So now we are paying $3.30 or more per gallon. Why? Because we are getting a royal shaft.
Think about it. The price of crude at the well head has not increased. But, the traders, fearing that there MIGHT be a shortage in the future, are driving up the price investing in futures. Yes, sometime in the future they will be paying more for crude. But not now!
So why has your local gas station suddenly increased the price by $.30 or more? Because they are giving us a royal shaft! The gas in their tanks was delivered last week or even earlier. It was purchased under a contract that may have been in effect for 6 months or more. Whatever! The cost to the station has not yet increased. So why have they raised prices? Because they can and get away with it. If you ask them, they will say "Oh, the price has gone up because there is a global shortage." BALDERDASH! We have a several month reserve sitting in tankers.
What can we do about it? Nothing! Oh yes, if you could somehow get all the drivers in an area to agree not to buy from a single station, whether BP, Shell, Exxon or whoever, that would have an effect on that brand in that area. But all the other stations would continue to rake in their obscene profits.
It will be interesting to see, at the end of 2011, how many billions in profit the major oil companies are reporting.
So do you feel loved? No way! We are all getting the royal shaft, and not even getting a hug and kiss afterward.