what's up with gas prices?

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Originally Posted By: Garak
There is a lot more competition within the fuel industry than you give them credit for, even in a place like here where fuel prices seem to change in lockstep. And yes, vehicle prices are rather strictly controlled by the market. An $80,000 Caprice wouldn't have competed well against an identically equipped $20,000 Crown Vic, now would it?


The oil industry's competition is what?
 
Originally Posted By: grampi
Originally Posted By: Garak
There is a lot more competition within the fuel industry than you give them credit for, even in a place like here where fuel prices seem to change in lockstep. And yes, vehicle prices are rather strictly controlled by the market. An $80,000 Caprice wouldn't have competed well against an identically equipped $20,000 Crown Vic, now would it?


The oil industry's competition is what?


The other producers, refiners, distributors and retailers, of course, as well as alternate sources of fuel.
Don't think this happens?
Observe the Saudi's reaction to the American production ramp-up.
However long the Saudis continue to depress prices with higher production, the genie is out of the bottle and fracking exploration will resume as soon as prices rise to a sufficient level.
There's also subsitution, as with the massive GTL plant RDS operates in Qatar or the Canadian tar sands projects.
The appearance of CNG vehicles and filling stations is another example.
There's a CNG station right up the road from us and there are a number of commercial vehicles in this area running this cheap, abudant and clean fuel.
Don't think there's much price elasticity of demand with oil?
How do you suppose that all of the marginal capacity brought to market over the past few years is being absorbed?
Markets always clear and at current production levels, they're clearing at lower prices.
 
There is actually a small scale GTL plant being built right up the road from where I work. They purchased the property last year and are awaiting the final permits to begin construction. They've already began moving in process equipment in preperation.
 
The whole idea of "trust fund", be it highway or social security is a ruse. There isn't, and never has been, a "trust fund". It is all put into the general fund and from there legislation stipulates the hand outs. Many investigative audits, especially by the commercial transportation sector, have shown that not anywhere near the amount of money collected by fuel taxes ever really makes it back out to actual road construction and repair. Many years, those funding audits have shown that we are lucky if over 60% of the collected fuel tax revenue is actually used for maintaining and constructing roads. It would surprise most folks what a lot of that money is actually spent on. What comes out of the fund for roads may get there, it is what it is being spent on, like neat little beautification projects to improve the esthetics of various highway easements. Fancy decorative designs on over passes in metro areas. Bicycle paths, walking paths, and other feel good projects. And a large chunk of that collected fuel tax money is shuffled off to bankroll mass transit systems that are generally endless black holes the money gets thrown at never to be seen again.

Anyone that goes near I=80 in Council Bluffs Iowa can see a real waste of your fuel tax dollars. Several hundred thousand dollars spent for some "artistic" design over the Exit 1 interchange overpass that looks more like a flashback to bombed out Stalingrad during the German siege in WW II. Some politician's friend got that goofy project. I am not a real connoisseur of art, but I do know what passes for art, and that doesn't even come close.
 
It really doesn't matter what you call it. The fact is that the fuel tax is not generating enough revenue to pay for maintenance and new construction.That means that either the project does not get funded or it is paid for through more borrowing. I would prefer that it be paid for through a use tax like the fuel tax than by adding to the debt.
 
Originally Posted By: Bamaro
It really doesn't matter what you call it. The fact is that the fuel tax is not generating enough revenue to pay for maintenance and new construction.That means that either the project does not get funded or it is paid for through more borrowing. I would prefer that it be paid for through a use tax like the fuel tax than by adding to the debt.

Unfortunately in Pa..there is so much "Featherbedding" that twice the road crew needed works half as hard to complete a project in twice the time. These jobs need to be bid out and Penndot needs to all but go away
 
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I contend there is enough already collected from fuel taxes to take care of repairs and new construction. But the problems has been compounded in that they have wasted so much over the years instead of actually doing the repairs and construction needed, that they may not have enough now to play catch up, but they have had enough all along to stay on top of it. They just decided to use the money for their little pet projects that had nothing to do with actual road repair or construction. Why should I then be in full agreement that they need more money to make up for their lack of stewardship of the money I have already paid them?

I am older now and the children are all grown and gone, but this analogy works fine. If I give my child money to take care of paying for his school lunches and he then only uses 60% of that for lunches and blows the rest on other things, then he comes to me and then needs more because he does not have enough to cover the lunches for the rest of the time period, that is not my fault. Sorry, son, you are going to have to go without a lunch or two until the next time I give you money for school lunch. i am not going to agree to cover your incompetence. If I do this time, then the next time I give you lunch money, you will repeat this. No can do. You are on your own till the next time I give you money for school lunch.

When the American people realize that government was set up via the Constitution and not that the government is the one who wrote the Constitution, then they might come to realize that government is their employee and start acting like they are the employer. I doubt it. But I can dream can't I?
 
Agreed with Tired Trucker, they have collected enough to
provide all needed maintenance and new construction of the roads....the problem is that they have used much of those fees and taxes for things other than its intended use.

The question is why are the officials allowed to use that money for ANYTHING other than road maintenance and improvements?
Seems to be malfeasance to me.
 
To anyone who thinks that a tax amount set in 1993 is still adequate, are you willing to go back to making what you did in 1993 but still buy things in 2015 dollars?

That is essentially exactly what we are doing with the current gas tax rate. Just to keep up with inflation, the tax rate should have gone up around 60+% since 1993.

On top of that construction costs have increased faster than inflation. The ENR CCI from 1993 to 2015 shows construction costs nationally have increased about 97% since 1993 (or 37% faster than inflation).

Recognize that much of what goes into your roads is subject to commodity pricing. Blacktop roads are heavily dependent on oil pricing. Concrete roads are subject to steel and cement pricing. Cement pricing went through the roof here last fall due to a shortage - to the point ready mix was being rationed out to meet demand.

What that tax built in 1993 you will barely get 1/2 that built today.
 
Originally Posted By: MNgopher
To anyone who thinks that a tax amount set in 1993 is still adequate, are you willing to go back to making what you did in 1993 but still buy things in 2015 dollars?

What that tax built in 1993 you will barely get 1/2 that built today.

The states' costs have gone up bc of mis-management, featherbedding, pensions, inability to get rid of underperformers, mega increases in worker payments, coruption, etc.

Have you ever watched state workers work..probably not, bc they do very little of it. States need to go with private contractors AS A START. and btw percentage is based on current $$$ not 1993n doollars.

Also..notice how expensive state universities have become?? States like the Fed are bastions of dysfunction.
 
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Originally Posted By: TiredTrucker

When the American people realize that government was set up via the Constitution and not that the government is the one who wrote the Constitution, then they might come to realize that government is their employee and start acting like they are the employer. I doubt it. But I can dream can't I?

That's not gonna hapen. People that elect our politicians probably can't even speak English, nor know anything of our heritage. Those days are long gone.
 
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Let me ask a question Al, who actually builds and does major road rehabilitation projects? I'll give you a hint: It isn't the state virtually anywhere. Its done on low bid contracts done by private contractors. Contracts are managed by the State, but work is done privately. Heck, in our state, most of the plans are done privately now too.

Perhaps PA is different, but that is how its done in MN. Private contractors deliver the construction projects on low bid.

Let's talk percentages.

The CPI in Mar 1993 was 143.6. The CPI in Mar 2015 is 236.119. Inflation over that period is 64.4%.

The Engineering News Record Construction Cost Index is commonly used to track construction costs and is the benchmark for many Civil Engineering economics calculations.. The CCI in 1993 was 5071. The latest CCI is 9975. The CCI has increased 96.7% in that period.

In other words, construction costs have increased faster than the general rate of inflation. 96.7 versus 64.4.

The CCI is not based only on public road projects. To the contrary, it is based on a combination of a cost of materials and labor, not just for public work.

Just simply due to the cost of diesel, many of my simple earthwork projects have nearly doubled in price from where they were 10 years ago.

The math is simple. We charge a flat rate per gallon that hasn't changed since 1993. The buying power of that money is about 1/2 what it was in 1993.

You can argue that we drove more miles and used more fuel, and thus paid more tax, all of which is true. However, that additional mileage means more wear and tear on the existing roads, and more traffic that requires expansions.
 
Get the long haul semis off the highways by shipping more product by rail and our roads will last much, much longer...which would also mean a huge reduction in the cost of maintaining our roads...
 
I give you this example. Indiana.

They leased the Indiana tollway to private investors for a 3.8 billion dollar lump sum up front. Yet, Indiana has some of the worse maintained roads in the midwest. They squandered that money on pension fund support, studying why monkeys have excrement fights at the zoo, and other junk and didn't funnel it toward major road improvements. And still, they have some of the highest fuel tax rates. From a commercial standpoint, they are not reflected at the pump. Commercial truck operators have to file, quarterly, via the International Fuel Tax Agreement (IFTA) for the fuel they use in each state they operate in. When they file with Indiana, they are hit for an additional 11 cents a gallon over the fuel tax already paid at the pump, making their total state fuel tax per gallon at 27 cents a gallon on top of the feds 24.3 cents a gallon on diesel. Then there is sales tax on that.

And of all the fuel taxes collected in the U.S. on various fuels, the mass transit sector gets almost 20% of it off the top. You know, things like Amtrac running 100 mph on a 50 mph rated track curve and derailing killing 8 and injuring over 200. Something that has nothing to do with maintaining or building roads. By the time it is all said and done, and all the money gets fondled around the system, we are lucky if 60% of what we paid in fuel taxes ever get ear marked for actual funding of roads.

No, they get enough already and fail to convince me that they need more. They need to manage what they get better.
 
Do you think there's a little bit of price gouging going on right now? Crude is currently $58 a barrel, and yet gas is at $3 a gallon here in Chicagoland...sounds like gouging to me...
 
Gas prices aren't linear with oil prices; you know that, Grampi. When we had $14 a barrel oil, we didn't have gasoline at 1/4 of the price we do now, either. And when it was essentially double what it is now, we (at least you) weren't paying $6 a gallon.
 
Originally Posted By: TiredTrucker

And of all the fuel taxes collected in the U.S. on various fuels, the mass transit sector gets almost 20% of it off the top. You know, things like Amtrac running 100 mph on a 50 mph rated track curve and derailing killing 8 and injuring over 200. Something that has nothing to do with maintaining or building roads. By the time it is all said and done, and all the money gets fondled around the system, we are lucky if 60% of what we paid in fuel taxes ever get ear marked for actual funding of roads.


Axle damage to highways goes up to the fourth power of the weight, so double the weight on an axle and the roads are pounded 16 times as much. I've heard truckers complain that fixed registration costs are $5k a year. It would take thousands of couple-ton cars to do the same road damage and their tag fees must add up to more.

Indiana spends all its fuel tax and road fees on highways. In fact, only 28% of its highway fund comes from users, the rest is from the general fund:

http://taxfoundation.org/article/gasoline-taxes-and-tolls-pay-only-third-state-local-road-spending

Don't get me wrong, I support infrastructure in many forms, it helps trade, helps the economy. We need internet, reliable power, a functional post office, ports, rail, highway, military, pipelines, sewer plants, etc. But all taxpayers subsidize highways, for cars, and trucks.

And if public transit and bike paths get subsidized as well, that's more open travel lanes on the highway for me.
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Originally Posted By: lovcom
We drive a Prius C, that gets 62+ city, and 47+ hwy.

We don't care...let it go to $8, and we will laugh!!


Yeah, until what Oregon is testing for the "green" cars by charging them a per mile fee. This is done because the "green" cars are not paying their "fair share" for "road usage" because of lost tax revenue on less fuel sales. It'll only be a short time before this catches on in many states that need more revenue, I can name 50
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Whimsey
 
Originally Posted By: Whimsey
Originally Posted By: lovcom
We drive a Prius C, that gets 62+ city, and 47+ hwy.

We don't care...let it go to $8, and we will laugh!!


Yeah, until what Oregon is testing for the "green" cars by charging them a per mile fee. This is done because the "green" cars are not paying their "fair share" for "road usage" because of lost tax revenue on less fuel sales. It'll only be a short time before this catches on in many states that need more revenue, I can name 50
grin.gif
.

Whimsey



It is highly likely that no one will be laughing.

Another supremely ignorant post from the troll himself, Lovcom. Obviously his family uses nothing shipped by truck, eh? How about your AC man, your plumber, your electrician? Yet they are smarter than the average bear!

No one will be laughing. Fuel is the key to our economy, and even if you force everyone to go electric/hybrid/micro car or whatever, fuel that costs more drives everything upward...
 
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