3 ms·

Your friend is right. They literally have record-breaking income right now[1]. It just headlined the FT two days ago. This is also happening with distributors/u

Your friend is right. They literally have record-breaking income right now[1]. It just headlined the FT two days ago. This is also happening with distributors/utilities. 1. https://www.ft.com/content/0d84255c-84ba-4462-b80a-8593352852e2 https://www.ft.com/content/0d84255c-84ba-4462-b80a-859335285...

algoatecorn 4y ago
That doesn't mean they are right. This is a complex topic that I don't have time to write a thesis on at the moment. Some things to consider: cost cutting 2014-2019 enabled much higher profits when demand went through the roof, alternatives and substitutes, how is the price of OIL determined?, spot vs future, refinery capacity, how much of oil -> gasoline is vertically integrated, who oil producers sell to, who buys the oil, who distills it. So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone? Are prices being gouged, or are there intricacies in this system which have compounding price effects on supply and demand hiccups?
- guerrilla 4y ago
  > So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone? Yes, the entire supply chain, at least in my country. It's been news for quite a while. > Are prices being gouged, Yes and there's a lot of talk of intervention for that reason, even in the US.
  - benj111 4y ago
    Have you got figures to back up your assertions that the entire supply chain is price gouging? Or is this purely on the basis that you're experiencing high prices so anyone that passes on those price rises are defacto price gouging?
    - guerrilla 4y ago
      > Have you got figures to back up your assertions that the entire supply chain is price gouging? This a false dichotomy. It's been in the news here pretty much constantly, especially in the financial press, to the point it's common knowledge. I'm neither digging up those articles nor translating them for you though. You'll just have to take my word on it (or not.)
      - tacker2000 4y ago
        So you are not going to substantiate your claim and just say its “common knowledge” and “take my word”? Alright then.
      - benj111 4y ago
        How is it a false dichotomy? Price gouging would show up on the P&L it's very easy to demonstrate. Citing unnamed newspapers and 'common knowlege' doesn't demonstrate anything, or inspire confidence. Petrol stations tend not to be very profitable. Not knowing where you are I can't say whether you're the exception. But as petrol is fungible, unless you're accusing them of collusion or something I don't see how they could price gouge. Same with refineries. So that just leaves the oil drillers. You have got OPEC and stuff, but the average non opec oil drillers have the choice of selling at the market rate or not at all. And I'm not sure how selling at the market rate, be that for massive profits, or a loss is price gouging. Unless you want to devalue the term.
- pessimizer 4y ago
  This is just a Gish Gallop. If you're not going to write a thesis, just find a single thing and explain why record profits there aren't actually gouging.
  - vba616 4y ago
    If powerful forces control prices, why do they go down? I don't believe in the gouging rhetoric because interested parties benefit from not only high prices, but stable prices, which we haven't seen. Unstable, skyrocketing prices encourage competition from alternative energy sources, right? I don't think we have to imagine an alternative to the situation in recent years, but can look to history for context. If you look at any really long term chart of oil prices, there is a dramatic change in the early 00s, from a regime of fairly stable prices to one where they skyrocket and crash. I think statisticians have a term for this: heteroscedasticity. It kind of looks as though energy prices were stabilized deliberately, and then those forces lost control. Maybe it was related to fracking, or the invasion of Iraq. Or maybe it was a reaction to newly perceived fragility of the Saudi monarchy. Or maybe it was because Russia became a bigger player not under the control of OPEC. Or the US, similarly.
vba616 4y ago
There's a Lukoil station near where I live. The price they are charging doesn't differ much from say Exxon/Mobil. Is that because they are colluding?
- m000 4y ago
  Of course they are. It is more profitable to hike prices to match your less-efficient competitors and maintain a facade of competition, rather than crushing them to become a monopoly and risk a heavy-handed government intervention.

algoatecorn 4y ago

That doesn't mean they are right. This is a complex topic that I don't have time to write a thesis on at the moment. Some things to consider: cost cutting 2014-2019 enabled much higher profits when demand went through the roof, alternatives and substitutes, how is the price of OIL determined?, spot vs future, refinery capacity, how much of oil -> gasoline is vertically integrated, who oil producers sell to, who buys the oil, who distills it. So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone? Are prices being gouged, or are there intricacies in this system which have compounding price effects on supply and demand hiccups?

guerrilla 4y ago
> So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone? Yes, the entire supply chain, at least in my country. It's been news for quite a while. > Are prices being gouged, Yes and there's a lot of talk of intervention for that reason, even in the US.
- benj111 4y ago
  Have you got figures to back up your assertions that the entire supply chain is price gouging? Or is this purely on the basis that you're experiencing high prices so anyone that passes on those price rises are defacto price gouging?
  - guerrilla 4y ago
    > Have you got figures to back up your assertions that the entire supply chain is price gouging? This a false dichotomy. It's been in the news here pretty much constantly, especially in the financial press, to the point it's common knowledge. I'm neither digging up those articles nor translating them for you though. You'll just have to take my word on it (or not.)
    - tacker2000 4y ago
      So you are not going to substantiate your claim and just say its “common knowledge” and “take my word”? Alright then.
    - benj111 4y ago
      How is it a false dichotomy? Price gouging would show up on the P&L it's very easy to demonstrate. Citing unnamed newspapers and 'common knowlege' doesn't demonstrate anything, or inspire confidence. Petrol stations tend not to be very profitable. Not knowing where you are I can't say whether you're the exception. But as petrol is fungible, unless you're accusing them of collusion or something I don't see how they could price gouge. Same with refineries. So that just leaves the oil drillers. You have got OPEC and stuff, but the average non opec oil drillers have the choice of selling at the market rate or not at all. And I'm not sure how selling at the market rate, be that for massive profits, or a loss is price gouging. Unless you want to devalue the term.
pessimizer 4y ago
This is just a Gish Gallop. If you're not going to write a thesis, just find a single thing and explain why record profits there aren't actually gouging.
- vba616 4y ago
  If powerful forces control prices, why do they go down? I don't believe in the gouging rhetoric because interested parties benefit from not only high prices, but stable prices, which we haven't seen. Unstable, skyrocketing prices encourage competition from alternative energy sources, right? I don't think we have to imagine an alternative to the situation in recent years, but can look to history for context. If you look at any really long term chart of oil prices, there is a dramatic change in the early 00s, from a regime of fairly stable prices to one where they skyrocket and crash. I think statisticians have a term for this: heteroscedasticity. It kind of looks as though energy prices were stabilized deliberately, and then those forces lost control. Maybe it was related to fracking, or the invasion of Iraq. Or maybe it was a reaction to newly perceived fragility of the Saudi monarchy. Or maybe it was because Russia became a bigger player not under the control of OPEC. Or the US, similarly.

vba616 4y ago

There's a Lukoil station near where I live. The price they are charging doesn't differ much from say Exxon/Mobil. Is that because they are colluding?

m000 4y ago
Of course they are. It is more profitable to hike prices to match your less-efficient competitors and maintain a facade of competition, rather than crushing them to become a monopoly and risk a heavy-handed government intervention.