OK I am at a loss (not really) as to why my gas price at the pump is not dropping gat the same rate as the drop in a price per barrel for crude. Crude prices have dropped to below $100 a barrel yet my gas prices are not dropping like they go up.
So I wanted to see this in a form I can understand so I found a place I could chart it with some accuracy. And here is what I found. I compared crude oil prices with the average US Gasoline at the pump price. And WOW was I surprised. While gas follows the crude fairly close, it sure does not drop when crude does. It likes to go up with no reason behind it, but drop? No way. Look at the charts I made below and see for yourself.
This chart is for the month of September, 2008.
While one month does not give a great view of the overall, look at it carefully. Next I did 6 months..this is what I got:
So I thought but what about the last time gas was below $100 a barrel, what was the gas price then? Should it be close to that plus inflation? So here is what I found:
Now look at the crude and gas prices.. Hmm the last time crude was at its current price, gasoline was at about $3.00 a gallon. WHy does the price of gasoline follow the price of crude when it goes up, but not when it goes down?? GREED!! That’s why. this is from a CBS article that was posted yesterday:
Over the course of the past year, we've heard the complaints.
"20 dollars doesn't even give me a full tank. I fill up on 45 dollars," Lansing resident Samyah Abdulla says.
We've even heard the horror stories.
"A lot of people are choosing between eating and getting to work," Lansing resident Norma Coryell says.
Perhaps, finally, some relief at the pump comes with news of the prices of a barrel of oil dropping to 106 dollars. The thought of relief seems completely valid based on the news...right? Wrong. Prices have gone up this week from last by nearly 15 cents, leaving nearly everyone wondering why.
"If it's down then why are we still paying the high prices?" Abdulla asks.
The President of the Michigan Petroleum Association, Mark Griffin, says he has the answer.
"The primary reason is that while barrels of oil have come down 27, almost 28 percent in cost, the cost big oil retailers are charging gas stations has only come down 11 percent," Griffin says.
Griffin adds that wasn't the case last Spring when a barrel of oil was also going for 106 dollars. At that time though gas prices for motorists were just $3.25, which has a lot of people wondering where to place their blame.
Griffin says you probably shouldn't blame your local gas station for their high prices because they're actually losing money on the gas too.
"They're losing probably a nickel a gallon on gas right now," Griffin says.
But as for the question, who's fault is this? Griffin says the big oil companies.
from: http://www.wilx.com/news/headlines/27933034.html
So who is to blame?? Well you read the above and make your mind up for yourself. But I will tell you this, with prices going down on crude, but gasoline prices not matching them, someone is going in the tank for the profits, and someone will find out.
Hope this information helps you see the big picture.