Low fuel prices=lower cost for goods?

[Oh Haha]

Back in 06-07 when gas prices first started rising we justified increases on vending items due to fuel costs. It was my key discussion point with customers to get their approval. We even added fuel surcharges for some customers.

At my most recent company we did fuel surcharges as well.

Now that prices have declined SO much should we start seeing prices fall on everyday goods/services?

I have not noticed any decrease in groceries since I have been doing the shopping for our family.

[Rick V]

And you won't. It's called greed. Companies and corporations care about nothing but the bottom dollar. I think ti would be fair to say that the companies that are now keeping the "fuel costs" are not giving any of the money to the workers at their facilities. Rest assured those with the ties and leather chairs are sleeping well.

[widebody911]

Originally Posted by Rick V

And you won't. It's called greed. Companies and corporations care about nothing but the bottom dollar. I think ti would be fair to say that the companies that are now keeping the "fuel costs" are not giving any of the money to the workers at their facilities. Rest assured those with the ties and leather chairs are sleeping well.

I doubt I could have said it any better myself.

[Oh Haha]

That's pretty much what I was thinking which is disappointing.

I wouldn't expect decreases when it was just .50 cheaper per gallon but here in MI it is literally 2.00+ less than a year ago.

[vonsmog]

Problem is diesel has not dropped like gas has, and all the trucks that move those goods use diesel. So what you save in gas, you spend on groceries!

[wdfifteen]

One of our shippers is still billing a fuel surcharge.
We aren't paying it.

[sammyg2]

Originally Posted by Rick V

And you won't. It's called greed. Companies and corporations care about nothing but the bottom dollar. I think ti would be fair to say that the companies that are now keeping the "fuel costs" are not giving any of the money to the workers at their facilities. Rest assured those with the ties and leather chairs are sleeping well.

Take evil profits and give them all to the workers!!!
UNITE KOMRADES!!!

People invest in a company expecting it to be profitable and to return them interest on their investment, otherwise they would not invest.
The company belongs to them, it's their money, their company.
It DOES NOT BELONG TO THE WORKERS and they have no right or claim to the profits unless they buy shares of the company. They work for a wage and they get paid even if ther company is not profittable. For a while at least.

The guys in the suits and ties are employeed by the company to make sure the owners get a return on their investments.
If they don't, the price of shares goes down, the cost to operate goes up, the availalble cash to run the company dries up and the company dies. ALONG WITH IT THE JOBS OF THE WORKERS.
In other words, it's the job of the suits to make sure the company survives and is viable. It's their job to make sure the workers STILL HAVE JOBS.



When fuel prices come down that reduces overhead which increases profit. That generates extra capital which companies use to pay down debt to be more stable, and eventually increase investments in itself, expansion, sales growth, which all CREATE MORE JOBS.
It also ensures the viability of existing jobs, creating job security and more room for raises.
For companies with profit sharing, bonuses, etc. it could also means more money in the pockets or the employees.
But that's usually just for us suits

Greed is not a bad thing. It is not evil. it is not someone to be discouraged. Greed is simply wanting things.

Greed is a great motivator. It is the carrot and the stick.
It can motivate people to do great things. Or it can motivate people to do bad things. It all depends on their character and nature and upbringing.

It has a bad rep because uncontrolled greed can expose certain character flaws which lead to people making bad choices. They want somethnig, so they break the rules to get it.
Greed is not the cause of the rule breaking, their bad character is the cause. Greed was simply the motivator.

Our entire free market system is based on greed as a motivator, and it is what makes us great.
It is what makes us try harder, work harder, and succeed. It makes us and our system STRONG.

The alternative is a political and economic system based on the lazy, unmotivated, and those who do the absolute minimum to get by. Take away all rewards for hard work and you eliminate hard work altogether.
Which is why that system fails everywhere and every time it's been tried.
The only ones who benefit and support that type of system are the ruling elite and those who are naturally lazy and inmotivated and already do the absolute minimum to get by. Those who would typically FAIL when forced to compete.

IOW Loosers.

[sammyg2]

Originally Posted by vonsmog

Problem is diesel has not dropped like gas has, and all the trucks that move those goods use diesel. So what you save in gas, you spend on groceries!

Diesel has come down, just not as fast as gasoline. We're selling diesel for $1.59/gal.
A price that is determined by the wholesale market, suppy and demand.

We're also selling gasoline for $1.20/gallon. About 10 million galls a day of it.
That price is below what it costs us to make it.

[Shaun @ Tru6]

Originally Posted by Rick V

And you won't. It's called greed. Companies and corporations care about nothing but the bottom dollar. I think ti would be fair to say that the companies that are now keeping the "fuel costs" are not giving any of the money to the workers at their facilities. Rest assured those with the ties and leather chairs are sleeping well.

Well said! For the past year or two, greed has been something I've thought a lot about. It is a major part of our undoing in this country. In the robber baron days of past, we had government to even the score, which, along with unions, built the Middle Class and built out country.

Unions have become as greedy and corrupt as the Corporations they were created to stand up to and Government, on both sides of the aisle, have become complicit in fostering greed at the expense of the nation.

The Almighty Dollar, it's worshiped today more than any God has ever been.

[VINMAN]

Sammy, why is diesel so high now compared to regular? A buddy of mine that works for Hess, says a huge factor is with the USL crap.

As far as prices for goods going down, whens the last time anyone was in a supermarket? the prices are out of control. I don't know how anyone affords to feed a large family.

.

[creaturecat]

Au contraire, in Canuckistan.
Low oil=low Canuck dollar=high prices for commodities.
Great buying/holidaying opportunities north of the border for our southern friends.
C'mon up. We even have a Bush-ite for a president!

[john70t]

It's unnatural and temporary.
Don't place all your bets on this manipulation.

[sammyg2]

Originally Posted by VINMAN

Sammy, why is diesel so high now compared to regular? A buddy of mine that works for Hess, says a huge factor is with the USL crap.

As far as prices for goods going down, whens the last time anyone was in a supermarket? the prices are out of control. I don't know how anyone affords to feed a large family.

.

There are two prices: wholesale and retail.
The wholesale price is determined by good old supply and demand.

The typical oil refinery in the US was built during or right after WWII. Back when we needed gasoline and not diesel.
They have been continually upgraded over the years to increase the percentage of diesel they make, but for the most part this average applies:
for every 3 gallons of crude oil that is processed, the yield is 2 gallons of gas and one gallon of distillates (diesel or jet fuel).
That's where they get the 3-2-1 crack spread from.

And for many, many years that spread was just fine. But over the past 20 some odd years the increasing demand for gasoline has slowed while the demand for diesel has grown at an increased rate.
Refineries have made modifications and many have increased the percentage of dielsel they make but thatis an complicated expensive and time consuming hting to do. It takes hundreds of millions of dollars, many years, and unbelievable amount of red tape, permits, and gubmint beurow-cratic BS.
Where I work we are doing just that $$$$$
and it'll take a couple more years, and the percentage will only swing about 15% from gas to diesel.

So, in the world view refiners can make all the gas we need and then some, but can barely make all the diesel we need.

We have more gas than we need here and they have more gas than they need overseas. That drives the price of gas down bigtime.

We have all the diesel we need here which would normaly drive the price down.
But overseas they could use a little extra so that keeps the price there supported at a higher level.
Since their price is still higher, it supports our price because if we chose to we could export our diesel and make more money. The only way to keep it here is keep the price competitive.
That is straight out of ECON101, a class that should be manditory in order to get as high school diploma IMO.
That is WHOLESALE.

Now, let's talk retail. the two are not tied directly together.

The wholesale price for diesel has dropped further and faster than it has at the retail station.
If the retail had dropped even with wholesale, the price at the pumps would be around $2.75 a gallon.

So why the lag? Retailers are resisting lowering prices because they are making a friggin killing right now.
Money hand over fist.
The price they pay for it has dropped a whole lot more than the price they sell it for, and that puts money in their pockets and they are digging it.
The consumer is watching prices fall and is happy to be paying a little less each week, no one is crying because prices are falling too slow. That lets the retailer drop prices slower.
Remember most retail stations in the US are independently owned or operated.

But, they also know that the prices will eventually even out and level off. Then their profits will be smaller than normal because even if they sell the same volume the price will be much lower which will reduce total profit.

And on top of that, the chances are that prices will eventually rebound. Maybe not all the way but at least part way.
And when they do, the wholesale price will climb first and retail will lag. That means no profit during that cycle.

Gotta make hay while the sun shines.


PS
So why do we all the sudden have so much more gas and diesel and what does that have to do with the price of crude?

Crude price fell so refiners bought as much as they could and processed it full blast.
And so on and so on.
They were already running full but were able to crank it up to 11 so to speak. Maybe an additional 1%.
Gradually the supply crept up until it almost caught up with available storage.
Oopsy. That tipped the scales and started the avalanche.







.

[Hawkeye's-911T]

Au contraire, in Canuckistan.

Hey 'cat
Good one!!

Cheers
JB

[Rick Lee]

Originally Posted by VINMAN

As far as prices for goods going down, whens the last time anyone was in a supermarket? the prices are out of control. I don't know how anyone affords to feed a large family.

I think you can blame a lot of that on the ethanol scam, since so much of our food economy is corn-based in some way.

[VINMAN]

Thanks Sammy. Always wondered how it went from always being so cheap, to so high.

Originally Posted by Rick Lee

I think you can blame a lot of that on the ethanol scam, since so much of our food economy is corn-based in some way.

True. the price of beef( which a lot of it is corn fed) is astronomical. Glad I live on chicken.

[Laneco]

Commercial chicken feed has corn in it (least everyone I've looked at). Corn is often the first ingredient, meaning that it has more corn than any other single ingredient. Corn, corn meal, or corn gluten. Seems like those are the 3 that I've seen most often.

Other than perhaps grass raised, etc., I suspect that pretty much all the commercial meat in this country was raised or finished out on feed with corn as a major part of the diet.

angela

[island911]

Originally Posted by Rick V

And you won't.[see prices drop] It's called greed. Companies and corporations care about nothing but the bottom dollar.
.

Yeah, this ^ is exactly why prices at the pump have remained so high - greedy beotches.

oh wait.

Seriously, what's with the denial of that little concept called competition?