamics of how higher fuel costs will cause the price of consumer goods to rise, calling me an idiot for suggesting it. The oil companies thrive off of such misguided anger and ignorance; it keeps the attention off of them. It is my strong suggestion that consumers educate themselves to the situation while looking for solutions. Check out sites such as FuelRazer.com for starters. Use the power of the internet, speak to others, and find strength in numbers. And soon you’ll be able to say to the oil and gas mafia, “There ain’t nothin’ you can do about it”.