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188.9 for gas. (pg. 2)
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| Wurm |
The crazy thing is that we're not even running out of it yet.
When we do, watch out. |
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| St_Andrew |
| quote: | Originally posted by DigiNut
That's not true, and that's exactly the kind of attitude that's getting us raped up the ass like this in the first place. Our government could EASILY solve this problem and return us to 70c gas prices, *IF* we gave them an incentive to. It's just that Canadians would RATHER take it up the ass than actually GET OFF their asses and do something about it.
And this applies even more to idiots who bike or take the bus and shrug their shoulders and say "oh well, doesn't apply to me, good thing I don't drive!" Price gouging on necessity products affects EVERYONE. First and foremost it's going to affect businesses which rely on trucks and transportation, which will bankrupt some businesses (if this keeps up) and drive prices up all over the market. It's only a matter of time before you have to pay more for nearly *everything*, and who knows, you might just end up getting laid off because your business can't afford to keep as many employees around with all the extra costs. |
Well, unlike other "oil crises" this current climb of price is demand driven, not supply driven like in the '70s for example. So it's not like any government could do much about it. Oil producing countries are increasing their long term production, but it's not like it's going to make a big difference with the demand in countries like China increasing a lot faster than the oil producing countries can keep up with increasing supply. At least not in the close future.
Also, things like useing the oil reserves is a very short time solotion to the problem. Although it would help for a peak like the one we are seeing now thanks to the hurricane, but it wouldn't help to get prices "down to 70c again". Correct me if I'm wrong. |
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| VERTiG0 |
| quote: | Originally posted by Jayx1
ontariogasprices.com and torontogasprices.com is showing 133.9... maybe in your drunken stupor you mistook 133 as 188? |
Hah, that's what I thought - I ran across the street and looked at the pump itself, 188.9.
It's down to 141.4 as of half an hour ago, but jesus. |
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| DigiNut |
| quote: | Originally posted by St_Andrew
Well, unlike other "oil crises" this current climb of price is demand driven, not supply driven like in the '70s for example. So it's not like any government could do much about it. Oil producing countries are increasing their long term production, but it's not like it's going to make a big difference with the demand in countries like China increasing a lot faster than the oil producing countries can keep up with increasing supply. At least not in the close future.
Also, things like useing the oil reserves is a very short time solotion to the problem. Although it would help for a peak like the one we are seeing now thanks to the hurricane, but it wouldn't help to get prices "down to 70c again". Correct me if I'm wrong. |
First of all, it's also supply-driven, because the oil tycoons artificially limit production in order to drive prices up.
Second, the demand hasn't actually gone up. If the demand had shot up, or the supply was shrinking, then a short-term solution wouldn't be viable, I agree. But in an instance of artificial price gouging, all we'd need to do is use our own oil reserves for a couple of weeks/months until the gouging idiots are forced to lower their prices again. Of course, part of this would entail foregoing the petroleum tax so the domestic oil companies can afford to take the hit. This is always what happens in the market - when prices get ridiculously high, some companies will undercut the others to get more business. It's all the taxes and red tape (not to mention illegal price fixing) that makes it impractical.
Since we regulate everything else in this country, it seems like the thing to do to put a cap on the price here (again keeping in mind that we'd be using our own reserves, so it's not like they'd be losing money on the deal) temporarily until the prices settle, then allow a gradual increase and eventually remove that cap. We already do this in other industries, i.e. housing.
And yes, it's sad that someone as passionate about a free market as myself would be advocating this, but price fixing is also illegal here. I'm pretty sure that this also goes against all international fair trade laws, so even the mighty U.N. should be worried (except that the U.N. doesn't have a very good track record when it comes to oil issues... ha ha).
Again, this is all viable, it's just not in our government's interest to do it because they're making so much money from the gas tax. People need to be lobbying them instead of taking it up the ass. Not to mention that the opposition should be standing up and demanding that something be done - I'm no fan of the Lieberals, but what the hell is Harper doing just sitting on his ass like this while Paul Martin is a sitting duck? |
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| St_Andrew |
| quote: | Originally posted by DigiNut
First of all, it's also supply-driven, because the oil tycoons artificially limit production in order to drive prices up. |
As far as I know it's only supply driven to the extent that there are many suppliers that simply can't produce as much as they could (like in the carrabean due to hurricanes), or in the middle east because of terror attacks. It's also driven up by the general fear that the middle east won't be more stable soon.
Anyhow, OPEC is going pretty much without any restrictions right now. So as far as I know there is not much of an artifical limit?
| quote: | | Second, the demand hasn't actually gone up. |
Yes it has. China and India's and some other fastly growing ecnomies are driving up the demand pretty fast, which is really the main reason for the higher prices.
| quote: | If the demand had shot up, or the supply was shrinking, then a short-term solution wouldn't be viable, I agree. But in an instance of artificial price gouging, all we'd need to do is use our own oil reserves for a couple of weeks/months until the gouging idiots are forced to lower their prices again. Of course, part of this would entail foregoing the petroleum tax so the domestic oil companies can afford to take the hit. This is always what happens in the market - when prices get ridiculously high, some companies will undercut the others to get more business. It's all the taxes and red tape (not to mention illegal price fixing) that makes it impractical.
Since we regulate everything else in this country, it seems like the thing to do to put a cap on the price here (again keeping in mind that we'd be using our own reserves, so it's not like they'd be losing money on the deal) temporarily until the prices settle, then allow a gradual increase and eventually remove that cap. We already do this in other industries, i.e. housing.
And yes, it's sad that someone as passionate about a free market as myself would be advocating this, but price fixing is also illegal here. I'm pretty sure that this also goes against all international fair trade laws, so even the mighty U.N. should be worried (except that the U.N. doesn't have a very good track record when it comes to oil issues... ha ha).
Again, this is all viable, it's just not in our government's interest to do it because they're making so much money from the gas tax. People need to be lobbying them instead of taking it up the ass. Not to mention that the opposition should be standing up and demanding that something be done - I'm no fan of the Lieberals, but what the hell is Harper doing just sitting on his ass like this while Paul Martin is a sitting duck? |
Well, not much to say. Just that I (and most economists?) think the high prices has a lot more to do with fast growing asian economies than it has to do with greedy oil companies (though they are not inocent but they are not the main reason). |
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| Euphorica |
i put in $20 last night...wasnt even half a tank. :whip:
at least I dont drive a new yorker :haha: :crazy: |
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| VERTiG0 |
| quote: | Originally posted by Euphorica
at least I dont drive a new yorker :haha: :crazy: |
Hahah you ******. My last tank, I averaged 15.9L/100km... . |
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| DigiNut |
| quote: | Originally posted by St_Andrew
As far as I know it's only supply driven to the extent that there are many suppliers that simply can't produce as much as they could (like in the carrabean due to hurricanes), or in the middle east because of terror attacks. It's also driven up by the general fear that the middle east won't be more stable soon.
Anyhow, OPEC is going pretty much without any restrictions right now. So as far as I know there is not much of an artifical limit? |
I don't understand what was unclear about my original post. The oil companies artificially limit production to drive prices up - it's got nothing to do with rules, it's just that they don't produce as much as they're able to because the prices are higher that way. The reason that companies don't do this normally is because it's anticompetitive, but the oil tycoons have obviously realized that they can make more by collaborating as a monopoly rather than competing. Since they're producing a limited resource for which there is very high demand, it is much better for them to take it slow and NOT compete with each other; that way they guarantee a nice cushy annual income and won't run out as quickly. If they competed by increasing production levels, they'd run out of oil faster and their business lifetimes would be cut in half.
I don't know why you assume that suppliers can't produce as much as they'd like - it's the exact opposite, they simply don't produce as much as they can (and would if there was any inkling of competition).
| quote: | | Yes it has. China and India's and some other fastly growing ecnomies are driving up the demand pretty fast, which is really the main reason for the higher prices. |
You're right that the Asian economies are the biggest consumers right now, but a 100% spike in demand in two weeks? Yeah... sure. And it's just a coincidence that this was timed perfectly with the flooding in the USA, right?
Since the U.S. lost a whole assload of oil, the sheiks decided to hike the prices because they know there's nothing the U.S. can do about it. But Canada CAN do something about it, and that's the whole point here.
| quote: | | Well, not much to say. Just that I (and most economists?) think the high prices has a lot more to do with fast growing asian economies than it has to do with greedy oil companies (though they are not inocent but they are not the main reason). |
Right. Again, the Asian economies are the ones driving up demand, you're completely right about that, but I'd really like to see you explain in economic terms how that could cause the price to double in two weeks. The Asian economies are responsible for prices going from about 0.65 to 0.9 this year - they are not responsible for it going from 0.9 to 1.8 this MONTH. |
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| St_Andrew |
| quote: | Originally posted by DigiNut
I don't understand what was unclear about my original post. The oil companies artificially limit production to drive prices up - it's got nothing to do with rules, it's just that they don't produce as much as they're able to because the prices are higher that way. The reason that companies don't do this normally is because it's anticompetitive, but the oil tycoons have obviously realized that they can make more by collaborating as a monopoly rather than competing. Since they're producing a limited resource for which there is very high demand, it is much better for them to take it slow and NOT compete with each other; that way they guarantee a nice cushy annual income and won't run out as quickly. If they competed by increasing production levels, they'd run out of oil faster and their business lifetimes would be cut in half.
I don't know why you assume that suppliers can't produce as much as they'd like - it's the exact opposite, they simply don't produce as much as they can (and would if there was any inkling of competition). |
That's not true anymore tho. Sure the suppliers have a good history of not producing as much as they could, but lately they are producing as much as they can.
They could boost the long term supply by investing in new stuff, but as for the short term they are doing almost everything they can.
I read a good article about this in "The Economist" a while back, but of course it's premium content now since it's in the archive :rolleyes:
| quote: | You're right that the Asian economies are the biggest consumers right now, but a 100% spike in demand in two weeks? Yeah... sure. And it's just a coincidence that this was timed perfectly with the flooding in the USA, right?
Since the U.S. lost a whole assload of oil, the sheiks decided to hike the prices because they know there's nothing the U.S. can do about it. But Canada CAN do something about it, and that's the whole point here. |
Well clearly the 100% spike now has nothing or litle to do with demand. But supply has clearly gone down since Katrina, with 90% of oil production down in the gulf of mexico, it would be weird if that didn't affect the price. So to me a current hike in gas prices is really logical and it should be to a capitalist like you too ;)
But I don't think that's what we were argueing about, but rather the long term increase in the oil price?
And as for this short term, I think our governments are doing what they can, at least all the major oil reserves in Europe and the US are being used, but it takes some time, especially since the US reserves are only crude oil and not gas.
| quote: | | Right. Again, the Asian economies are the ones driving up demand, you're completely right about that, but I'd really like to see you explain in economic terms how that could cause the price to double in two weeks. The Asian economies are responsible for prices going from about 0.65 to 0.9 this year - they are not responsible for it going from 0.9 to 1.8 this MONTH. |
Agreed. If this is what you meant, then we are argueing two different things. However this is not what you were implieing earlier. |
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| djbruuen |
| quote: | Originally posted by Euphorica
i put in $20 last night...wasnt even half a tank. :whip:
at least I dont drive a new yorker :haha: :crazy: |
not many cars where $20 bucks will get it half way. by car costs about $70 to fill at $1.30 and i know a lot of automobiles (especially SUVs) are a lot worse. so much for the pay at the pump authorize to $75 dollar fillup limit. |
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| djbruuen |
| quote: | Originally posted by Euphorica
i put in $20 last night...wasnt even half a tank. :whip:
at least I dont drive a new yorker :haha: :crazy: |
not many cars where $20 bucks will get it half way. by car costs about $70 to fill at $1.30 and i know a lot of automobiles (especially SUVs) are a lot worse. so much for the pay at the pump authorize to $75 dollar fillup limit. |
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| psychosomatica |
I'm a free market guy on this one. Remember the last time there was an oil crisis? Cars and engines got a lot more efficient after that. But lets be honest.. Everyone knew that, eventually, demand would go so high that prices would be unbearable for most OR we'd run out. Canada's GDP/economy actually improves when oil prices go up. Resource prices go up as they are consumed because people go after the easy spots first. Would you dig up gold for $10 an ounce if you could do it at another mine first for 1$. There's a whole economic net present value thing too. We are an exporter not an importer (net). Just that everyone loses, but Alberta (mostly).
OPEC has actually been producing at 100% capacity for a while now... it's not even really a cartel anymore because it cant control its own supply. Do you know how OPEC threatens its members? Saudi Arabia produces at full capacity if member countries exceed their quotas. Thus, pushing prices down if other members step out of line. I digress, as this doesn't even matter anymore.
Another thing I have with this whole oil thing is that everyone complains about 'getting ripped off'. Please. I assure you, if you're paying for the gas. You're paying the right price for it. I won't get into the whole supply/demand thingy. But if your argument is that drilling companies are making a lot of money, it's something they call 'barriers to entry' into an industry in order to compete. Coke and Pepsi are a great example: They charge $1 for a can of cola that definitely doesnt cost half as much to manufacture.
I think I'm done. I'm such a nerd. |
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