Wednesday, April 27, 2011

Fill 'er Up!

By Rich Smith

Yesterday I stopped at the GV Chevron station and filled my tank with liquid gold. Talk about sticker shock, the pump read almost $60, and I own a Subaru. The national price of gasoline is now $3.85 and rising to $4 a gallon. Consumers want to know what is driving this sudden increase. President Obama addressed this issue last week and proposed a “study” conducted by his advisers, to answer this perplexing question. Well Mr. President, just use common sense and save us a few million tax dollars on another study.

The price of gasoline is this high because it can be. In other words, OPEC and the gasoline companies can charge whatever they want for their product and we sheep will pay it. It is called the “milk the consumer to maximize profit” theory of economics. For those who may doubt this is the case, watch for the quarterly profits announced by Standard Oil, Exxon, Shell or BP. These companies will use any handy excuse to maximize their profits. For example, because the rebels in Libya blew up a guard station, or the King of Saudi Arabia went into the hospital for a hernia operation, speculators bid up the price of oil and, in concert, the price at the pump instantly increases. Have these incidents increased oil well or gasoline production costs? No, not by one drop. When OPEC decides to increase the cost of a barrel of oil by $5, why does a non-OPEC barrel of oil produced in Wyoming or in the Gulf of Mexico have to follow suit? Because it can.

Here is evidence that we are being had. How long does it take a barrel of oil produced in Saudi Arabia to arrive at your pump in the form of a gallon of gas? Considering the storage time oil waits for shipment in the mid-East, or the time in transit on tankers, at refineries, stored in large gasoline tanks, and then finally shipped to your gasoline station, the average delay is four months. Four months worth of supply! So why is it that when a speculator or OPEC decides to increase the price of oil by $5, does the price of a gallon of gas at the pump increase fifteen cents? All that oil in transit and gasoline in storage tanks have suddenly become more valuable.

Who benefits from the windfall? Certainly not the gas station owner; the oil companies and OPEC benefit. None of that more costly oil has yet hit the marketplace, yet my pocketbook felt the result at last fill up. OPEC claims they have a worldwide surplus of oil and gasoline demand in this country is down 2%, yet the cost of gasoline is up $1 a gallon from just a few months ago. Obama’s study will do nothing to stop this fleecing of America, by OPEC and the Oil Companies. What can stop them is to buy less of their commodity.

Remember the days of gas wars, where the law of supply and demand dictated price? Let’s all use less and perhaps it will have a lasting effect. I was just figuring that a round-trip to Crouch (18 miles) for a gallon of milk costs about $2.50 for gas. That is one expensive bottle of milk. I think we will wait and combine our trips into town. If everyone did this, say cut back their purchase of gasoline by 5%, the oil companies would get the message.


  1. Never hurts to study
    Here are some ways that you can cut back on your gasoline bills each month and start saving even more money.
    Lose the Junk in the Trunk - It's a good idea to keep your car clear from clutter anyways, but when you consider that added weight can cost you money, then decluttering your car seems even smarter. So keep that junk out of the trunk that is weighing you down; such as heavy tools boxes. However don’t take out your tire iron…
    Keep it smooth - Down slam on the accelerator or the breaks. Smooth accelerations and breaking can save on your gas bill.
    Don't Speed - Going faster than 60mph can cost you as much as 24 cents per gallon for every 5mph you go over 60mph.
    Choose the right vehicle - Obviously, a more gas-efficient vehicle is going to save you money. If you have to have a big truck of SUV, be willing to pay the big difference.

  2. Cut back on Driving - Start making lists so that you can combine your trips and save on gas.
    Turn Down the Air - When you use your air conditioning, don't blast it. If it's super-hot and you need the air cooler, only leave it strong for a little while and then turn it down.
    Keep your tires properly inflated - Properly inflated tires can save you 3% on your gas.
    Tune it Up - Keeping up on tune ups can save you 4% on your gas.
    Replace Air Filters Often - You should replace your air filter either with every oil change or at least every other to help save you money.
    Carpool - Plan trips together whenever possible with family, friends or coworkers and share the gas costs.
    Remember gasoline is a gas, it evaporates. The more you heat it up or stir it up the more evaporates. Fill up when it’s cool and when filling up use the low or med speed on the gas pump.

  3. Gas prices in other countries. March 2011. Norway - $9.28 Greece $8.45 European Countries - $7.50 - $8.00 Japan - $6.30 U.S. - $3.53 Canada - $4.49
    May be it’s because of the taxes."
    Avarage Combine State local and Federal tax on a gallon of Gas is 43.4 cents in Idaho.