Professor Mark J. Perry's Blog for Economics and Finance
Posted 8:48 PM Post Link
Links to this post
Not in Illinois. I paid 3.98 today.
Jeez really? Is that regular?
If the real economy keeps collapsing you could see them much lower for a time.
Dodd Frank oil specuators regulation took effect in april
living in SC -- all I can say it is sweet!
...while we're still waiting to see it under $4 here in Califfeeling poor
When speculators drive-up oil prices, they raise oil supply and reduce oil demand. Moreover, speculators provide a buffer against unexpected shocks. Without that buffer, much higher oil prices or shortages can more easily take place, with severe consequences to the economy.
$4.25 here on the West Coast. We are getting hosed.
South Carolina's gas taxes are about 20 cents cheaper than IL and 30 cents cheaper than CA. There are other local factors that affect it too, but that's a big chunk of the difference.http://taxfoundation.org/article/state-gasoline-tax-rates-january-1-2012
re: taxes, true.. but their taxes are not lower than other places who have higher prices.SC prices are even lower than the areas of ND with oil strikes!Does anyone know why SC in particular has such low prices even after accounting for taxes?( Oh.. and New Jersey of all places also has low prices (about 3.20)- in part because their gas tax is also low).
Remember taxes has a lot to do with the disparity in gas prices. For example, NJ is just under $0.15 per gallon. NY is almost $0.50 per gallon.
Here's lowest tax states and their current gas prices (if the formatting holds):Alaska 26.4 4.15Wyoming 32.4 3.38New Jersey 32.9 3.20South Carolina 35.2 3.01Oklahoma 35.4 3.08Missouri 35.7 3.03Mississippi 37.2 3.06New Mexico 37.3 3.26Arizona 37.4 3.47
re: taxes, true.. but their taxes are not lower than other places who have higher prices.SC prices are even lower than the areas of ND with oil strikes!You are forgetting supply. You need a refinery that is capable of making the blend that is approved in the area in which you live. That alone can add a buck to the cost during certain periods. If you want lower prices forget the nonsense about speculators and streamline the regulations that prohibit arbitrage by moving physical stock across regional borders.
$3.39 in northern New Jersey
The Energy Information Administration maps the location of U.S. refineries. I believe the four southeastern Atlantic Coast states have but a single operable refinery.As I understand it, the cost to transport gasoline from refinery to distribution terminal via pipeline is pretty cheap. The cost to distribute from terminal to station via truck should not vary significantly across the U.S.
One more point about refining capacity: the single refinery in the southeastern Atlantic states does not produce gasoline. That very small Savannah refinery owned by Nustar produces asphalt.
" the single refinery in the southeastern Atlantic states does not produce gasoline."so where does gasoline for the southeast come from?
Larry G: "so where does gasoline for the southeast come from?"I don't know for certain, Larry. But my guess is that gasoline is transported via pipeline from the large refineries in Alabama and Louisiana.Gasoline is moved via pipeline to terminals across the nation. At those terminals, the special blends required by each state are formulated. As I noted in another post, the blending components and the refined gasoline may be produced at different refineries.
According to GasBuddy (great name) the bergs on the outskirts of Greenville, SC have quite the range of gas prices.Gasoline speculators have driven the price to $3.79 on the southside. Yet, speculators are letting prices dwindle to $3.01 12.6 miles to the north. Speculation operates in diverse and mysterious ways. :>)Or, as one commenter above opines, the economy on the northside of Greenville is collapsing.
I would also add that certain parts of the country are dependent on the higher priced Brent Crude. There isn't enough infrastructure to get the lower priced domestic crude to market.Several refineries have been idled because the refined products they produce are not cost competitive. In part because they must use crude that is $10 or so more per bbl.
not in california either.i was in san Diego yesterday and paid $4.29 for 87 octane.nice and cheap here in utah though just like the property taxes.
Some here may be reading too much into these gasoline prices variations.Accorind to the EIA, lower Atlantic gasoline prices have dropped sharply over the past 8 weeks:Average gasoline prices, all formulationsweek of 3/26national ........ $3.92lower Atlantic .. $3.86week of 5/28 national ........ $3.67lower Atlantic .. $3.46So why did gasoline prices in the lower Atlantic states drop so much more than national prices? The divergence is only 3 weeks old.My guess - and it's just a guess - is an oversupply. Gasoline distributors may have anticipated increased demand due to Tropical Storm Alberto and Hurricane Beryl. They may have moved extra supply to the Carolinas and Georgia.
Well according Gas Buddy's Total US Fuel Taxes by State Missouri drivers pay 17 cents/gal for gasoline plus the following: Missouri also collects two additional fees on all sales of fuel - an agriculture inspection fee in the amount of 2.5 cents per 50 gallons (.0005 per gallon) and the transport load fee in the amount of $20.00 per 8,000 gallons (.0025 per gallon) - of around .3 cpg...Illinois on the other hand charges drivers 19 cents a gallon for gasoline but the state's politicos have really hosed the citizens: “Other Taxes” columns include 6.25% sales tax calculated off the retail price less federal and state excise taxes. The columns also include a $0.003 per gallon tax for underground storage tank fund, and other local sales and gasoline taxes...
Yes, as an Illinois resident, I can tell you I haven't been able to stand up straight for years.
thanks for the link juandos... I think I've seen this before...and I knew that some parts of Va had a 2.1% tax (for commuter rail) but I had forgotten about the 0.6-cpg petroleum storage tank fee (whatever that is).
Jon M: "Jeez really? Is that regular?"No, that's irregular. Regular is $4.27.This is the "guess your octane" product Larry envisions without strict gov regulation.
re: guess your octanethere was a time before regulation where Octane was not posted or even if it was.. there was no guarantee that it was truthful.so Morg says people are smart enough NOT to shop JUST FOR PRICE.do you think that is true for gasoline?how about if there was no regulation to post accurate octane info?would we still shop on price alone (most of us?)questions. questions.Last summer, I got tripped up out west where my vehicle started missing and almost by accident, I noticed that "regular" out west is often 85 octane - 2 points lower than regular in the East.A quick check of my owners manual said it needed a MINIMUM of 87 octane.Okay... so MY QUESTION :are we really comparing apples to apples on gas prices here if octane can vary?
"re: guess your octanethere was a time before regulation where Octane was not posted or even if it was.. there was no guarantee that it was truthful."LOLYou just made that last part up. You have no reason to make that claim. You just like the idea of saying regulation was required to whip those unruly fuel producers into shape, but that's not the case."are we really comparing apples to apples on gas prices here if octane can vary?"Octane doesn't vary, Larry, 85 is always 85, and 87 is always 87.
is the price of "regular" 85 octane comparable to "regular" 87 octane?how much is octane "worth"?in terms of making it up - nope... the regulation came about because there were abuses... like most regulation that has come about.companies would sell low grade octane and call it "regular" if there was no law restricting it.you know it.
We're a buck a gallon higher in CA, where gasoline availability is only one refinery hiccup away from disruption.And we're darn tootin' proud of our high prices in the Golden State. It shows we care. Or whatever, dude.
Current average state gasoline prices:http://www.californiagasprices.com/Prices_nationally.aspx
"is the price of "regular" 85 octane comparable to "regular" 87 octane?"Yes it is. You need to understand where 85 octane is used, and why - something you apparently don't."the regulation came about because there were abuses... like most regulation that has come about."Do you have a reference for that? Be sure to directly address the question, not just respond with meaningless bullshit."companies would sell low grade octane and call it "regular" if there was no law restricting it."If you had the slightest clue how business works in the real world, you wouldn't have written that.Only companies intent on spending hundreds of millions of dollars building refineries, only to find themselves bankrupt after selling a few thousand tankfuls of gas would consider such a cheat.You must not be aware that the worldwide commodity sold as gasoline is 85 octane before it is custom blended by individual distributors. Most newer cars would tolerate this, although they perform best on 87.
reference for abuses:https://www.google.com/webhp?sourceid=chrome-instant&ix=h9&ie=UTF-8#hl=en&sclient=psy-ab&q=lower+than+advertised+octane&oq=lower+than+advertised+octane&aq=f&aqi=&aql=&gs_l=hp.3...1259.37629.0.38031.45.35.0.22.214.171.124.2741.31j3.35.0...0.0.nQtZo6ZX_9A&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=f5d180bdfd690e7b&ix=h9&biw=1178&bih=595" only to find themselves bankrupt after selling a few thousand tankfuls of gas would consider such a cheat"huh? how would anyone know and how would they know who actually did it even if they did know UNLESS you had govt to regulate, require and enforce?what you do not understand is that we already tried this and if there is no requirement to disclose there is no real way to know without doing your own tests and even then you'd still only know for that one station for that one storage tank.Even then there still are people doing it but there'd be a ton more is they knew the govt was not checking.It's not only that they can adulterate...they also do not have to tell you.and in terms of what it is worth, wouldn't it be reasonable to assume that the price difference between regular, mid-range and premium is what you pay for higher octane?that high horse you are riding is a miniature pony...
"reference for abuses:"No, Larry: as I expected, you responded incorrectly. I asked for references supporting your assertion that government regulations came into being as a result of flagrant fuel fraud in the past, and you predictably provided something meaningless.It appears that the of the 502,000 Results you provided that matched any combination of the words you searched on, there is basically only one story about misrepresentation of octane rating, repeated endlessly.That story, if you even bothered to read it, is about 14 New Jersey gas stations caught by the state with less than premium grade bgas at their premium pumps - in 2011. Rather than supporting your claim, that example makes a case that government regs DON'T prevent octane fraud, as this occurred just last year.14 stations, out of 325 tested, caught cheating in New Jersey DESPITE serious regulation. the mind boggles.Where's the historical support for your claim, Larry?
the fact that abuses occur EVEN WITH regulation tells us that even more would occur without the regulation.I concede the historical point in part because Octane only became an issue when LEAD was banned - and note that the industry did not voluntarily ban it... the govt had to do it.But the law, requires that the Octane be posted and the posted value be what the fuel has.If there was no regulation - there would be no posting at many stations and many others that posted would likely sell lower octane fuel and advertise it as a higher octane - for a higher price.this is the part of the "free market"that basically incentivizes profits by cutting costs - which sometimes can and does lower quality by substituting unbeknownst to the buyer.It's true that the buyer can sue for damages but we've already been through a history of this - and it's a remedy not really feasible for most consumers.Yes, you can switch to other providers but there is no guarantee that they also won't end up doing the same thing especially if the competition is undercutting them and taking sales.The contention seems to be that when the govt regulates that it is abrogating the "liberty", the "rights" of those regulated.But the flip-side is what are the "rights" of those who buy to not be defrauded.And basically it comes down to a vote.Octane is but one of thousands of products that get regulated for basically the same reason - as a consumer protection - a protection that consumers want - and that according to the Constitution - have a process and a "right" to vote to have their govt - regulate.
Only companies intent on spending hundreds of millions of dollars building refineries, only to find themselves bankrupt after selling a few thousand tankfuls of gas would consider such a cheat.Our friend is an ignorant moron. Why do you persist in wasting so much time arguing with him?
reference for abuses:http://tinyurl.com/6svzszdNote that you are talking about individual independently owned gas stations, not refineries or corporately owned gas stations that you claim the regulations were designed to control. And note that the regulations did not help stop these people. huh? how would anyone know and how would they know who actually did it even if they did know UNLESS you had govt to regulate, require and enforce?They would know because the competitors would blow the whistle on any corporation dumb enough to try it. Imagine Exxon showing evidence to 60 Minutes producers that Sunoco was cheating its customers. The loss of business for Sunoco would weaken it so much that it would become a target for the takeout artists who could buy it for a little and sell off the pieces for a lot more. The real world of competition is not for the weak or the stupid. Of course, being weak and stupid you you cannot understand that everyone else is not like you.
I concede the historical point...You should have ended it there. As the man pointed out, the regulations did not stop the independently owned stations from trying to cheat the customers.
" Only companies intent on spending hundreds of millions of dollars building refineries, only to find themselves bankrupt after selling a few thousand tankfuls of gas would consider such a cheat.Our friend is an ignorant moron. Why do you persist in wasting so much time arguing with him?"well.. I'm finding that "ignorance" is a relative thing here in CD.for instance, we're told that because there are abuses it proves that regulation does not work.but then we're also told that oil companies would not risk adulterating for fear of consumers finding out and going elsewhere.so which is it?The idea that adulteration would ONLY happen with Large well-known companies is patently foolish from a number of different perspectives.Anyone, at any level in the distribution chain - could adulterate - and do sometimes - despite regulation because the regulation is random spot check rather than a govt tester showing up every time the station receives a shipment.the regulation does not require a specific octane - it requires that the octane be posted - and that the octane posted be what the octane in the fuel actually is.You guys kill me.Anytime someone points out the realities of regulation - as opposed to ya'lls cockamamie theoretical beliefs.. you start in with the insults.that's fine. I know who you are and what you are about now.and I'll return the favor if that's how you want to dialogue.
" They would know because the competitors would blow the whistle on any corporation dumb enough to try it"and below the corporation level in the distribution chain?
" You should have ended it there. As the man pointed out, the regulations did not stop the independently owned stations from trying to cheat the customers. "many, many more would do it if it were not for regulation and enforcement.and if the enforcement was done per shipment (which I fully acknowledge would be expensive and onerous) - the abuses would shrink even more.When you get fuel from WaWa or Sheetz or 7-11.. what major manufacturer do you think they are getting their fuel from?Don't they buy their fuel on the "spot" market? Have you ever noticed the names on the delivery tankers? I can give you a hint, the names on the tankers DO NOT say "Exxon or Conoco or other major name".
well.. I'm finding that "ignorance" is a relative thing here in CD.I can assure you that your ignorance is absolute.
well maybe.. when it comes to things like Octane regulations that are present in virtually every state and every industrialized country in the world but according to guys like you it's govt take "liberty" away.the whole fricken world does this, right?and you blather on about "ignorance"ha ha hayes indeedy
"the fact that abuses occur EVEN WITH regulation tells us that even more would occur without the regulation."No it doesn't. That non sequitur only tells us that the regulations haven't ensured that consumers are getting what they expect.A different form of regulation might be more effective.Keep in mind that inadvertence and human error can cause what appears to be fraud. "I concede the historical point in part because Octane only became an issue when LEAD was banned - and note that the industry did not voluntarily ban it... the govt had to do it."No, Larry, that's not true either. Why do you suppose lead was in gasoline in the first place? You can concede the historical point, but not for that reason."But the law, requires that the Octane be posted and the posted value be what the fuel has."That much is true, but we already agree on that point. There are regulations, yes.
"Yes, you can switch to other providers but there is no guarantee that they also won't end up doing the same thing especially if the competition is undercutting them and taking sales."You are missing an important point here regarding the power of the market. "taking sales" implies that customers are getting what they want. Somewhere, somehow, some providers must supply the correct fuel that consumers want and need to operate their cars, or people would literally be forced to quit driving. Those providers will prosper, and those who cheat will go out business.What does it say about your own honesty when your first thought is that you are being cheated? And, that you need Big Brother to protect you, as if the human beings that comprise Big Brother are somehow more honest than those you fear.
V: "Our friend is an ignorant moron. Why do you persist in wasting so much time arguing with him?"Good question. I don't have a good answer, except that sometimes the extreme wrongness of his comments is so compelling as to leave me helpless to ignore them. I'll try harder. :)I see others have the same compulsion. Despite several promises to quit, morganovich can't always resist the drug. Perhaps a 12 step program is in order: "I admit that I'm powerless over my compulsion to respond to Larry's comments."
"Don't they buy their fuel on the "spot" market?"Yes. No."Have you ever noticed the names on the delivery tankers? I can give you a hint, the names on the tankers DO NOT say "Exxon or Conoco or other major name"."Well, of course not, Larry, major companies don't lease their own trucks to other distributors. That doesn't mean those other distributors you see aren't carrying Exxon or Conoco gas.Do you think your local WaWa station has their own refinery and distribution company?You might even be surprised to learn that major companies buy gas from each other when they have a need to satisfy their customers."and if the enforcement was done per shipment (which I fully acknowledge would be expensive and onerous) - the abuses would shrink even more."Yes, of course they would. You write the silliest things. If you were willing to pay for such a level of protection, the resident state inspecter at each station could check each delivery before it went into the ground.Perhaps it would be cheaper if you got your own test kit, and tested a small sample each time before you filled your tank. That way I wouldn't be paying for such nonsense.
Good question. I don't have a good answer, except that sometimes the extreme wrongness of his comments is so compelling as to leave me helpless to ignore them. I'll try harder. :)The first ten times you make the same point and he misses it may be fine. But why bother with the twenty-fifth or fiftieth? He is playing with you, is too ideologically blinded to pay attention, or just an idiot. Few of the additional times can be deemed anything but a waste.
V: "The first ten times you make the same point and he misses it may be fine. But why bother with the twenty-fifth or fiftieth? He is playing with you, is too ideologically blinded to pay attention, or just an idiot. Few of the additional times can be deemed anything but a waste."You're right, of course, but it if he's playing, he should be in the running for troll of the Year. He's that good.
ya'll are laughable!every industrialized country in the world has regulations... including getting rid of lead in fuel....and requiring disclosure of the octane.ya'll say: " "taking sales" implies that customers are getting what they want"no it doesn't. If they assume it's the same product - because they've been led to believe it's the same product and choose the lower price.then you blather something about suspecting dishonesty.Call it actual experience...of millions of people in dozens of countries.the reason why we have weights and measures is not because someone "suspected" dishonesty. It was because actual experience showed that some would be dishonest..and profit from it.... at the expense of consumers.that's where regulation comes from guys...when confronted with such realities ya'll sputter "ignorance" and "moron".It's a worldwide conspiracy for you guys. All these govt bean counters have conspired across all countries to force regulations on people who do not want it.yes indeed.morons indeed.
Its $2.99 at Costo in Memphis, TN
2.89 in S.C.:-)
Post a Comment
Create a Link
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
View my complete profile