Price Of Oil Significantly Lower

[lifeisrandom]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

[473geo]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

DHL Express fuel surcharge Sept 20.5% - Oct 18%.....

[Scott]

Now you know why the oil companies have so much money.

[lifeisrandom]

Now you know why the oil companies have so much money.

i dont get it

price of oil has gone down

[JimsKnight]

If they stay low, they *should* trickle down.

The other part is if demand drops, if people use less fuel, this can also have a benefit.

[PhilHarries]

The answer is simple.

People supply goods or provide services for which they charge a price. The higher the price the higher their profit and the happier they are. Therefore they are always looking for an excuse to raise prices and the best excuses are those thay can claim to be beyond their sphere of control e.g. fuel prices.

Once they have this excuse they can, within limits, raise the price by the legitimate margin dictated by the excuse plus an operating, administrative, margin.

If this excuse subsequently disappears they will drag their heels in implementing a reduction. The further divorced they are from the excuse the longer they can drag their heels. For example gasoline prices at the pumps follow crude oil prices up and down more closely than foodstuffs. Consumers squeal like stuck pigs when prices are increased but after a short protest period they will return to their normal ways and in time will forget the increase.

The only fly in the ointment is maverick independant operators who have lower operating costs and are willing to accept tighter profit margins. These people generally maintain their prices below the mainstream operators for a selected basket of goods and/or services. Occassionally these operators will force the mainstream boys to cut prices to maintain market share but not very often as it is very much an old boys club atmosphere in which nobody rocks the boat too much.

Well that's my take on it.

[Heng]

I think lowering prices is overrated.

[thaihome]

There is of course, some time lag between the spot market crude oil price you see quoted and the price of refined gasoline and other oil products. Keeping in mind that it takes some weeks just for the tankers to get to the refineries.

TH

[bendix]

There is also the fact that the oil refineries like PTT etc didnt pass on all the increases in crude prices to customers at the pumps - indeed, they were selling fuel at a loss for a while. They will doubtless want to recoup some of that while they can.

I'm sure the same applies to airlines.

[bkkjames]

There is also the fact that the oil refineries like PTT etc didnt pass on all the increases in crude prices to customers at the pumps - indeed, they were selling fuel at a loss for a while. They will doubtless want to recoup some of that while they can.

I'm sure the same applies to airlines.

Don't totally agree re airlines, but I guess you are not suprised.

A majority of airlines hedge their fuel costs by buying futures essentially. But when the price of crude and subsequentially aviation fuel jumped dramatically over the last 6 months to a year, those who previously hedged their fuel costs took advantage of the situation and raised prices even though their fuel costs did not rise during this time.

The advantage of this is of course a fixed price for a set term. The disadvantage is you pay more for the security.

Some airlines like TG and others do not hedge and were caught out by the meteoric rise of fuel.

[PattayaParent]

I buy a case of booze a week from a local Mom and Pop store on my way home.

I know the amount of stock they have on hand and I know when they get more in as I pass the place twice a day.

When fuel prices went up they increased the prices of the cases of booze that they already had in stock and was delivered when fuel prices were lower.

Oddly enough when prices went down they decreased the prices of the cases of booze that they already had in stock and was delivered when the fuel prices were higher.

I just came to the conclusion that most small shopkeepers just don't have a clue of pricing according to market economics and make it up as they go along.

[bonobo]

I buy a case of booze a week from a local Mom and Pop store on my way home.

I know the amount of stock they have on hand and I know when they get more in as I pass the place twice a day.

When fuel prices went up they increased the prices of the cases of booze that they already had in stock and was delivered when fuel prices were lower.

Oddly enough when prices went down they decreased the prices of the cases of booze that they already had in stock and was delivered when the fuel prices were higher.

I just came to the conclusion that most small shopkeepers just don't have a clue of pricing according to market economics and make it up as they go along.

This is really a common practice. They are not charging you for the item itself but rather for their cost of replacing that item.  

[Kerryd]

The oil companies will try to tell you that there is no collusion, no price fixing, and that they are hurting just like every other business. That is, until they announce record breaking profits every quarter.

I knew an independent station owner awhile ago. I noticed that every time the price of oil jumped, so did prices, immediately. The owner explained that was because his next shipment would cost more. What about the fuel he still had, bought at the cheaper price ? Ahh, that was to make up for the times when he didn't make as much profit.

Why doesn't the price drop when the price of oil goes down ? Well, he has to pay for that expensive fuel already in his tanks.

Testifying a few years ago before a Royal Commission looking into gas price fixing, oil company executives told the commission that it took 6 months from the time they bought a barrel of oil, until it hit the pumps at your local gas station.

Nobody asked them why the pump prices jumped as soon as the price of oil went up. After all, if that higher priced barrel of oil wasn't going to hit the pumps for another 6 months, why is the price going up now ?

Of course, nobody asked them either why it was that all prices changed almost the exact same amount, at the exact same time each day. I found out from another retailer that twice a day, she has to phone a central number, and they tell her what price to set the pumps to. I found that out on a day when she got busy and forgot to phone. By the time she remembered, it was too late. She had to stop the pumps, measure the remaining fuel in the tanks, set the new price and so on. She ended up losing a couple cents a liter for the rest of the day because of that.

I used to live across the street from an Esso station. I would look at the price 4-5 times a day, and started tracking it. I noticed that when the price increased, it always changed around 3 pm. Then I found out why. People on their way to work in the morning don't stop to fuel up as often as they do on their way home. Or, they look at the price on the way into work and decide to fill on the way home, only to be hit with a higher price.

The oil companies know what they are doing.

Raise prices until they notice a drop in sales. Slowly drop prices until sales volumes pick up again, then hike the price again. Each time, don't lower it below what it had been previously. Keep it a cent or two above the previous low.

Jack it up 4. Drop it 3. Jack it up 5, drop it 3, Jack it up 4, drop it 2 and so on.

They know they've got you over a barrel (literally), and can screw you pretty much as often and as hard as they want. If you scream loud enough, they may offer a wee little bit of lube to go with your screwing.

[lifeisrandom]

The answer is simple.

People supply goods or provide services for which they charge a price. The higher the price the higher their profit and the happier they are. Therefore they are always looking for an excuse to raise prices and the best excuses are those thay can claim to be beyond their sphere of control e.g. fuel prices.

every time the price of oil goes up- retail stocks suffer

whatever you are selling if you raise the price you will do less volume

so it seems more like a question of low price high volume vs higher price lower volume

selling something based on what you paid for it is one answer but the problem is competition as other stores will be able to buy and sell that product for less than you unless you are the other business (monopoly) and can prevent a free market for said products

Edited October 10, 2008 by lifeisrandom

[dotcom]

I buy a case of booze a week from a local Mom and Pop store on my way home.

I know the amount of stock they have on hand and I know when they get more in as I pass the place twice a day.

When fuel prices went up they increased the prices of the cases of booze that they already had in stock and was delivered when fuel prices were lower.

Oddly enough when prices went down they decreased the prices of the cases of booze that they already had in stock and was delivered when the fuel prices were higher.

I just came to the conclusion that most small shopkeepers just don't have a clue of pricing according to market economics and make it up as they go along.

I often wonder the same thing about gold shops. Some of them must have massive amounts in inventory.

When gold is going up 20 30 40 $ a day they are up massively (on paper). The government sets the price of gold just as it does diesel & gasoline.

[Spee]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

Diesel was still pretty high when I was up at the house last week, something like 30baht per liter. Gasoline prices where I'm at in the US are down about 25% from the highs, from about $4/gal to about $3/gal. I'm hoping to see prices below $3/gal very soon. It would also be nice to see similar drops in LoS.

Inflation is a whole other animal. There's no way to tell how various national economies are going to respond to the current economic bloodletting.

[ukrules]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

Diesel was still pretty high when I was up at the house last week, something like 30baht per liter. Gasoline prices where I'm at in the US are down about 25% from the highs, from about $4/gal to about $3/gal. I'm hoping to see prices below $3/gal very soon. It would also be nice to see similar drops in LoS.

I filled my car up at Tesco in England the other day, if I remember correctly the price of regular unleaded was £1.02 / liter which means it has gone down quite a bit. It cost around £58 instead of the £65+ I was paying a couple of months ago.

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

[dumball]

lowering prices in Thailand ! I think this thread should be in the jokes and funny stories section .

[tartempion]

There is also the fact that the oil refineries like PTT etc didnt pass on all the increases in crude prices to customers at the pumps - indeed, they were selling fuel at a loss for a while. They will doubtless want to recoup some of that while they can.

I'm sure the same applies to airlines.

Selling fuel at a loss???

Rubbish

I worked for a cargo airline.

When fuel went up we postponed price increases as long as possible, competition you know!

Then we kept the fuel surcharge as long as possible to retain our margin.

That must be easy to understand, no?

Whilst most vendors got paid 30 days invoice date, our fuel providers at airports needed to be paid within 7 days, failing to do so would result in stranded aircrafts!

[otherstuff1957]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

Diesel was still pretty high when I was up at the house last week, something like 30baht per liter. Gasoline prices where I'm at in the US are down about 25% from the highs, from about $4/gal to about $3/gal. I'm hoping to see prices below $3/gal very soon. It would also be nice to see similar drops in LoS.

I filled my car up at Tesco in England the other day, if I remember correctly the price of regular unleaded was £1.02 / liter which means it has gone down quite a bit. It cost around £58 instead of the £65+ I was paying a couple of months ago.

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

Actually, the US & UK gallons are not the same. In the US, we use 'wine gallons', which date from the reign of Queen Anne, and are 3.79 liters. In the UK you switched to the newer 'ale gallons' or Imperial Gallons in 1824. Imp. Gallons are 4.55 liters. So, UK petrol (gasoline) costs 3.87 pounds or $6.58 / Gallon.

[kokesaat]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

Diesel was still pretty high when I was up at the house last week, something like 30baht per liter. Gasoline prices where I'm at in the US are down about 25% from the highs, from about $4/gal to about $3/gal. I'm hoping to see prices below $3/gal very soon. It would also be nice to see similar drops in LoS.

I filled my car up at Tesco in England the other day, if I remember correctly the price of regular unleaded was £1.02 / liter which means it has gone down quite a bit. It cost around £58 instead of the £65+ I was paying a couple of months ago.

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

I've always figured 3.78-ish liters to a gallon (1 liter = 0.264172052 gallon)....my last tank of diesel cost about $3.25 a gallon.

[dumball]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

Diesel was still pretty high when I was up at the house last week, something like 30baht per liter. Gasoline prices where I'm at in the US are down about 25% from the highs, from about $4/gal to about $3/gal. I'm hoping to see prices below $3/gal very soon. It would also be nice to see similar drops in LoS.

I filled my car up at Tesco in England the other day, if I remember correctly the price of regular unleaded was £1.02 / liter which means it has gone down quite a bit. It cost around £58 instead of the £65+ I was paying a couple of months ago.

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

I've always figured 3.78-ish liters to a gallon (1 liter = 0.264172052 gallon)....my last tank of diesel cost about $3.25 a gallon.

So , when it alls comes down to the nitty-gritty , all of your arguments and precision measurements according to personal thinking and calculations etc , what is the bottom line as North Americans like to say ? What is the 'Physical' consumption of fuel to facilitate your daily needs for work , visits to the beach etc , Americans accumulate something around 100% more mileage than a Brit , so despite the cost of fuel at the pump , Brits hold the advantage on overall driving costs , therefore cost per gallon becomes irellevant .

[Spee]

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

Anyone in the UK who is pissed off about high fuel costs should start with their own <deleted>' government first. Approximately 56% of your petrol cost is government taxation. That's the power of central government in depriving you of your right to keep more of the money you have earned and spend it as you see fit. Instead, they take your money and spend it as they see fit. That's taking it up the gazoo with no lubrication each and every time you have to go to the pump. I'm substantially unsympathetic. (BTW, Yanks are only slightly better off, where state and federal tax accounts for roughly 15-25% of the cost.)

[dumball]

I buy a case of booze a week from a local Mom and Pop store on my way home.

I know the amount of stock they have on hand and I know when they get more in as I pass the place twice a day.

When fuel prices went up they increased the prices of the cases of booze that they already had in stock and was delivered when fuel prices were lower.

Oddly enough when prices went down they decreased the prices of the cases of booze that they already had in stock and was delivered when the fuel prices were higher.

I just came to the conclusion that most small shopkeepers just don't have a clue of pricing according to market economics and make it up as they go along.

This is really a common practice. They are not charging you for the item itself but rather for their cost of replacing that item.

It is obvious you have been in buisiness for many years , god bless you .

[khunandy]

lowering prices in Thailand ! I think this thread should be in the jokes and funny stories section .

While there will always be unexpected (and not so unexpected) fluctuations in the price of oil the rule to thumb is that : Oil goes up US currency comes down , Oil goes down , US currency goes up.....that , to me is the gauge that has stood me good steed for a few years now.

Comments like dumball's are just that...dumb

Edited October 12, 2008 by khunandy

[whatsoever]

There is also the fact that the oil refineries like PTT etc didnt pass on all the increases in crude prices to customers at the pumps - indeed, they were selling fuel at a loss for a while. They will doubtless want to recoup some of that while they can.

I'm sure the same applies to airlines.

As usual your take on this is utter BS

[surface]

What stuff? Manufactured stuff? Think of all the steps involved in a price increase (or decrease ) due to the costs of oil.

1. Oil to refineries

2. Refineries to pumps.

3. Production of raw materials.

4. Rail, boats, trucks, planes transport materials needed for manufacturing.

5. Manufacturing of goods (with more expensive materials and higher transportation costs).

6. Shipping new higher priced goods to customers, distributors, retail outlets, etc.

As you can imagine, with all of the industries and companies involved here, prices will not come down quickly, if at all. Partly to make up for lost revenue during the increase, partly to hedge against volatile energy prices, partly from greed. Businesses will be reluctant to lower prices anyway until prices level out for while due to volatility.

[Brigante7]

as far as i can tell airline prices and other items from food to clothing prices have stayed the same?

whats the deal?

inflation?

did they just decide that they can make more money charging more on less volume?

In a word, Yes. Seems like Thailand is just the same as the UK, robbing cun_ts.

[Brigante7]

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

Anyone in the UK who is pissed off about high fuel costs should start with their own <deleted>' government first. Approximately 56% of your petrol cost is government taxation. That's the power of central government in depriving you of your right to keep more of the money you have earned and spend it as you see fit. Instead, they take your money and spend it as they see fit. That's taking it up the gazoo with no lubrication each and every time you have to go to the pump. I'm substantially unsympathetic. (BTW, Yanks are only slightly better off, where state and federal tax accounts for roughly 15-25% of the cost.)

56%? I wish, try more like 80%.

[Spee]

For those Americans that are here there are 4.5 Liters in a Gallon which means in the UK right now petrol costs £4.59 per gallon which is equivalent to $7.80 / Gallon, and this is cheap. Aren't we lucky ?

Anyone in the UK who is pissed off about high fuel costs should start with their own <deleted>' government first. Approximately 56% of your petrol cost is government taxation. That's the power of central government in depriving you of your right to keep more of the money you have earned and spend it as you see fit. Instead, they take your money and spend it as they see fit. That's taking it up the gazoo with no lubrication each and every time you have to go to the pump. I'm substantially unsympathetic. (BTW, Yanks are only slightly better off, where state and federal tax accounts for roughly 15-25% of the cost.)

56%? I wish, try more like 80%.

I was quoting from here.

http://www.theoildrum.com/node/3756

"In the UK, gasoline tax is .50 GBP per liter plus 17% VAT ($3.75/gallon before VAT, $4.42/gallon with VAT)."

I thought I had it pretty close with fuel at about 1.10/litre. Possibly my arithmetic was a little off. In any event, the point remains the same.

Before anyone takes gasoline suppliers and oil companies to task for production and delivery cost fluctuations in the open market (of which increases always get passed on to the consumer), they should first go to the government and ask why they must endure a painful anal probe every time it is time to fill the tank.

In the UK, filling the tank once a week for 50-60gbp, that's roughly an additional 1500 quid per year in taxes. For someone only making 15k-30k a year and trying to feed, house and educate a family, that is nothing less than highway robbery.