|
posted to rec.boats
|
|
|
Fuel prices moving up, just in time for spring boating and driving?
wrote:
snip..
When prices were at their peak last year, there were frequent comments
from Limbaugh, etc, that it was because "The liberal environmentalists
have been fighting the oil companies every time the companies want to
put up a new refinery!" I think the air went out of that balloon when
it was pretty well established that no oil company has even sought a
permit for a new refinery in the US for several decades now.
The basic problem is that there is no meaningful competition in the oil
business.
The free enterprise model is broken.
Let's say that I was in the business of selling center console fishing
boats, and my market research showed that I could expect to peddle 25
new boats a year in my market area. If I wanted to do business like the
oil companies, I'd order only 17 boats, proclaim a "shortage", and
demand a premium price from each buyer as I let each one know they were
just darn lucky to be able to buy a boat at all. If I jack the price up
high enough, the profits on those 17 boats would exceed the profits
realized on 25 boats sold at competitive prices. However, in the real
world where there is actual competition, my business plan to create a
false shortage would fail. Somebody selling another boat across town
would realize "Gould is driving away prospects with his high prices, so
instead of the 25 boats *we* normally order in a year this year we'll
order 33. We may have to discount them a little to be sure we don't get
stuck with a lot of inventory in the fall...." That's how the system is
supposed to work, but the oil companies seem to be in collusion rather
than competition these days.
When they closed the local Ultimar refinery, they dismantled it and sold
all the valuable parts to UAR in the Persian Gulf.
Now we have one refinery in the entire province.. Imperial Oil (Exxon ?)
http://tinyurl.com/nt3lo
|