Price Hike in the Oven, Timer is Counting Down

Comment on the July 1 prediction:  One of my better ones, as prices rose just as predicted.  CORRECT!

Sunday, July 7, 2013, 10:30AM:  On Tuesday, the “spot price” for the Chicago area was about $2.64, which corresponded to a price to retailers of $3.33, after all taxes and other costs are factored in.  We saw a hike that day to $3.59.  Since Tuesday, the spot price has risen to about $2.79, leading to a price to retailers of $3.48.  With prices in the Grand Rapids area at about $3.48, that is a recipe for a price hike on Monday or Tuesday.  Prediction for new price:  $3.69-$3.74. –Ed Aboufadel

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17 comments on “Price Hike in the Oven, Timer is Counting Down
  1. akash says:

    so if the cost to retailer after all taxes is 3.33 then what adds in to make it 3.59? or as per your prediction of 3.48 to 3.69-3.74? corruption fee….?

  2. Brent says:

    Oil is up, so gas goes up. Here comes $4.00 again.

  3. Phil says:

    “what adds in to make it 3.59? or as per your prediction of 3.48 to 3.69-3.74? corruption fee….?”

    They also try to make a bit of profit on the fuel…

  4. Ed Aboufadel says:

    Phil is right. When you run a business, you try to sell your goods for more than you pay for them.

  5. BTC says:

    I filled up yesterday at a Speedway south of Indy, off the Bloomington/Columbus exit, for 3.19. The Shell station right across the street was 3.29. The low price in Lansing when I got back into town was 3.39, but most places around my area of town are 3.45. I used my 30 cent Kroger discount and filled up everything I could last night.

  6. independent retailer says:

    Ed
    Cost on the 2nd to me: 3.38. Cost for today: 3.53.
    @akash We are here to make a profit. And in my case, to support my family and the families of my 15 employees. The “corruption fee” is added in higher in the “food chain”
    @Ed thanks for the support!!

  7. TimmP says:

    Amazing that some (so many) people think that a station can pay for their electric, their pumps, the building, the taxes, the employees, and all that and more, and sell their product at the price you pay for it, or less. The absolutely WILD swings in retail pricing does help fuel (no pun intended) this resentment, tho, I believe.

  8. tireman says:

    Spike to $3.69 today in Grand Rapids

  9. Norm says:

    With the price of oil going up I can’t help but think the situation in Egypt has the speculators on edge. Hence the prices of the finished product rise on fears of a supply disruption.

  10. ChrisDG74 says:

    $3.55 in Ohio.

  11. akash says:

    @Ed, Phil, and Independent Retailer,
    Good to know that ‘profit making’ is the part of business. I agree and have no object to it. Though, why there is a random order of profit making? a spike of few cents a refinery always reflects in 30+ cents of spike at the pump! moreover, being gas retailer does not spare you from being gas consumer or does it? thus, do you feel the pinch as other consumer feel when the spike comes that too unjustified 30+ cents every time without any explanation. being an insider, don’t you feel responsible for making it an honest business. I am sure that it will still leave a lot of space for profit making! I understand the chemistry part of gas very well and therefore, in my earlier posts also I had brought up this issue: the cost of refining the crude doesn’t change what changes is the cost of crude at the stock market. thus if one counts all the costs keeping the cost of refining fixed (that it should be!) then the price of gas will come under $3.00 and yes, it will include your profit as well in addition to taxes and other charges. Now while I understand the chemistry very well on this, I do not understand, the magic of number that keeps the price in $4 region instead of $3. Can you explain me the math? I approached the AG and got a 6 pages letter with gibberish that makes no connection with what I asked him. Am I correct in assuming that this profit is made in all stages of oil business and thus, in a way it is correct to say that on the name of profit, corruption has been legalized as there is no limit to which one can raise the bars to profit making. retailers raise to 30+ cents and refiners keep it almost $1 above the actual value and the Sheikh in Gulf keep it the highest at almost $2 above the actual cost of mining crude!

  12. TimmP says:

    Just a few things, as I have observed over my almost 50 years of buying gas, and reading. 1)Sometime in the 70′s and 80′s it seemed like oil companies broke into smaller divisions. Every single division was now responsible for making their own profit, rather than the entire process making a profit overall. Result…higher costs to consumers. 2)The free market is driven by supply and demand, but these can be manipulated (not really a free market then) 3)When oil producers in foreign lands were nationalized, they no longer were in competition, this allowed price fixing by target production amounts thus keeping the supply lower artificially. 4)Oil transport via boat is not as cheap as transportation via pipeline. 5)if demand at the pump drops, then refined gasoline can be sold overseas, keeping the “demand for refinery products” high. 6)If demand is weak, and sales of refined products to overseas destinations doesn’t keep prices high enough, time for an unexplained maintenance problem, or emergency “scheduled” maintenance. 7)If any portion of the process in #1 above is not profitable, it is simply eliminated, thus causing a bottleneck in the process, and forcing the price up again. And it goes on and on and on. This is very easy to do now that there is only 8 to 16 day stock of refined gasoline in the US at any one time. Back in the 60′s it was almost a month’s supply.

  13. TimmP says:

    Fasten your belts. The last time (about 16 months ago) that crude was this high, retail gasoline was $4.12. With the market happy at 100k new jobs (when it would take 18 months of 600k monthly new jobs to get back to 2007 employment) making crude climb, and the Egypt thing climb, here we are, at almost $110 a bbl.

  14. Chris says:

    Looks like crude is well on the way to the 2008 high of $147 a barrel. Any major economic crashes on the horizon?

  15. Sam says:

    I heard on GMA this morning that the “unrest” in Egypt is the reason this time and that if an all out civil war breaks out, we will be seeing prices well over $4 a gallon. For now, the national average is $3.50 and they are predicting a 20 cent hike. They should come to Michigan where we get 30 cents at a time – yeesh.

  16. akash says:

    so egypt that produces around 680K barrels of oil and exports only about 70K barrels that too in european markets will be cause of price hike in USA where we don’t even get the oil. where is the profit making theory fitting here. or simply put; greed = profit! as TimmP mentioned that breaking down into individual sub-sector and asking them make there own profit is doing all these. if the oil and gas which comes under commodities market is essential commodity of US economy then why is left in the hands of greedy corporations (oil companies) instead of bringing in the govt. of regulation on prices related to the incomes of citizens of country? I think there is no profit making happening, its all greed and, ‘the more the better’ pscychic. I don’t buy the justification under the definition of social fabric under which most of the consumer america is defined, its the ‘greedonomics.’

  17. akash says:

    forgot to attach the link in the earlier post. here it is: http://wiki.answers.com/Q/How_much_oil_does_Egypt_produce#page2

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