Booze, Baseball, and another "B"

Tuesday, August 23, 2005

How the hell did they know that I got gas?!....

This AP article, was interesting to come across, since I was thinking about this topic just the other day when I was filling up my car.

As I was pumping liquid gold into my car, I mean GASOLINE, I was wondering to myself: "how much money are gas station owners making on each gallon of gas they sell" and "how much gasoline theft is there?"

The answers to my questions are "about 1 penny per gallon" and "approximately 1 out of every 1100 fill ups." Both answers are from the National Association of Convenience Stores (according to the article).

As the article points out, to try to combat gas theft, stations have made people prepay, but of course prepaying cuts down on trips inside the gas station, where the products that make the money are located.

So what's the solution to this problem? One solution (which has problems) would be to have the gas companies operate gas stations. Of course, this would cut a huge chunk of small business out of this country, and on top of that, the gas companies would just skyrocket the price of gas, instead of bring it into more realistic territory, to ensure their profits. Tesoro does operate some stations of their own, and when I told an investing-enthusiast I know about that (after he was bragging about picking up shares of this refining company, Tesoro), he just about crapped. Everyone knows that operating gas stations is a low-margin business, unless you're AM/PM, who have a huge advertising campaign to try to boost the sales of their high-margin products. I haven't seen Tesoro's financial numbers, but I would imagine that they have a multi-year plan associated with this.

Another solution, which of course can't really happen, would be the government taking control of the gas companies. There may come a time in the future, when the world really does have wars fought over gasoline and we are all still relying on fossil fuels because the gas companies have worked so hard to keep alternatives away from the public to ensure our continued reliance on fossil fuels, when this option does become a reality. Until then, gas companies will be free to price-gouge us all.

Poking around on Yahoo Finance today, they have articles from both the WSJ and USA Today on ways that people can pinch their pennies a little more when it comes to gasoline. This one, from Bankrate.com, gives ways that people can get more fuel economy out of their car. One way they omitted, which is one of my favorites, is to go GT-style and pull up right on someone's rear bumper and pull a nice draft off them. I have yet to see figures stating the increase in fuel economy, but I would be that it's comparable to taking the bikes and kayaks off your roof rack (I am joking here, in that it's very unsafe to do this, but I am serious that it does increase gas mileage).

Another article from USA Today, has a couple of interesting statistics in it. According to the article, in 2002 the average low income American spent approximately $750 per year on gasoline, about 8% of a 9,000 income. They say in 2005 that figure will go up to $1000, 11% of their income. These figures are from the research director of the Consumer Federation of America. Both of these figures are low; the percentages are much higher than that. The problem with these figures is that they use a national-average price, which is always substantially lower than the actual price of gas. Going by these figures, a person would spend $83 per month on gas. Using the now-in vogue figure of $2.55 for gas (which is lower than the actual price), this hypothetical person is only buying 7.54 gallons of gas per week. Assuming an average miles per gallon figure of 20 MPG for this group, they would be traveling only 150 miles per week, or 20 miles per day. One of the people interviewed in the article drives 60 miles per day.

So what does it all add up to? The same thing that people who care about low-income Americans have known for a long time, they have to spend everything that they make on staple purchases (food, housing, energy costs), leaving them no spending money nor money for savings. That means: increased debt, decreased home-ownership, increased crime, depressed economy, and increased taxation of the poor.

With the skyrocketing prices of gas, I have not checked, but I would be willing to bet that the number of people going to get food from food banks and the number of people applying for food stamps has increased a lot. And of course, with the skyrocketing price of gas, people have less money to spend on making donations to charitable organizations such as food banks.

So what does all of this add up to? The same thing it always has, the rich are getting richer and the poor are getting poorer. And gas is too expensive.

People say there are two certainties in life: death and taxes. Uncle Jason says that there are 3 certainties in life: death, expensive gas and taxes (depending on my mood I might add some other certainties).

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