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Maybe in Economics 101 but in the real world I have seen companies (like water) raise their prices because people were using less due to a drought.
While I agree that if the demand is lower and the supply is high the prices should go down but in today's economy it seems the companies will raise their prices to keep the profits coming in if the demand is lower. Strange but it happensComment
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I have a 2018 Tesla Model 3 with 42k miles and a 2010 F-150 with 72k miles. I am number 43,000 on the wait list for a Cybertruck. We are retired and rich (by my standards). We have taken our Tesla on 2,000+ mile trips and never had to be towed because we ran out of battery. We got a flat once and had to be towed to the tire place. Pretty much I have been a gear-head most of my life with a 1966 Mustang, a 280ZX and a 1965 427 Shelby Cobra. I worked for an oil company for my 37 year career. I would never buy an ICE vehicle again because the electrics are so much nicer, more fun to drive, cheaper to operate and better for the environment. Every year, more and more people experience what a delightful change it is to drive an EV. It is the future for sure. Having oversized solar panels just makes this better. I can wake up every morning and have a full tank of electrons in my tank at almost no cost to me. I live in California and have not seen the extra charge for a road tax. I think it is fair to charge EVs something for their wear and tear on the public roads. I am 70 and hope I live long enough to see the impact of EVs on the air in California. I have to say I am somewhat repulsed when I think of all the gasoline I have bought and burned into pollutants into our environment. With solar panels to generate electricity to charge my EV to drive around is simply amazing! Sure, I generate solar power during the day and charge up at night, but it is still free electrons. I also wonder at my age what I'm I doing buying a $100k Cybertruck truck when I doubt I'll put more than 20,000 miles on it before I die. I suppose I am going to do that because I can. Solar panels and electric cars are a match made in Heaven...Comment
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You are correct the fundemental free market economics often are not working. That is another reason why I wanted more control of the cost of driving a vehicle. Have you ever noticed the ratchet effect when gas prices go up in a crisis but they never ratchet down to the levels the were before the crisis. We can be a slave to that or we can make choices to not be subject to that kind of manipulation.
I do fell sorry for folks that can't see what is coming and are going to have to pay high prices just to drive an ICE.Last edited by Ampster; 04-20-2022, 12:43 AM.9 kW solar, 42kWh LFP storage. EV owner since 2012Comment
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Right - but that's a public utility. Politicians set those prices.
The oil business is (or is at least supposed to be) more of a free market. And I can guarantee you that if oil companies see refined gasoline piling up in storage facilities, they are going to want to move it, rather than build more storage facilities.
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One thing I learned when my father and uncle use to work for one of the big oil companies is that other companies will purchase the gasoline and any other product that they produce. You can't hurt an oil company by not purchasing their product because someone else will. Unfortunately gas prices will not come down until the oil company says so and if they want to make a profit (which they do) then expect the prices to stay high. They won't need to build any storage facility because other people with those will purchase the product.
We can all invest in an EV and oil will still be expensive because it is used in just about any product (chemical or plastic) that is made. Oil my friend will be around as long as people are alive and want to purchase things.Comment
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I think you have missed the point of many of these posts about the economic benefits. . Glad to see you agree oil will still be expensive and of course that makes the economics of driving EVs more attractive. Oil will remain as an essential ingredient in the plastic which we all consume.Last edited by Ampster; 04-21-2022, 02:22 PM.9 kW solar, 42kWh LFP storage. EV owner since 2012Comment
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Yes oil will always be around, but we need to minimize the polution it
is causing. As for plastics, I am appalled that so much plastic use
continues. Despite the polution it causes, an example of the
power of cos and the uncaring public. There was a lot of stuff in
reusable glass in my younger years. Bruce RoeComment
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Supply and demand still holds.
When there's a supply shortage, every gasoline refinery can charge whatever they like. But if they are producing even 1% more than they need, then it starts to pile up. So refinery A says "hey, price it a little lower to move this gas; we will then also get more of the market." Refinery A gets more of the market. Refinery B then realizes they have to reduce prices to remain competitive and move THEIR product. And so on and so on. They all want that sweet, sweet cash.
This has been going on forever, and it's why gas prices have been going up and down. In 1980, gas was $4.10 a gallon (adjusted for 2022 dollars.) One of the results of this were higher CAFE standards that drove MPG numbers up and consumption down. Gas prices started dropping as well. They went from $4.10 a gallon to $1.85 by 1998. This was due primarily to the increase in fuel efficiency; gas demand actually went down from 1980 to 1985. It did not return to 1980 levels until about 10 years later. Then gas prices started rising again.
More recently, during the pandemic, gas demand cratered. It went from 9 million barrels a day to 6 million; gas prices dropped with it. Oil prices followed suit. Tight oil (i.e. oil obtained by fracking) is not economical below about $70 a barrel - so many oil companies shut down their fracking operations.
Then 2022 rolled around and everyone's FOMO had them buying gas and driving everywhere to make up for lost time. Consumption rose dramatically - and so did prices.
In the short term gas prices will remain high. They are actually historically about average; today they are around $4.17 per gallon compared with $4.10 in 1980 (again in adjusted dollars.) They will remain that way for a short time as the summer driving season kicks in. Then as oil companies ramp up production and demand slows at the end of the summer it will drop again. In the long term they will continue to drop as EV's and higher CAFE requirements reduce the demand for gas.
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Maybe what you say is true. One can only hope prices will come down for those reasons instead of what I feel is the root cause. But that is another story.
The sad part is that EV's are still not cheap or available all over the US like they are in some places. But the infrastructure is changing (slowly) and charging stations for all type of EV's will start to pop up. I just think it will not happen in my area as fast as it may happen in cities.Comment
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