Gas is a zero dollar profit business

[Flames in 07]

Originally Posted by dissentowner

Ok, you have made some good points but tryin to make anyone believe oil company's do not collude is trying to call everyone stupid. One jacks up the price and they all follow suit. It would be like your potato chips that keep the retailer in business all the same price no matter what the name brand. Same with cigarette companies, you can get a pack of Number 7's a helluva lot cheaper then Players but if everyone colluded like the Oil industry they would be the same price. You want to change my mind then give me any other product especially one as essential as gas that's prices all go up or change to within a margin of acent or two and that is it? Good luck. I buy your arguement of the retailer not making big bucks, okay, but don't insult my intteligence or anyone elses by saying Gas distributers are not in collusion with eachother..geez

you need to understand the definition of collusion, your are confusing it with, competitive, efficient, transparent market.

Based on your definition airlines collude, hotels collude, car manufacturers collude, laundry detergent producers collude etc.

Since you know this to be the case, let's just see some proof of collusion.

If someone across the street changes their price, I'm inclined to follow because if he's going down in price, I probably will to or I'll lose business, and if it goes up I'll probably go up as well to improve margins ... neither are cases of collusion.

Btw you asked earlier what can you do to beat them. The answer is to not buy there product. I moved near my place of work for a few reasons but that was one of them, and the second is that it's a free country. You can join them, buy their stock. Trust me that works well to.

And enough of the insulting of intelligence. Your insulting your own by declaring something and providing zero proof behind it. But that's ok, I think it's because you don't know what collusion is.

[dissentowner]

Originally Posted by Flames in 07

you need to understand the definition of collusion, your are confusing it with, competitive, efficient, transparent market.

Based on your definition airlines collude, hotels collude, car manufacturers collude, laundry detergent producers collude etc.

Since you know this to be the case, let's just see some proof of collusion.

If someone across the street changes their price, I'm inclined to follow because if he's going down in price, I probably will to or I'll lose business, and if it goes up I'll probably go up as well to improve margins ... neither are cases of collusion.

Btw you asked earlier what can you do to beat them. The answer is to not buy there product. I moved near my place of work for a few reasons but that was one of them, and the second is that it's a free country. You can join them, buy their stock. Trust me that works well to.

And enough of the insulting of intelligence. Your insulting your own by declaring something and providing zero proof behind it. But that's ok, I think it's because you don't know what collusion is.

I call B.S. again, airlines can have huge diffrence in rates to go to the same place, it is cheaper to fly Westjet then Air Canada by a pretty sum, there is a significant rate difference of more then a few cents in hotel rates, not every hotel has the exact same rate for their room do they??
Both cars and laundry detergents are also not the same price depending on the brand, not at all. I don't know how these examples strengthen your argument but you failed miserably!!!

[Flames in 07]

Originally Posted by dissentowner

I call B.S. again, airlines can have huge diffrence in rates to go to the same place, it is cheaper to fly Westjet then Air Canada by a pretty sum, there is a significant rate difference of more then a few cents in hotel rates, not every hotel has the exact same rate for their room do they??
Both cars and laundry detergents are also not the same price depending on the brand, not at all. I don't know how these examples strengthen your argument but you failed miserably!!!

Ever buy gas at Walmart? I've bought loss leader gas for 15 cents less than a Pcan across the street in this very province.

If you look around you'll find a ton of routes that are priced exactly the same on WJ and AC. You are picking one or two that you found and parading them around. WJ has been in the news a million times over the last several years talking about how AC is matching them to the penny on purpose.

The overall prices of hotels ebb and flow together, yes one room might be 10 bucks more than the next but then hotel rooms differentiate from each other much easier that gasoline does ... pretty much gas is gas to most motorists, but hotels have bigger or smaller rooms, better or worse locations etc.. Airlines can differentiate a little as well ie business travellers are attracted to aeroplan points

Still looking for all that proof to collusion, or that you even have a faint idea of what it is in the first place ... that's the only thing I see failing miserably.

[dissentowner]

Here is another example, 10 milk distributers all have their product out there, they all are selling between a range of 1-3 dollars. Now all of the sudden one decides to sell his milk for $10 a carton. Your argument is that all of them would follow suit to not be left behind instead of keeping their current price knowing nobody in their right mind is gonna buy the $10 carton. Now if the other 9 say hey, if we up ours to $10 a carton what choice will they have and we will make a fortune and so they follow suit to fill their pockets that is what your oil company's you are defending have done.

[dissentowner]

Originally Posted by Flames in 07

Ever buy gas at Walmart? I've bought loss leader gas for 15 cents less than a Pcan across the street in this very province.

If you look around you'll find a ton of routes that are priced exactly the same on WJ and AC. You are picking one or two that you found and parading them around. WJ has been in the news a million times over the last several years talking about how AC is matching them to the penny on purpose.

The overall prices of hotels ebb and flow together, yes one room might be 10 bucks more than the next but then hotel rooms differentiate from each other much easier that gasoline does ... pretty much gas is gas to most motorists, but hotels have bigger or smaller rooms, better or worse locations etc..

Still looking for all that proof to collusion, or that you even have a faint idea of what it is in the first place ... that's the only thing I see failing miserably.

You must be the only person on this planet that does not work for an oil distributer who honestly believes they are not working together to keep prices high. The proof is on the streets, every gas company changes their prices at the SAME time. But your right, that is merely coincidence...

[Flames in 07]

Originally Posted by dissentowner

Here is another example, 10 milk distributers all have their product out there, they all are selling between a range of 1-3 dollars. Now all of the sudden one decides to sell his milk for $10 a carton. Your argument is that all of them would follow suit to not be left behind instead of keeping their current price knowing nobody in their right mind is gonna buy the $10 carton. Now if the other 9 say hey, if we up ours to $10 a carton what choice will they have and we will make a fortune and so they follow suit to fill their pockets that is what your oil company's you are defending have done.

That's ridiculous. You have ignored everything that I have said. Gas goes up a few percentage points at one time, you are comparing an one time increase of like 400% to gasoline?

In your above, silly irrelevant case, no, people wouldn't follow suit because everyone knows he won't get any sales at that level.

UNLESS his input costs went up by 400%, then everyone may follow because everyone needs the margin relief.

You are forgetting that retailers input has gone up by about the same amount as the price of the gasoline has, and comparing that to a commodity that hasn't.

Seriously just stop, I'm not the one insulting your intellegence, even if I wanted to I can't compete with your comments.

Still looking for that proof of collusion ... how many times do I have to ask until you actually provide some? If I knew the answer to that I'd ask that many times in one post just so I can see the proof to your arguement.

[dissentowner]

Originally Posted by Flames in 07

That's ridiculous. You have ignored everything that I have said. Gas goes up a few percentage points at one time, you are comparing an one time increase of like 400% to gasoline?

In your above, silly irrelevant case, no, people wouldn't follow suit because everyone knows he won't get any sales at that level.

UNLESS his input costs went up by 400%, then everyone may follow because everyone needs the margin relief.

You are forgetting that retailers input has gone up by about the same amount as the price of the gasoline has, and comparing that to a commodity that hasn't.

Seriously just stop, I'm not the one insulting your intellegence, even if I wanted to I can't compete with your comments.

Still looking for that proof of collusion ... how many times do I have to ask until you actually provide some? If I knew the answer to that I'd ask that many times in one post just so I can see the proof to your arguement.

I have given you examples, give me proof there is not? Here is an article for you to read but I am sure your point will be the government cleared the companies, of course they did they make the tax money. You can't insult my intelligence, anyone who believes the gas companies are not working together definetely is not threat to me,lol.
http://www.cbc.ca/consumer/story/200...as-report.html

[Flames in 07]

Originally Posted by dissentowner

You must be the only person on this planet that does not work for an oil distributer who honestly believes they are not working together to keep prices high. The proof is on the streets, every gas company changes their prices at the SAME time. But your right, that is merely coincidence...

Yes, they do change at about the same time ... that's not collusion. Again, go learn what it means, you are confusing it with efficient, open transparent market.

Airline companies spend a great deal of time monitoring compeditor prices, so do laundry detergent manufacturers and hotels. Monitoring and responding to competition is a normal course of business.

But you are right, the general public does not believe much of what I say, but that doesn't make what I say wrong, it makes the general public dumb about the industry. It's too bad, because the industry would teach them, but they would never listen and the 6oclock news has no interest in learning, they are too busy looking out for grandma to deal with facts.

Here's this will help you. A little quiz for you:

1) What would you guess is the underlying cost to a gasoline retailer.
2) Is the commodity that is the underlying cost a local or world wide commodity?
3) How is the price of world wide commodities set?
4) Will buyers buy crude or gasoline at almost any price because they need it to function in their lives?
5) Is the cost of recovery of the above underlying commodity becomming cheaper or more expensive to get?

[Cowboy89]

Originally Posted by dissentowner

I have given you examples, give me proof there is not? Here is an article for you to read but I am sure your point will be the government cleared the companies, of course they did they make the tax money. You can't insult my intelligence, anyone who believes the gas companies are not working together definetely is not threat to me,lol.
http://www.cbc.ca/consumer/story/200...as-report.html

That report's a year old and used data for the one year where Hurricane Katrina wrekced havoc on supplies and saw record high crack spreads. Right now crack spreads are actually really low and similar to 1990s level. The difference in price right now as we speak is purely crude costs.

[Flames in 07]

Originally Posted by dissentowner

I have given you examples, give me proof there is not? Here is an article for you to read but I am sure your point will be the government cleared the companies, of course they did they make the tax money. You can't insult my intelligence, anyone who believes the gas companies are not working together definetely is not threat to me,lol.
http://www.cbc.ca/consumer/story/200...as-report.html

Ha, yes, the gov't let them go ... even though they were guilty. If accusations proved things that's a pretty scary planet.

Anyway, through no real experience you already know everything. Have fun being ignorant. Somebody should hire you to do something real important while you still know everything.

Look, I don't know tons about hockey, but I still have opinions, I argue them but also try to listen to others because well I haven't spend 15 years in the hockey industry. You with no experience make all kinds of claims with not only no proof but not even a working understanding of what you are are claiming.

Matching prices is not colluding. The oil companies having a meeting to set the prices would be. Unless you can proove anything you are saying I'm done, I've tried to show you how it works but you insist on being ignorant. So as I said, have fun being ignorant.

And btw there is no onus on me to disprove your unthought out theory, it's on you to prove it. All I can tell you is that I have never seen collusion. I've seen prices closely matched, but that's not collusion.

[Flames in 07]

Originally Posted by Cowboy89

That report's a year old and used data for the one year where Hurricane Katrina wrekced havoc on supplies and saw record high crack spreads. Right now crack spreads are actually really low and similar to 1990s level. The difference in price right now as we speak is purely crude costs.

You're going to half to explain to him what a crack spread is.

It's the margin between the cost of buying and processing crude and the sales price in the resulting products.

I personally don't see anything they did wrong from a legal perspective, but they behaved very poorly from a being a member of the community perspective. Many gas stations in the US have done localized gouging, however for the most part in the US it is different than canada as the pricing is decided at a site or region level not by the producer or refiner.

[driveway]

Originally Posted by Flames in 07

The RETAILER is someone who runs the site, the land may very well be owned by the name you see on the sign, but the RETAILER ... is always working on a tight margin. His cost goes up completely directly with the cost of crude.

Okay, sure, I buy that, but then what did you mean when you agreed with this statement:

Originally Posted by Dion
It's my understanding that no one is buying into these locations. They are owned by Esso et all and the person managing the site is paid a salary.

If I may remind you of what you said it was:

As far as I know that is the common (but not exclusive) type of relationship. Particularly in urban areas.

So then, if the person managing the site (retailer) is being paid a salary by the owner (Esso, subsidiary of Imperial Oil, subsidiary of Exxon Mobil - largest company in the world by revenue, 2007) who is the poor schmuck you keep talking about who is running his buisness on such a thin margin?

Since you said the relationship is not exclusive, I am totally prepared to accept that there are franchise owners out there who are trying to make a living on thin margins of gasoline and sundry items. However if the 'common' relationship is one of salaried manager and corporate ownership, then you have to recognize that the price at the pump is directly and irevocably tied to the grotesque overall profit margins of the major oil-and-gas companies, since they are the ones selling themselves the gas, essentially.

[Flames in 07]

Originally Posted by fotze

Milk prices are regulated by the EUB.

Does it matter if it is collusion, the government has been unable to prove it the past billion times it has tried, so even if there is collusion, now what? It is most likely the companies are pretty full of it when trying to deflect blame, all companies do it, like when your cable bill goes up it is "to provide enhancements to your service". They are all full of it.

The best way to lower the prices is to lower demand, the best way to lower your costs is to use less. If conspiracy theories created gasoline then I would be right there with you. If it is 100% collusion why didn't the oil companies just raise the price 10 years ago, why now? When it was $18 per barrel in the late 80's and people were being laid off why didn't the oil companies just collude the price to $100 and instantly solve their problem?

No industry is responsible for maintaining your lifestyle, you are. Move close to your work and you too can laugh at the people who bought a 3000 sq. foot house in Lake Chapparal for $300k and work near the airport. Every house I ever bought the number one consideration was the proximity to work. Do people not consider that, is the size of the house more important, the age of the house?

I don't understand why environmentalists aren't rejoicing high oil prices? The people with the most wasteful lifestyles are getting burned the most. The biggest boost to alternative energy technology is high fossil fuel costs. With $125 oil, alternative energies are way more economically viable.

Perfect, agree with everything except I need to know about these economically viable options for my car. If you mena by a hybrid then I see your point but the cost of changing cars won't make it worth it.

[Dan02]

on a related note. I heard through the grapevine(friend of a friend of a.... E1) that gas may be jumping to 1.42$ Monday so you might wanna consider filling up tonight. No idea if it'll actually happen but might as well not risk it.

As for why the gas prices at various gas stations are all the same. Well the refinerys all get their crude for roughly the same price, the refining costs are pretty similar, transportation costs probably quite similar, small profit margins quite similar. Therefore it seems to me their pump prices are gonna be quite similar.

Some of you seem to have it in your heads that the retailer boosts prices and others see that as a reason to boost theirs and increase profit margin, in reality the boost is probably due to increased costs of fuel that all fuel retailers have to pay and prices are raised relatively uniformly to maintain the existing profit margins.

[Cowboy89]

Originally Posted by fotze

No industry is responsible for maintaining your lifestyle, you are.

Great point!

[Clarkey]

Originally Posted by Reggie Dunlop

Bogus. Bogus. Bogus. Bogus. Bogus. Bogus. Bogus. Bogus. Bogus.

Christ, they're on every other corner! New ones pop up in every additional subdivision!

Okay, let's say the current franchisees are chumps hanging onto a losing proposition. Where do the new ones come from then?

There's a mom and pop immigrant owned grocery store on every corner in Toronto, are they rolling in the dough? That's a bad argument.

[Flames in 07]

Originally Posted by driveway

Okay, sure, I buy that, but then what did you mean when you agreed with this statement:



If I may remind you of what you said it was:


So then, if the person managing the site (retailer) is being paid a salary by the owner (Esso, subsidiary of Imperial Oil, subsidiary of Exxon Mobil - largest company in the world by revenue, 2007) who is the poor schmuck you keep talking about who is running his buisness on such a thin margin?

Since you said the relationship is not exclusive, I am totally prepared to accept that there are franchise owners out there who are trying to make a living on thin margins of gasoline and sundry items. However if the 'common' relationship is one of salaried manager and corporate ownership, then you have to recognize that the price at the pump is directly and irevocably tied to the grotesque overall profit margins of the major oil-and-gas companies, since they are the ones selling themselves the gas, essentially.

it's not a salary the way most employees receive one. They aren't employees of the oil company they are independant business people who get a sum of money (maybe the proper word is commission) based on some kind of formula. that formula will involve some kind of cpl payment (ie total volume at the site times something like 3cpl) and will get a percentage of store sales ... each product may have a different percentage to it. And then they would have convenience targets that give them bonuses (at least that is how it worked aobut 7 years ago) But the contracts are slanted very strongly to compensation based on convenience sales.

So to be clear, Imperial may own the land, they may or may not own the things above the land like the carwash or whatever is there, but regardless of who owns what the oil companies slant the deals so that the retailer is focussed on pushing convenince items.

[Flames in 07]

Originally Posted by fotze

Its a pretty "out there" technology

heh, ok. Agreed.

[Flames in 07]

Originally Posted by Dan02

on a related note. I heard through the grapevine(friend of a friend of a.... E1) that gas may be jumping to 1.42$ Monday so you might wanna consider filling up tonight. No idea if it'll actually happen but might as well not risk it.

As for why the gas prices at various gas stations are all the same. Well the refinerys all get their crude for roughly the same price, the refining costs are pretty similar, transportation costs probably quite similar, small profit margins quite similar. Therefore it seems to me their pump prices are gonna be quite similar.

Some of you seem to have it in your heads that the retailer boosts prices and others see that as a reason to boost theirs and increase profit margin, in reality the boost is probably due to increased costs of fuel that all fuel retailers have to pay and prices are raised relatively uniformly to maintain the existing profit margins.

That's actually not quite true. Refineries run different grades. This is an extreme ( but illustrative example) if you ran light sweet late last year you paid $50US/bbl more for AB crude than a refinery that runs heavy sour.

[Reggie Dunlop]

Originally Posted by Clarkey

There's a mom and pop immigrant owned grocery store on every corner in Toronto, are they rolling in the dough? That's a bad argument.

I would have to think ubiquity in any business tends to indicate a healthy sector. We all need groceries, right?

And I really don't see why mentioning that they being immigrants is particularly noteworthy, other than perhaps some of them came in as entrepreneurs.