Posted by scottr on Tuesday, October 03, 2006 at 5:47PM :
In Reply to: Along those lines posted by jack cain on Tuesday, October 03, 2006 at 3:31PM :
I would say this is due to start-up costs, to change the process of current refining wold be a major cost and nothing is forceing refiners into looking into changing the process, ( other than the clean air act that drives the low sulfur regs)
as for the cost flip that was asked about, Norm hits the nail on the head again, nothing more than supply and demand. I have worked at a refinery for 15 years, and have close ties with our markiting, at times I have more invantory than I can move or have room to store in our tank farms, so, I ask our guy's to drop the price and get this stuff out the door, or find a sale. As you would expect finding a sale is the first choice, if that fails, the price will be dropped at the racks to move the product, when this happens I rarely see it reflected at the pump, the retailers and transportation companies keep the price up and enjoy good profits for a while.
When people start to use "the national average" as a bench mark for their local market, their often upset, but are also un-educated to the local market and it's supply.
I should get off my soap box eh?
I'll add this, oil companys, refiners, suppliers are in this to make money, they are not a public service. If you were to put your house on the market right now, you would expect a realitor to get the best price they could and do a little "offer - counter /offer" with the perspective buyer, wanting the best price, this is the same for the companies moving engry for a living.
I try hard to keep this forum related to the trucks we all like to work on, sorry for the long comments.