Another hike coming up? Or not? Who’s getting rich?

Saturday, February 26, 5:45PM:  Wholesale gas prices shot up 25 cents the past week, leading to two price hikes and a current retail price of $3.45.  I can’t predict what is going to happen this coming week.  The other day, rumors that Libya’s Gadhafi was dead caused market prices to temporarily drop, which is just an example of how crazy it is.  I think the 0-cent margin price is about $3.35 today, so given past practice, prices could have risen to $3.55 on Friday.  Maybe they are trying to spread out the pain over several days.

So, who’s making money off this spike in prices?  Anyone who possesses oil or gasoline.  Station owners who have gas in their underground tanks that they bought for cheaper prices last month are making some extra money by following the Big Red price leader, but those owners are left holding the bag if wholesale and retail prices fall after they pay $3.35 a gallon on Monday to fill their storage tanks.  The government takes its taxes, which are based on how many gallons are sold and how the price per gallon, so a bit more is being collected due to the price spike.  Gasoline refiners are probably earning more, but the big winners must be the oil producers, as half the price of a gallon of gas goes back to them.  Sometimes that is the oil companies, sometimes it is landowners in places like Saudi Arabia, Russia, Alaska, Texas, even North Dakota. If things get worse, perhaps the Strategic Petroleum Reserve will help. — Ed A.

Updated: February 26, 2011 — 5:48 pm

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