Down with the evil Gas lords. (yes, i am brave enough to post another from myspace)

[Kuciwalker]

TMI

[Imran Siddiqui]

If there is another thread, I suggest naming it:

Kaak's Pwnage Continued: Evil Gas Lords 2

[Spiffor]

Why don't you create that thread?

[Imran Siddiqui]

Sometimes it is best to let things die, like Kaak threads, or Terry Schiavo.

[Spiffor]

[Kidlicious]

Give Kaak some time to prepare for the next econ thread.

[Zkribbler]

Can we stop with the personal attacks?

[Kidlicious]

I didn't mean it as a personal attack.

[GhengisFarb™]

Originally posted by Imran Siddiqui
Sometimes it is best to let things die, like Kaak threads, or Terry Schiavo.

[Kaak]

http://www.consumerwatchdog.org/energy/pr/?postId=6133

New Gasoline Study Shows Profits, Not Crude Oil Prices Or Ethanol, Are Driving Pump Price Spike

[Imran Siddiqui]

I would like to read the methodology for that study, but, of course, the website only has a link to a 5 page summary (to their own report), which includes none of their calculations aside from simple if crude cost rises = gas price increases on a 1:1 basis (which isn't exactly the best of comparisons.. to be diplomatic). Kind of a big warning sign... well, a least most would think so.

And if you read the rest of their site it isn't like the group appears to be a liberal blame the big companies type of organization either .

[Urban Ranger]

Originally posted by Spiffor
As to the "correct me if I'm wrong", I'll take an imaginary example to show that there is no reason for being a correlation between price and profit (this is not an allegory of what happened to the majors, far from it):
Let's say you have a lemonade store. In the winter, very few people want lemonade, and you struggle to keep your store alive. You set your price at 25c a lemonade, so that some people might actually choose to take your lemonade over some coke. Even though your low prices manage to keep you a few customers, the season is harsh for your business, and it is miraculously that you avoid losses, and manage to make a measly 10$ profit for the entire season.

Comes the summer. Everybody is thirsty for lemonade. You raise your price, because you know it won't alienate your customers (you set it at 50c), and since there are plenty of customers, you make quite a bit of profit (let's say, 1000$ over the whole season).

You have doubled your price (+100% increase in price). In the meantime, you went from 10$ profit to 1000$ (+9,900%).

In all fairness, you are comparing a goods with very elastic demand (lemonade) with one that is largely inelastic (petrol).


Edit: thread full. Feel free to start a new one.