SEARCH BLOG: OIL
Watch the pendulum and repeat this phrase: "You have gotten used to high gasoline prices. You have gotten used to high gasoline prices. You better have gotten used to high gasoline prices."
Prices normally peak in summer and then decline after Labor Day. Around here, you could have purchase gasoline for about $4.10 per gallon in early summer. Now it is about $3.70.
That's roughly a 10% drop. It saves you about $6 on a 15-gallon fill.Oil prices peaked at around $146 a barrel in early summer and have declined to under $103 today.
That's about a 30% decline. Are you being gouged by the oil companies?On the surface, the answer is obviously yes. That's the problem with surface or superficial answers. Like oil, sometimes you have to dig a little deeper to find the real answers.
The real answer is as the price of oil rose to its peak, gasoline prices did not increase proportionally. There was too much resistance and refiners had to eat the costs. In some cases, that might have been one division of a company losing money or not earning much while another division earned a lot. In some cases, the refiners were independent of the oil sources.
So, why haven't gasoline prices gone down? Because refiners are now able to charge a normal mark-up for their product versus their costs.
Remember, you have gotten used to higher gasoline prices. So the refiners don't feel as much pressure to reduce gasoline prices more...