Good.

'bout time oilcos made a decent stash. 17 /20 years in recession.

If you dont like the price, dont buy the product.

But if you really , really hate big oil and the attendent service companies, then I have no doubt that the state certified mentallist retards (you call them Congressmen and Senators) will windfall tax them and break them up.

After you have rogered your own oilcos (and caused about 500 000 layoffs in the only bit of none real estate sector of the employment register left) you will only have to deal with the really, really big boys who actually call the shots.

They live in KSA and Russia.

And they dont play by your Congressman's rules.

They have there own rules and they dont even publish the book...

As I have said elsewhere, gasoline prices are realigning to the relationship to oil prices that had been exhibited all the way up to July 2004 (the Democratic Party Convention in Boston). Instead of an overlapping cost (relative to a baseline date), they have been largely on parallel tracks. Only recently has gasoline again approached the "old" relationship.

I drove through NY, PA, and am now in Ohio.

Weirdly, gas prices were the same in all three states. Usually, gas prices are so much cheaper in Ohio that I try to gas up at the border. And PA is so much cheaper than NY that again, I often make a special stop near the border.

I've been doing this trip for over 10 years now, and this is the first time Ohio gas prices haven't been significantly cheaper. Very strange.

New Jersey is still cheap, though.

"New Jersey is still cheap,"

About $2.95 here in South Jersey across from Philadelphia.

Not only that but they pump it for you. No self service in New Jersey.

I pretty much buy the argument the OC's make.

IMO a very big component of the higher gas prices is the huge devaluation of the U$S compared to even just last year.

The overly complicated distribution arrangements always insure that there are a few middlemen making a profit for very little added value, but that's the way with everything in this system

A hefty gas tax would be a solution, but it is a catch 22 in the sense that with that much money involved it would be virtually impossible to find a mechanism to administer it without a big part being stolen or rerouted to special interests.

IMO the system needs to crash before it can be rebuilt, for the simple reason that it can not be fixed in the current political environment.

Look what moveon.org is doing ("stop gouging"):

http://pol.moveon.org/stoppricegouging/o.pl?id=10385-1373658-gQBsbT&t=4

Very sad. And as long as the public remains ignorant, it's only going to get worse.

ExxonMobil, owning their own up and down stream divisions, could sell at a loss or reduced profit on the retail end...

I presume this, selling below market price, would be a step towards rationing by queuing rather than price. How long would people be prepared to queue for a 20 cent discount?

Boy, I have to say for the most part I've come to expect much better from the Oil Drum, but this is a lame argument about how the oil industry works. First there's not one number in the damn thing and all sorts of meaningless statements like, "Not all oil companies own refining companies." or "At every level of these distribution chains, people are trying to buy low and sell high." And you guys blast the politicians - hah.

But to take an article that is well over a year old and put it up and not address the very real spike caused this Spring, and this is no secret, at the refinery level is to say the least not helpful. Here's a list of US refineries, so everyone can see just how much the oil companies are in fact involved in the refinery business http://en.wikipedia.org/wiki/List_of_oil_refineries#United_States

A simple question for the recent spike is why have so many refineries gone down at once, and that won't be answered without subpoenas. All the rest is just speculation, but you think the oil industry as a matter of good faith would open their records, don't you think? No foul, no harm, eh?

The oil industry is comprised of a lot of vertically integrated oligopolies, and I'm including national players in this, not just the old whipping horses, that explains how it works to a great a degree as market dynamics. To simply dismiss the market power of these entities is ludicrous.

I support $5 a gallon gasoline and as little of that as possible should go to the oil companies.

Paraphrasing Simmons:

Whether it's fair or not, the reality is that if the oil companies continue to make huge profits, the government will find a way to take it away from them.

I've never agreed with this idea that you guys push occasionally, that it is the retail gas stations which are responsible for high prices and "gouging". Surely anyone can see that gasoline retailing is by its very nature one of the most competitive businesses in the market. Not only are gas stations found on street corners throughout the country, with competing stations usually only a few blocks away at most and often right across the street, they are required by law to post their prices in large, clearly readable signs! This is a perfect recipe for robust market competition and is the last place in the production/delivery chain where one would see gouging and monopolistic behavior.

This is really priceless
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&D...

WASHINGTON (AP) - Decrying near-record high gasoline prices, the House voted Tuesday to allow the government to sue OPEC over oil production quotas.

The White House objected, saying that might disrupt supplies and lead to even higher costs at the pump. The Organization of Petroleum Exporting Countries is the cartel that accounts for 40 percent of the world's oil production

We don't have to stand by and watch OPEC dictate the price of gas," Judiciary Committee Chairman John Conyers, D-Mich., the bill's chief sponsor, declared, reflecting the frustration lawmakers have felt over their inability to address people's worries about high summer fuel costs.

The measure passed 345-72. A similar bill awaits action in the Senate.

Separately, at a House hearing, lawmakers were told that crude oil prices have played a relatively minor role in the sharp increase in gasoline costs over the last three months, putting the blame on lower gasoline imports, refinery outages and continuing growth in demand from motorists.

Gasoline prices "may ease somewhat," Guy Caruso, chief of the Energy Department's statistical agency, told the House Energy and Commerce investigations subcommittee. But he said pressure on gas prices will remain strong "with the hurricane season approaching, continued tight refinery conditions, low gas inventories and increased demand for summer travel."

Nevertheless, the House felt it was important to take on OPEC, whose member states last t year agreed to cut production by 1.1 million barrels a day to counter what had been a buildup of world oil stocks.

Conyers accused the OPEC engaging in a "price fixing conspiracy" that has "unfairly driven up the price" of crude oil and, in turn gasoline.

His measure would change antitrust laws so that the Justice Department can sue OPEC member countries for price-fixing, and would remove the immunity given a sovereign state against such lawsuits.

But the White House said President Bush will be advised to veto the bill should it pass Congress because such suits could spawn retaliatory measures and "lead to oil supply disruptions and an escalation in the price of gasoline, natural gas, home heating oil." global oil production.

Lawmakers have been frustrated over their inability to counter the surge in gasoline prices that last week averaged just under $3.22 cents a gallon, within a half penny of an historically inflation-adjusted high in March, 1981.

"As politicians ... there's no other issues of greater interest to us than gasoline prices and the impact it's having on the American public," said Rep. Ed Whitfield, R-Ky., at a hearing by the House Energy and Commerce investigations subcommittee.

Rep. Bart Stupak, D-Mich., the panel's chairman, told of a person in his district complaining that gas had increased 21 cents a gallon over 10 hours this past weekend.

But the latest price surge at the pump may have had little to do with OPEC oil production.

"Increased crude oil prices have played a relatively minor role in (the recent) increase in retail prices," William Kovacic, a member of the Federal Trade Commission, told Stupak's subcommittee. He said the price of benchmark West Texas crude increased no more than 15 cents a gallon over the last three months, while retail gas prices jumped 80 cents to 90 cents a gallon, depending on location.

"Big Oil is often quick to blame world crude oil prices, but that argument doesn't appear to be the full story," said Stupak.

"While consumers pay record prices, oil companies are making record profits," said Stupak. Refinery profits have jumped sharply to as much as 70 cents for every gallon of gasoline produced, he said.

PG,

You should make a 'repost schedule'. Something like: every time the price of gas crosses a mark, you will repost this post. Say every 50 cts?

$3.00, $3.50, $4.00 etc. That would mean you have to repost this about every year or so.

Prof G,

First many thanks for all your contributions....

I don't agree with your gas tax. It's political suicide...by itself.

However, with some encouragement and honesty this infertile field might be tilled to produce an acceptable harvest: if the government [either party]stops denying and comes out and admits that spare capcity is thin, that world crude production is in a stall, that crude prices will more than likely trend up before down, that as a precautionary measure citizens should think about owning at least one gas sipping vehicle, if not an electric, and that this war on energy will have to be a group effort and require some sacrifice, that being a tax, retrograde or otherwise, then the gas tax might fly. By itself, the tax is punishment and kryptonite to whomever embraces it.

Superman

According to Ophelia Payne at National Gaswatch Institute the real culprit in all this is the China National Bank who have been using their vast holdings of dollars to manipulate and kite crude prices. Bank president Li Gao Jing has been overheard discussing the strategy more or less openly at cocktail parties.

Certainly the public is misguided in focusing their anger primarily on the oil companies. But where else can they focus it since they haven't a clue as to PO? And why not? The oil companies themselves are not telling the truth -- certainly Exxon isn't.

But this is not just the oil cos, it's the MSM and the gov't. A gov't that told the truth about what's coming and was willing to face it would not be kind to the oil cos. Profit would not be the prime consideration in all decisions.

The oil cos are guilty, but not primarily of what they are accused. They are the beneficiaries, or would be if they (the gov't) were more successful, of the wars for oil. They are perhaps not quite as directly guilty as the "defense" industry.

Ultimately it is not a blame game. We are addicted to oil and the unrestrained pursuit of profits. Both addictions have to be overcome. Who's to blame is who is stands in the way of overcoming those addictions. It will take a long and uphill political struggle to overcome those addictions and the pushers. Some might say it's impossible, but nothing else is possible -- except total disaster.

ExxonMobil, owning their own up and down stream divisions, could sell at a loss or reduced profit on the retail end, provided they compensated their convenience store owners for their lost gasoline revenues (these stores are franchises). But that would make whatever cut they did offer twice as financially painful—they would take the announced cut and associated reduction in profit, and then have to pay the store owners their traditional profit to keep them happy.

Ummmm... why would they have to pay the store owners? The store owners make a certain percentage markup on the gas. And yes, the amount they make would drop, as a result. However, as you pointed out, the margins they make on gas are tiny, and they make most of their money selling food, etc.

Now, if you're driving down the road and Shell is charging $3.00 and the Exxon is charging $2.50, which one are you buying from? Now that guy at the Exxon store is making a little less on gas, but now he's got customers lined up around the block to get his gas and eat his snack cakes, etc.

Even if you accept the basic logic of your statements, fine, they have to fall on the sword twice, but then they just make it a smaller sword, non? What matters in the end is the total off their bottom line, so who cares where they ultimately take that money from, it all ends up balancing out in the end.

hee, hee, hee,

I come home from a day's work and have the most fun reading this little string I have had in weeks here! :-)

It is often said that sex brings out the fool in all of us, but one has to give high gasoline prices a close second place!

Well, let's see what we have learned so far from the combined wisdom here at TOD, and see if we can seamlessly fit it into the combined wisdom of our national political establlishment and of course the intellectual giants who operate the large oil companies (see, that sentence alone causes one to smile ear to ear! :-)
(I will attempt to play my traditional role of "gadfly" in the Socratic tradition, and see how many people I can pizz off in one night, and make no pretense to wisdom {I know, rare for me}

1. First the keypost by Prof. Goose, admitted to be a rerun, but it's summer, so that is traditional, and besides, this whole debate is something of a re-re-re-re-re-run, isn't it?
The first link to the outside world, but actually to another "interested party goes to the site Environmental Economics in which a Tim Haab says "I'm angry. I can't believe we're right back where we were a year ago."
Now, I am going to assume that Mr. Haab is a young man, because if he were not, he would know that we are right back where we were 30 years ago. Yes indeed, almost every proposal I have heard about how to bring down the price of gas and break the monopoly of the hated oil companies goes back to pre 1977. And in a testament to the durability of the markets, they have run along on their own merry path, up when the spirit moved them and down when the spirit moved them, but seeming to have little interest in what the politiicians were doing. Who will bet their money that it will be any different now than it has since "back in the day". Remember that the most dangerous phrase in the markets is "this time, it's different." If your gutsy, it's o.k. to bet that way, just so you know your taking the long shot bet.

2. We then have a rather long and involved description of how oil markets work. Prof. Goose seems to have it down pretty good, but could have used far fewer words and saved a lot of writing had he simply said, "all parties involved make all they can make, at the lowest possible amount of risk they have to take."
But who am I to defend brevity?

O.K., so far, what else have we learned? The next one always interests me:

3. Do NOT, I repeat, do NOT say anything negative about the oil companies at The Oil Drum, unless you are willing to incur the full wrath of the posters and editors of The Oil Drum. The zeal with which a defense of the oil companies will be mounted is nothing less than inspiring to watch, as anyone who displays any doubt about the overall charitable and kind heart and spirit of altruism of the oil companies will be sliced and diced from many sides at once. Most any doubter of the nobility of the kind and loving corporate overlords who are the oil companies of America will slither away with their tails between their legs, properly chastised for their complete lack of understanding of the good and noble intent of the oil companies. Perhaps one can take a shot or two at KSA or Russia, but they will not make the mistake more than once of being critical of the oil industry here, and they will learn that lesson well.
Does anyone except me find that situation interesting?

Of course, it is fortunate indeed that none of the abuses we have seen in other industries are possible in the oil industry. During the electric power crisis in California, for instance, tapes now released record the traders of electric power calling on power plants to "do an unplanned maintainence sort of thing" and take power plants offline, and swap power into and out of California at the most, how would we say, "convenient" times. Of course, in California power, you had "competitive" companies, much like you have among the major oil companies.....Enron, Calpine, Williams, Aquilla, Dynergy, etc., so just as in the oil and refinery businesses, it was well known that monopolistic and illegal practices on a large scale were impossible.

And thankfully, the gasoline market cannot be handled in such a way. And of course, we know that no one would be able to capitalize on the surprisingly stable and open "free market" that is the futures market in gasoline:
http://finance.yahoo.com/q/bc?s=RBM07.NYM&t=5d

So, where have we gotten to now? It's admitted by the posters of TOD that "the oil companies are doing nicely", but of course, they spent decades not doing so nicely, and no one seemed to mind that....(on the other hand, that was harder on the poor basturds out in the oil patch than it was on the folks in the executive suite, but that's true in every industry isn't it?

Truth to tell, if there is any refinery "opps, unscheduled maintainence colusion, the government sure does not know enough about how a refinery operates to ever catch them at it, so all Uncle Sam can do is make a few threats to try to keep things somewhat in line (just as California threatened Enron, Calpine and others in the California power market with having the National Guard and the state police take over the power plants....something they know they couldn't do, {how many state troopers does it take to run a power plant? There's a joke in that.....I heard it only took one, to hold the pistol to the plant managers head and make him order his men back to work....:-)

So we are playing out the 35 year Kabuki dance, government threatening, oil companies playing innocent victims, public sucking down fuel and refusing to consider alternatives {and playing innocent victims) and shareholders making enough in increased profit and dividend to pay for fuel at whatever cost, and enjoying it while it lasts. (and playing innocent victims}

It is like so many of these fake dances in America: The public is asked to take a side....will you side with millionaire doctors or millionaire lawyers or multi millionaire insurance companies.....millionaire ball players or millioniare team owners....millionaire recording studios or millionaire performers.....multi millionaire politicians or multi millioniare oil executives....and of course, the answer becomes who really gives a fvck.

So what's left?

4. The OPEC lawsuit. :-)
One assumes that will take just a bit longer than it took to break up a much smaller organization, Ma Bell, so it has to be said it will be an assured 45 year long case, easily enough to carry a young lawyer through his or her whole career on that one case alone, unless he or she shoots themself from boredom first. Long live Western jurisprudence and all it has brought us.

5. TOD's role in the Kabuki dance. It is so fascinating to see that on a board that is normally anti-market, anti technology, anti growth, anti American, and anti groceries from WalMart, to name a few of my prized American institutions often attacked here, that such an odd mixed bag of anti-corporate, anti progess, anti business tree hugging greenhouse gas worrying ex beatniks, aging oil drillers, statisticians, and deep green neo primitivists and doomers can actually come to an agreement so readily and shout in one long melodic chorus:

YOU LEAVE THE OIL COMPANIES ALONE!

Ah, the loyalty, the dedication to a cause, my eyes tear up.....it just makes me proud to be an American!

Check the mailbox, Maudie, is the dividend check in yet?
A person has to have priorities in life......:-)

6. My role in the Kabuki dance: Man, I do love satire....as for the big catastrophe, just keep Diesel below 12 bucks a gallon (helll, I can buy Wesson oil one gallon at a time new at Walmart and get by for less than that!), and get back to me after the World Series, when we will all be saying "just you wait, my bet is that it all comes undone next summer, you'll see....", and "Way to go Cincinnatti Reds, new world champions!

hey, one's as likely as the other......:-)

Roger Conner Jr.
Remember, we are only one cubic mile from freedom

Indy

Did anyone realize that petrol costs less than milk? About the same as coca-cola? Less than Perrier?

Mark Janovici on his website analyzed the effect of tax on fuel consumption. In summary, if you really believe in market forces, tax is a suitable instrument of government to drive mass behavior, in this case economical use of a resource, petroleum.

Tax is also the mechanism of forced savings to pay for the infrastructure changes required.... high speed rail.... unified national rail network... (public rail bed, private rail rolling stock) ... analogous to public highways private trucks. Why not??? think out of the box...

Along the way you might go for universal medical service... ever notice that no one wants private fire departments? Any where? Including Russia? USA? That's because they don't work... unless you want fires that is... they were tried.. and every time.... one or more enterprising firemen discovered the profitability of lighting fires to put out.

Same with rail.. Public rail systems work... want free enterprise and less bureaucracy? Then public rail beds.. private rolling stock.. paying user fees to use them... Dual track lines... Elevated high speed lines....

Where the money? A Rail Trust Fund.. it can absorb the existing highway trust fund.. use the existing interstate right of ways...

And yes... gas needs to be taxed... or at least the whopping subsidy for it in the USA needs to be eliminated.. The subsidy I speak of is the US Military and US Intervention Costs which amount to $16/gallon apparently...

But whom will have the balls to do it?

Indy

This post is so full of errors and gross over simplifications it is difficult to know where to start

1) there is no such thing as "techron type gasoline". Techron is just an additive (a very good one) added to normal gasoline. It is true that gasoline is traded and sold as a fungible product especially in the pipelines. Players put in X bbls of on spec product and get back X bbls of on spec product with no guarantee of getting the same bbls back. In places like the SF bay area, big companies like Chevron run their own dedicated pipelines and generally sell their own gas to stations. Ditto any locale where the gas is trucked directly from refinery loading racks. In places like NY Harbor where the Colonial pipe ends, where many import terminals exists and there are refineries, you could have all sorts of combinations going on. All a station guarantees you is the minimum industry specs + the proprietary additive packages in the case of the majors.

2) "Oil companies are not setting the retail price except via the NYMEX, where they sell to refiners. "

this is silly. very little oil actually gets deliverd via the NYMEX. Prices of crude other than WTI may well be getting the bulk of their price set by NYMEX but the sales price of crude (there is no "retail" price of crude) is negotiated between the buyer and sellers for each transaction. E.g, the price of Nigerian Bonny Light might be set at July WTI + $X basis delivery NYH. Or it could be a fixed price or basis Platts on date of delivery for DTD brent + $Y or whatever the parties agree.

The use of "oil companies" is vague; many would assume that term meant a vertically integrated oilco like Exxon. Better term would be upstream producers.

3) the "double sword" falling on by Exxon is all fouled up. Exxon could cut its gasoline wholesale posted price or Dealer Tank wagon price to retailers if they wished. The retailer could then put on their normal margin. there is no double whammy. Of course, most dealers would just match Shell across the street and keep the difference as extra margin.

4) the para re gouging only occurring at local levels ignores the refining margin data. Nymex product cracks are a simplistic proxy for refinery margins. In the mid 90's a refiner would be happy to see Gasoline - WTI at $6-8. Right now with RBOB at $2.3/gal X 42gal/bbl = $96.6 - $65 WTI and I get $31/bbl!!!!!!!!! Refiners are coining it. I don't consider this gouging but it's hard to lay that 60 cts/gal improvement on the retailer.

5) retail station gasoline markups are much higher than a nickel. Even the highest volume stations were taking double that a decade ago. Smaller stations with less volume were as much as 25 cts according to my neighbor who owned an independent station and my marketing side buds.

This article is not up to the usual standard of this site.

I might as well weigh in with the article I wrote last week on this subject:
There's a Hole in the Bucket
...in which try to explain to the layman that:

• Gasoline-buying boycotts are silly and pointless
  
• Gouging isn't the reason for high gas prices, refinery capacity is
  
• High prices are easily traced to plain ol' market activity due to supply and demand
  
• There is no evidence of conspiracy amongst refiners to limit capacity, but there is plenty of evidence that refineries will experience shutdowns due to overdriving the equipment
  

And I actually wrote a note to MoveOn yesterday explaining that their position on "high" gas prices, and that of the Congress, is wrong-headed and ought to be aborted.
The MSM isn't helping the public to understand these issues at all, so I think the duty falls to us.
Can we educate them, in plain language, and use this opportunity to call for voluntary reduction in demand?
--Chris Nelder
Energy consultant, writer, blogger GetRealList

These discussion of the major oil companies as if they were truly entities separate from the US State are absurd, as are any conclusions derived from such a premise. Neither one has ever existed without the other, nor could. Costs and incomes are arbitrarily assigned to one part or the other, and then "profits" are carefully calculated as if it meant something. What about huge costs such as defense and infrastructure like the highway system? Why should what is effectively an arm of the State be entitled to any profits at all? And as for the argument that the minors are not in the same boat - what would they look like if the majors were not there, and the massive petroleum infrastructure were not already existing?

Don't look behind the curtain - yup, it's all real, and those "captains of industry" are really worth the money they're paid. I'm sure I'll hear how it's the average John and Jane Doe who own shares of these "companies" who are reaping the rewards, but in the end I expect the investments of the little folks will evaporate, while the big-time crony capitalists will always make out.

Conspiracy? Beats me, but it all adds up to a process of stripping money from the populace to line the pockets of the very wealthy. So don't put up with it anymore - fill your car up with something other than gasoline from now on! Yeah, right.

Is it so hard to grasp that while peak oil is real, so is corruption? Much of it is so ingrained in the structure of the system that it is hard to even see anymore.

This article seems to be confused about how things work today. A long time ago there were independent operators but today there are franchisees who own nothing. When API claims that 95% of retail outlets are independently owned they are including franchises. In a franchise you really don't own anything, you buy your inputs from the franchisor, you put your store where the franchisor says and usually you rent it from them. So as it turns out the operator is a glorified employee, not much more. Here is an article about the problems a Shell franchisee had. Here is some commentary from another forum I am part of that discussed this very issue:

I'm not going to join in the tit for tat. What I will say is that I owned a gas station for a number of years and sold out a few years ago. The gas companies (franchisors) have the independent owners over a barrell (pun intended) when it comes to cost. They only allow you to get .06 to 08 cents a gallon before they raise the price to you. They raise rent on stations where owners net over 50k a year. Believe me, the retailers aren't making crap, only the companies. Yes, they check each others prices and adjust with them to maximize profit (raise cost to you so their margin goes up, not yours). It's a bad business to be in unless you are the franchisor, already 8 stations closed down within 10 miles of me because of the greed of franchisors wiping out retailers.
.

thanks for joining the conversation. Did you always buy your gas directly from the franchisor, or did you get it from a distributor, or both?
Did you make enough on gas to stay open, or did it zero out and leave you with groceries etc. supplying your profit margins? Where those stations have closed down, what has replaced them? Did you ever get any pressure to sell out to the company? What do you think of the trend to combine a branded gas franchise with a branded food franchise (Texaco with Taco Bell and/or KFC, for instance)? Good for the franchisee, or not?

You have to buy it from the franchisor. What I always found interesting is that you could see receipts for gas going to other stations and see they were being charged different amounts for the same gas. If your station was in an affluent area, they would charge you more so of course, your prices would be higher but your profit margins would be the same as they guy in a poor area. The franchisor would of course, reap the additional margin.

Gas sales were a loss leader. When you consider you only make 6 or 8 cents a gallon, then subtract credit card fees, other costs associated with pumps (even stolen nozzles and hoses), the only reason to sell gas was to get customers for the store and repair shop. If you had a bad month in repairs or in between weather month when c-store was slow, you would hurt.

The stations that have closed down- all but one sit vacant, with the grass gowing tall, pumps torn out of the ground. One has been torn down and a commercial building is being built.

The company pressured me to sell to Middle Easterners because they bring over all of their relatives to work at the station and many end up living in the back. I guess they are more devoted franchisees. Many own multiple stations and through some connections they have get special pricing on c-store items.

Gas is a loss leader but drives in quantities of customers so if you have something else that they would want, it could work. However, I have one about 12 miles from me that is gas, krispy kremes and a Burger King and I don't think they are head over their heels in cash flow. To make a profit on gas you really need to sell over 350k (depending on your expenses) a month and even then, it's not much. Also, the more franchisors you have, the more other people have a say in how your business is run and what prices you can charge. I would avoid doing that because, as with gas, their interests are often different, and detrimental, to yours. They try to charge so many hidden fees, add on costs, percentages, etc.. that it makes it not worth it. They even charge you when someone uses a credit card at the pump (that the computer authorizes) when it turns out that it was an unauthorized transaction and you and your employees had no involvement in the transaction (just the company provided computer at the pump that is customer swiped).

There was another owner near me that when they found out how much he was making, they raised his rent from 4k to over 11k per month. They won't allow you to make more than they determine to be acceptable. Lots of costs you'd never think of. They create programs that you are required to pay for even if you dont use. I paid 600/mo for advertising to the company just to receive a few banners in the mail every month to hang up. The only one making money on these deals are the franchisors. In some states, the franchisor cannot legally run the business. Therefore in states like mine, all stations are independently owned.

The franchisors/gas companies don't care if you go out of business. Why not? Because they sell gas to anyone that will buy it. They would sell to my competitors but have it delivered by an independent carrier so that customers wouldn't know they were getting the same gas. It's like being an arms dealer. You sell to both sides of a war and end up being the one who wins out (financially) in the end.

I just thought this person's comments and those of the operator in the SF Gate article would shed a little more light on this misleading story posted here.

Let's put a tariff on imported oil that balances the US military expenditures in the region. ($200 billion plus annually?) If we don't, why is it fair for US taxpayers to fund the security/police force that keeps the oil tanker trade routes open and secure, directly benefitting and subsidizing:

1. Multinational gasoline marketers (Exxon, Shell, Chevron, etc.).
2. Middle Eastern countries and some of their people, many of whom support and/or become our terror enemies.

Security is a hidden cost of gasoline that US taxpayers front. The gasoline consumers, never see this cost at the pump and the myth of low gas prices is perpetuated. The Multinational Gasoline Marketers (MGM's) have an ally in the US government in perpetuating the false low price of gasoline and growing their market for this product. No wonder alternatives to gasoline powered cars are having difficulty getting traction.

Check out my 4-minute YouTube video for another perspective on this problem:

Oil Importers Should Cover US Military Costs In Middle East
http://www.youtube.com/watch?v=95e0wsSorLM

Not all oil companies own refining companies. In fact, a very few actually own their refineries. They just find, drill and produce crude which they sell on the NYMEX or other markets, to refiners. A refiner can take crude from anybody—Exxon from Shell, Chevron from BP, etc.

Very few oil companies own their own refineries?

I read this in an article recently.

Major oil companies dominate the refining industry. The top 10 U.S. refiners, all of them major integrated oil companies or refiner/marketers, control more than 80 percent of all domestic oil refinery capacity. Of those top 10 U.S. refiners, four of them (ExxonMobil, Royal Dutch/Shell, British Petroleum PLC and Chevron Texaco) are the top four refiners in the world.