Fuel Prices

I see what you mean. Managing a smallish private tank is one thing but
I can see in a commercial op where people exercise more mobility, it's
the only way to do it. And when price change radically, everyone gets
mobile.

Dan Youngquist wrote:
On Thu, 8 Sep 2005, Maule Driver wrote:

It's nice if your local supply keeps the price based on what they paid
rather than what they's have to pay to replace it. Our guys are doing
the former and I thanks them.


It's nice that they want to be nice, but if/when the price drops,
they're going to be in big trouble. No one is going to line up to buy
the expensive fuel they bought at the top of the market, and they'll
have to sell it at a loss. Whether the price is rising or falling, the
only way for the seller to come out even is to price according to
current replacement cost. They need to make a little extra money when
the price is rising, because they _will_ lose money when the price
drops. The narrower the profit margin, the more it hurts.

Oddly, the folks who get hopping mad at merchants who won't give them a
deal when prices are rising, are never around begging to pay a higher
price so the merchant doesn't lose his shirt when prices are falling.

-Dan

Dan Youngquist wrote:

It's nice that they want to be nice, but if/when the price drops,
they're going to be in big trouble. No one is going to line up to buy
the expensive fuel they bought at the top of the market, and they'll
have to sell it at a loss. Whether the price is rising or falling, the
only way for the seller to come out even is to price according to
current replacement cost. They need to make a little extra money when
the price is rising, because they _will_ lose money when the price
drops. The narrower the profit margin, the more it hurts.

If they charge based on replacement, and if prices DO decline, they can
adjust downward their current costs (higher) against previously lower costs.
If they price current fuel lower, they completely remove any capacity to
move prices down.

It's simply a matter of thinking more than a day ahead, something so many
people miss.


--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

On Thu, 08 Sep 2005 15:49:54 GMT, Maule Driver
wrote:

It's nice if your local supply keeps the price based on what they paid
rather than what they's have to pay to replace it. Our guys are doing
the former and I thanks them.

They are the ones without much business savvy and know nothing of
economics. If prices vary greatly and they do that they won't be
around long. OTOH if it's a municipality that purchases in quantity
it doesn't matter as much if they aren't trying to make a profit.

Roger Halstead (K8RI & ARRL life member)
(N833R, S# CD-2 Worlds oldest Debonair)
www.rogerhalstead.com


Now the big question is whether to fill our private tank as soon as it
empties or wait a few weeks for the price to peak and hopefully come
down just a bit. Who has the crystal ball?

N93332 wrote:
"Ross Richardson" wrote in message
...

We just got a new load of fuel yesterday and the price jumped from $2.94
per gallon to $3.52 per gallon for 100LL. I will have to pull the MP back
a little more.


Been 'lucky' so far! Our local strip went from $2.59 to $3 per gallon for
100LL a couple months ago. Checked the price this last Monday and it was
still at $3 when auto gas in town was selling for $3.09...

Where can I find an STC for putting 100LL in my car??? ;-)

-Greg B.

On Thu, 8 Sep 2005 09:40:58 -0500, "N93332"
wrote:

"Ross Richardson" wrote in message
...
We just got a new load of fuel yesterday and the price jumped from $2.94
per gallon to $3.52 per gallon for 100LL. I will have to pull the MP back
a little more.

Been 'lucky' so far! Our local strip went from $2.59 to $3 per gallon for
100LL a couple months ago. Checked the price this last Monday and it was
still at $3 when auto gas in town was selling for $3.09...

Not to worry, the 100LL will soon be above the car gas.

Where can I find an STC for putting 100LL in my car??? ;-)

Don't forget to pull the catalytic converter. Lead contaminates the
platinum catalyst.

Roger Halstead (K8RI & ARRL life member)
(N833R, S# CD-2 Worlds oldest Debonair)
www.rogerhalstead.com

-Greg B.

A buddy of mine that has a 1000 gallon tank called today. The wholesale
price of 100LL right now is $3.15 so we are going to wait a few weeks as
prices are coming down.



Ross Richardson wrote:
We just got a new load of fuel yesterday and the price jumped from $2.94
per gallon to $3.52 per gallon for 100LL. I will have to pull the MP
back a little more.

"Newps" wrote in message
...
A buddy of mine that has a 1000 gallon tank called today. The wholesale
price of 100LL right now is $3.15 so we are going to wait a few weeks as
prices are coming down.

How much reserve does he have, enough to wait out the dropping prices?


--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

Matt Barrow wrote:
"Newps" wrote in message
...

A buddy of mine that has a 1000 gallon tank called today. The wholesale
price of 100LL right now is $3.15 so we are going to wait a few weeks as
prices are coming down.


How much reserve does he have, enough to wait out the dropping prices?


He's just a private owner with a Cessna 172 that he keeps on his 25
acres. He has a 1000 gallon tank to make refuelling less of a hassle.
If he runs out he'll just fly into town here and get gas.

I've not studied the mogas market specifically, but most markets are
based on speculation, not current conditions. That basically means that
any benefit associated with the effects of Katrina are already built
into the price of gas. Its just like the stock market. When a company
announces a great new money making opportunity, you don't have to wait
for it to pay off in order to see the stock price go up, the stock
prices goes up right away on the expection (as long as investors see it
as realistic). This is call the "perfect market theory". As long as
everyone has the same knowledge base of information (something the SEC
tries to assure) markets will automatically price based on that fugure
information, not the current situation.

So, in short, I"m saying that any benefit of the end of Katrina to gas
prices has probably already been reflected in the market. It would be
interesting to see what fuel futures are selling for right now.

-Robert

"Robert M. Gary" wrote in message
oups.com...
I've not studied the mogas market specifically, but most markets are
based on speculation, not current conditions. That basically means that
any benefit associated with the effects of Katrina are already built
into the price of gas.

Speculation is based on trends forecasting, not disasters.

Its just like the stock market. When a company
announces a great new money making opportunity, you don't have to wait
for it to pay off in order to see the stock price go up, the stock
prices goes up right away on the expection (as long as investors see it
as realistic). This is call the "perfect market theory". As long as
everyone has the same knowledge base of information (something the SEC
tries to assure) markets will automatically price based on that fugure
information, not the current situation.

"Perfect Market Theory" has been debunked so many times over so many years
I'm surprised anyone still holds with it. Hell, von Mises debunked it back
in the 1920's.


--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

Speculation is based on trends forecasting, not disasters.

Actually, that is totally wrong. Speculation right now is 1) How
damaged are the oil rigs in the gulf, no one really knows yet 2) What
is left of the infrustruction, no one really knows yet etc, etc, etc
If you actually study markets you will find that specualation is ALWAYS
there. Investors buy based on future values and speculate on anythig
that can effect price.

"Perfect Market Theory" has been debunked so many times over so many years
I'm surprised anyone still holds with it. Hell, von Mises debunked it back
in the 1920's.

Certainly misunderstood huh? Cleary, you've misundestood it. I guess
its been debunked just like evolution, right? New theories come and
go all the time, it doesn't make existing ones wrong. A more detailed
undestanding of the scientific method would make that more clear.

-Robert, MBA