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Just About and More .......


On Wednesday, the price of a barrel of crude oil jumped $4.19 to reach $133.17 a barrel. Within 24 hours of this announcement the gas prices at pumps on Ninth Street (and no doubt across Lawrence) rose from $3.65 to $3.79. Can anyone explain this immediate 14 cent rise to me? How did those more expensive barrels of oil get to Lawrence so quickly? The gas already in the pumps, and that arriving just before many travel for the week-end was purchased at the lower price so why are we paying higher prices TODAY?Not to be outdone, some airlines are jumping on the bandwagon although, unlike the gas vendors in Lawrence, they have given us some advance warning. American Airlines will charge $15 for checking one bag after June 15. They blame the rising fuel prices. Discount airlines like Spirit in America, and Ryanair and Easyjet in Europe already charge for bag check-in, but they sell pretty cheap tickets. I flew from England to Ireland in April for $40-return with carry-on luggage. The ticket was 2 cents. Tax and fuel charges made up the rest but it was a pretty good deal. American Airline tickets will remain high, even increase, and the luggage charge will be added to that. I wonder if other airlines will follow suit, or hold out in the hope of gaining passengers annoyed with American Airlines?Meanwhile, as prices rose on Wednesday, top executives from the five largest oil companies were being questioned by Senate lawmakers about the effects of rising oil/gas prices on folks like us. The executives blamed crude oil for the rising gas prices. Mr.Expensively-dressed Well-fed ExonMobil-executive claimed his company only made about 4cents on every gallon of gas it sells in the US. Poor people only 4 cents a gallon profit? So, how come the gas prices in Lawrence jumped 14 cents within 24 hours of the price of crude oil being raised?


Linda Hanney 8 years ago

Eileen, it's a know fact that slowing down out on the open road is a big gas saver. No one can claim ignorance on that fact anymore. We recently returned from a road trip. Driving 60 to 65 mph, we were passed constantly. The SUVs and big pickups seemed to be going the fastest. Interestingly enough, when we did encounter a vehicle moving at a slower pace, it was a small high mileage/hybrid car. The high price of gas has become a common topic, but slowing down to offset some of the extra expenditures doesn't seem to be an option when the tire meets the pavement.

David Lignell 8 years ago

Eileen,When you find the answer, let us all know. I'd like to blame the emerging middle-class in China and India, or the greedy oil companies. My gut tells me, however, that the US is finally seeing the impact of excessive energy consumption. I see my kids leave the lights on when they're out; I make the extra run to the grocery for a gallon of milk; I flick on the air conditioner at the slightest hint of humidity; and so on... Guilty as are most Americans. I read somewhere that the US has 9% of the world's population, but consumes 80% of the world's resources. That's probably incorrect, but I'm too lazy to Google it. Anyway, I think we're finally feeling the pain in gasoline that the Europeans have felt for many years. We're a soft and soiled lot, eh?

devobrun 8 years ago

Supply and demand, Eileen. Supply of energy is not increasing. Demand is. Oil company profits are about 10%. Most well run companies in Lawrence, Ks. make profits of this margin. If Exxon returned all its profits, you would still be paying $3.something for a gallon of gas. Exxon must get its oil from the gulf coast with its risk of hurricanes. It must get its oil from Russia, Venezuela, Nigeria, Indonesia, Iraq.....all carrying significant risk. So, you and the senators want Exxon to make no profit for taking this risk? Exxon pays the Fed and states more $ than it pays its shareholders. If Exxon returned all its profits to the consumer, tax revenues would take a big hit. People would still burn gas like there is no tomorrow.The increase in $/barrel is just what everybody wants. More revenue to the gov't. Less CO2 emission. More $ for pension funds. It all adds up. Gov't is happy, environmentalists are happy, Business is happy......You're just the consumer, Eileen. You count for nothing in this calculus except a vote. This is why senators are grandstanding and the oil execs are just sitting back and taking it. The execs know that, really, the senators aren't going to do anything except bloviate.

Linda Hanney 8 years ago

My husband purchased gas two nights ago and was told the gas truck that was delivering at the time had $4.00 gas on it. For whatever that is worth.

eileenroddy 8 years ago

Yes, I can see the supply and demand part of all of this. I suppose my confusion is how do the gas stations in Lawrence, and all over the country, change their prices so quickly?On Wednesay the gas was $3.65 a gallon at stations on Ninth Street; on Thursday morning it was $3.79 (and the obligatory nine-tenths of a cent) and by Thursday evening, two of the stations had reduced it to $3.75 - or let's just call it $3.76, and it's still at that price this morning (Friday.)In that short space of time, the more expensive oil didn't have time to be processed never mind delivered. The consumer is being handed on the rise in oil well in advance. That's the part I'm stil trying to find answers for.I visited two gas stations and asked them how often the tankers arrived for deliveries. Unfortunately I told them I was confused about the immediate rise in prices and they declined to comment.

Sigmund 8 years ago

eileenroddy (Eileen Roddy) says: "Yes, I can see the supply and demand part of all of this. I suppose my confusion is how do the gas stations in Lawrence, and all over the country, change their prices so quickly?"Coincidence in time is not necessarily causal, meaning the recent price jump you saw was not caused by the price in oil rise you mentioned. The current price jump was related the past rise in oil and the cost to refined that oil into gas months ago which just made it into your tank. Just because they were closely related in time does not mean one caused the other.

Alison Carter 8 years ago

Eileen,Thanks for generating some very knowlegeable responses to questions many of us have. We only hear the headlines and soundbites the media puts out and I'm not sure most reporters understand the economics of what is happening in our world today........it's all fascinating and real but too boring and complicated to be a news story.....we need more input from civil responders to your blog....i.e.sigmund and devobrun......they know what's shakin'Keep asking those questions, Eileen....and you'll draw even more substantive blog responders.Thanks

Alison Carter 8 years ago

Now that's a good tip, Linda.Thanks!

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