gas prices vs. diesel

The price that a station pays for gas or diesel has very little to do with production cost or the price of oil. Yes they will not sell it at a loss; but the stock market controls the price. You can watch the stock market during the day and predict the change in the wholesale price that will come out that afternoon.

The price of gas and diesel sold on the wholesale level changes daily. Sometimes more than that in a volatile market and is figured on the thousand of a cent. It use to be that the wholesale price came out in the afternoon and the price changed at midnight. Now the price changes at 6pm for changes in the market and then again at midnight.

A station will most times eat the cost difference of all these changes rather than changing the pumps every day; and mostly because his street price is set by the market also. A lot of times a station on one side of the street may be making .07 a gallon while the guy across the street is making .15 a gallon. The guy making .15 is not going to come down a penny as long as he is the same street price as the guy across the street.

Supply & demand is the basis for our economic system--have you ever heard what people pay for the latest gaming console for their teenage kids? Or what people pay for expensive import (and domestic) autos/trucks? Or, what about what people pay for a cup of "designer" coffee?

The US has to import about 60% of the crude oil needed to meet domestic demand. The crude oil price is set by world market factors of which the US has little if any control (other than ceasing all demand). Domestic crude production costs may or may not be lower than foreign production costs depending on drilling location, depth of water and other environmental conditions. The bottom line is that the oil companies have to buy most of the crude needed from foreign sources and the oil companies can't set the world price.

It could be argued that the oil companies could charge less for domestically produced oil but would a farmer sell his corn locally for $2.50/bushel if a foreign broker was offering $3.50/bushel?

Regarding the selling price of gas, the oil companies make pennies per gallon producing gasoline, yet the federal state and local government taxes add an average of 46 cents per gallon paid by the consumer.

To say that the gas prices of total are strictly due to who's in the white house is quite a stretch. For a little history lesson, the gas price per gallon at the start of Jimmie Carter's term was about 75 cents. When he left office it was $1.50.

And finally, I was in Italy back in 1991 and back then we were paying about $4.00 per gallon for our rental vehicles.

A supplier has to worry about several things that also affect price on a local level. They have a allotted amount of tank space. With gas ordered days in advance and already on the way in the pipe line they have to have room for this gas even if it means selling at a loss. They also have to meet their allotment amount each month or risk loosing tank storage space to someone else.

In other words if you own rights to store 10,000 barrels in a loading rack tank and only move 5000 barrels this month your allotment space will be cut.

You said that China was the worlds largerst consumer of oil. China consumes 6,534,000 bbl per day. That is a heck of a lot of oil. However, since the US consumes 20,730,000 bbl per day it makes you look both hypocritical and pathetically out of touch.