Now that I've grabbed your attention with that title, think about it.

In Australia at the moment, we pay approximately $1.40 a litre

How much would you pay to buy a 600 ml bottle of water. In Australia it might be $2.40. That works out as $4 a litre - almost three times as much as the same amount of petrol.

Surely, water would be cheaper. It is more abundant by an incredible factor, found in all countries instead of a few, can often be found pure, without the need for processing of any kind.

Fuel, on the other hand, is very scarce, basically found only in the Middle East, Russia and America, is usually found deep underground, where extraction is costly, and, I would assume, needs processing before it is sold.

Why is petrol so cheap, does anyone know?

When you buy bottled water you're paying for packaging and image. Compare gasoline to tap water.

I wonder if the sheer volume of oil that is extracted and processed that makes it less expensive, when you think of just how many barrels of oil are produced and consumed each day. The economy of scale must be greater than for bottled water.

cheap?
i can remember gasoline being sold here in america for 25 cents a gallon

Yes, it is too cheap. We are using up the resources too fast because they are too cheap. No alternatives are being researched (properly) because petrol is too cheap.

Triple the price. Quadruple it. It's all fine.

im sick of hearing my american friends bitch about fuel prices..it is nearly 7 dollars a gallon here in belgium (equivalent, of course). they are ALMOST paying 3 dollars per gallon in my hometown.


waaaaaaah!!!!

American hater. Americans have the right to freemarket subsidized consumerism.

American hater. Americans have the right to freemarket subsidized consumerism.
all hail the mighty walmart!!!!

fuck it..DAMN THE MAN!!

Stick it to the man!

The man is not in at the moment, if you would like to leave a message please leave one right after the ****ing BEEP.

Surely, water would be cheaper. It is more abundant by an incredible factor, found in all countries instead of a few, can often be found pure, without the need for processing of any kind.So why isn't your title "Bottled water is much too expensive"?

-Dale

freemarket subsidized Hehe. That is a really funny oxymoron.

-Dale

When you buy bottled water you're paying for packaging and image. Compare gasoline to tap water.

I wonder if the sheer volume of oil that is extracted and processed that makes it less expensive, when you think of just how many barrels of oil are produced and consumed each day. The economy of scale must be greater than for bottled water.

I'm sure they're both true to some extent, but I can't believe that they would have that much of an effect. I use more water then fuel, I don't know about other people. Even if some of that is tap water, that should still increase supply, lower demand and thus lower cost.

i can remember gasoline being sold here in america for 25 cents a gallon
I said cheap compared to the logical price, not compared to its historical price

I'm sure they're both true to some extent, but I can't believe that they would have that much of an effect. I use more water then fuel, I don't know about other people. Even if some of that is tap water, that should still increase supply, lower demand and thus lower cost.

Not if fresh water is a limited resource.

im sick of hearing my american friends bitch about fuel prices..it is nearly 7 dollars a gallon here in belgium
That's because Belgium has insane gasoline taxes. You pay $3.60/gallon in taxes on gasoline there. If you got rid of the taxes, the price would be about the same as in the U.S.

http://www.fhwa.dot.gov/ohim/mmfr/dec05/mftrates.htm

I'm sure they're both true to some extent, but I can't believe that they would have that much of an effect. I use more water then fuel, I don't know about other people. Even if some of that is tap water, that should still increase supply, lower demand and thus lower cost.
But do you use more bottled water than fuel?
I said cheap compared to the logical price, not compared to its historical price
Like someone else said, the problem isn't that gas it too cheap - it's that bottled water is stupidly expensive. Tap water is so cheap that it's practically free.

That's because Belgium has insane gasoline taxes. You pay $3.60/gallon in taxes on gasoline there. If you got rid of the taxes, the price would be about the same as in the U.S.

regardless of what the cost is, americans complain too much about prices. the money is still taken out of your wallet, wherever you are.

and here in belgium they use the extra tax to actually pay for schools, roads, community projects, free health care, and taking care of the poor.

this is a foreign concept for the american mind, as our taxes are used to kill people in other countries.

i repeat: americans complain too much about the price of gasoline. and before you say anything, yes, i am american.

I said cheap compared to the logical priceI can accept that, but what the hell does the "logical price" of gasoline have to do with the current market price of bottled water. It seems to me that the two are completely irrelevant. In the case of bottled water you have obscene profit margins and in the case of gasoline (in most parts of the world) you have obscene taxes, so neither really seem to be at what I would call a "logical price".


i repeat: americans complain too much about the price of gasoline.I agree completely. The funny thing is that we complain and whine about how it is going to cut into our life style and someone should do something about it, and yet we buy the exact same amount. The price elasticity for gas is almost negligible.

-Dale

Yes, it is too cheap. We are using up the resources too fast because they are too cheap. No alternatives are being researched (properly) because petrol is too cheap.

Triple the price. Quadruple it. It's all fine.

Quoted for truth.

We will end up pricing ourselves out of the market before the oil is all used up. Who would pay $200 a gallon?

Fuel is too cheap? Sure, maybe in countries that you can walk from one end of the country to the other in a few days. ;)

Here in the U.S. which is about the size of all of Europe, lemme hear ya say that again when you have to take certain goods from one end of the country to the other. Or how about where you gotta drive 50 miles or more roundtrip to and from work each day? We don't have the excellent mass transportation system you guys have.

Fuel has a bigger impact on the world than a gallon of milk, some purified water, orange juice or other expensive item if you compare per-gallon costs. Heck, with higher-priced fuel, that milk, orange juice, water, or any other item wouldn't even be able to reach you. You'd wind up paying even more for those products due to the increase in fuel price.

- N

and here in belgium they use the extra tax to actually pay for schools, roads, community projects, free health care, and taking care of the poor.

this is a foreign concept for the american mind, as our taxes are used to kill people in other countries.

I get the point you are making, but you are badly exaggerating.

The US spends much more on schools, roads, community projects, healthcare, and the poor than it does on the military. We spend more on both the Department of Health and Human Services and Social Secutiry than we do on the military, even with the recent wars.

I get the point you are making, but you are badly exaggerating.

The US spends much more on schools, roads, community projects, healthcare, and the poor than it does on the military. We spend more on both the Department of Health and Human Services and Social Secutiry than we do on the military, even with the recent wars.

Heck, we spend more on Interest Payments on our outstanding loans than we do for the Dept. of Defense.

Fuel is too cheap? Sure, maybe in countries that you can walk from one end of the country to the other in a few days. ;)

Here in the U.S. which is about the size of all of Europe, lemme hear ya say that again when you have to take certain goods from one end of the country to the other. Or how about where you gotta drive 50 miles or more roundtrip to and from work each day? We don't have the excellent mass transportation system you guys have.


here in europe, trucking companies generally own their own fuel pumps, thereby passing the majority of "at the pump" taxes. i didnt know this until today.

there is a petrol station across the street from my apartment, and i have gotten to be pretty decent friends with the guy that runs the place over the last year or so. he told me about the truck stations.

the mass transportation system is simply an issue of subsidizing the new profits the government would have from the raised tax on gasoline. i travel about 50 miles a day on the train to go to work. it is faster, more environmentally friendly, and easier than trying to find a parking spot for a car. it would be a simple matter to dole the profits out to cities of 100,000 people or more, on a yearly basis to create a new mass transportation system.

but the fact of the matter is: big oil has a stranglehold on our government, and want taxes at the pump to be low, to stimulate consumption. the more consumption, the more money these companies stand to make. it is a sick cycle, and one reason i believe that special interest groups should be made illegal. the paying of a congressman or senator's campaign should be illegal. political parties should be registered with the federal government, and given a yearly stipend to use for campaigning. this makes the government more representative of the people, as more parties would inevitably gain prominence.


sorry for the ramble....
summation: gas tax is good, as it pays for a society to be weened slowly from fossil fuels. :)

....how about where you gotta drive 50 miles or more roundtrip to and from work each day? We don't have the excellent mass transportation system you guys have.... - NExactly the point I have been making in threads that speak of "suburban infrastructure" US created with foolish tax laws and relatively cheap gas. It will take at least 20 years to change this "suburban infrastructure" to one suitable for the era of expensive oil. Unfortunately, the US will collapse long before it can make the change.

and one reason i believe that special interest groups should be made illegal. the paying of a congressman or senator's campaign should be illegal. We have had this discussion before. I still object to the term "special interest groups", but I do appreciate that you here have specifically identified the activity that you deem primarily responsible for corruption. I would simply make the activity illegal and not the groups.

-Dale

Now that I've grabbed your attention with that title, think about it.

In Australia at the moment, we pay approximately $1.40 a litre

How much would you pay to buy a 600 ml bottle of water. In Australia it might be $2.40. That works out as $4 a litre - almost three times as much as the same amount of petrol.

Surely, water would be cheaper. It is more abundant by an incredible factor, found in all countries instead of a few, can often be found pure, without the need for processing of any kind.

Fuel, on the other hand, is very scarce, basically found only in the Middle East, Russia and America, is usually found deep underground, where extraction is costly, and, I would assume, needs processing before it is sold.

Why is petrol so cheap, does anyone know?

petrol is cheap so that the petrol companys can continue extractin the petrol and turning a 2000% profit on it. sure they could get more but then people would start thinking, about what you say, well lets hope you start thinking about it. of course we could try other ways but we' would have to spread profit out which would in turn hurt the american worshipped freemarket subsidized consumerism. "oh kiss me george bush, kiss me alan greenspan, mm show me your junk oprah winfrey

So why isn't your title "Bottled water is much too expensive"?

Because petrol is one of the cheapest liquids available, despite the fact that it is much more scare then most - Orange or apple juice, cola, lemonade, cordial, basically anything. Bottled water was a single example.

Same goes to the rest of you

bottled water is about 25 cents a liter in belgium. :)

All of which leads to the ultimate question:

Is it ethically acceptable to profit from the dead? That is extract oil from the gravesites, refine it to take away it's essence, and then burn it in combustion engines?

(just came to my mind after reading so many silly threads on the moral problems of eating meat, or killing fetuses)

petrol is cheap so that the petrol companys can continue extractin the petrol and turning a 2000% profit on it. The gas company's profit margin is around 10%. Even in the US, with our relatively low taxes, the government's cut is bigger than the oil company's cut.

-Dale

Because petrol is one of the cheapest liquids available, despite the fact that it is much more scare then most - Orange or apple juice, cola, lemonade, cordial, basically anything. Bottled water was a single example.How do you objectively measure scarcity? The only good measure of scarcity that I know is free-market price. By that measure it is not a scarce liquid at all. If you instead want to measure scarcity by volume produced anually, then I suspect petroleum is still less scarce than all of the beverages you listed.

-Dale

The gas company's profit margin is around 10%. Even in the US, with our relatively low taxes, the government's cut is bigger than the oil company's cut.

-Dale

Thank you for pointing that out. Most people are clueless when it comes to economics. They don't get that any of these oil companies could make more money by lowering prices and undercutting the competition, but can't because their margins are already too thin.

The record amounts of money these companies are making is because demand is going up around the world. It isn't because they are selling the same amount of fuel for more money, it is because they are selling TONS more fuel for more money. Which means their own costs are going up. Big time.

When fuel hits $80 a barrel, that is what the oil companies have to pay before they ship, refine, and distribute the fuel. Just because they "made" $400 billion dollars doesn't mean that they made that in profit. Their expenses for last year also broke all records.

Of course, last year was a boom year for profits simply because of the boom economies of India and China, and the recovery of the East Asian Tigers. But the people that think the oil companies are keeping prices jacked up for extra profit are insane. If you have to blame anyone in the oil loop, it would be OPEC, but they should be commended for keeping the flow as slow as they can. They are the number-one energy conservation group in the world. (even if their motives are not environmental, the effects are the same)

Boohoo...poor oil companies.


How they managed to make record profits again is a mystery to me.

Boohoo...poor oil companies.


How they managed to make record profits again is a mystery to me.

Because they sell one of the most in-demand products in the world? And a ton of that demand showed up in just the last several years?


Either that, or it is a vast conspiracy, with hundreds of thousands of people involved, who conspire to keep prices higher than market-value. All this, despite the fact that such a scenario (of a monopoly keeping prices jacked up) has never occured in human history and is economically unfeasable. As soon as a monopoly raises prices well above cost, it creates market forces that bring new producers into the market, who can afford to start producing a high-demand, high-profit product. Which increases competition and supply, which results in lower prices.

Most people have the fantasy that Standard Oil was a monopoly that kept prices high, when in reality, like all industries that see consolidation, the prices consistently fell, and fast, under Standard Oil. Monopolies never hurt consumers, they only hurt other producers that want to get into the market unfairly, and want to charge higher prices. That's why most anti-trust suits are brought up by inneficient competitors, NOT by consumers. See Standard Oil, Microsoft, and Kellogg for recent examples. And note that you can not find a single example of a monopoly fleecing the public the way people assume they all do. (and Enron was an example of fraud, not monopoly or price-control)

"{US} Fuel is much to cheap."

Well Chavez is doing his part to correct that, today. (all this week in fact he is in China, negotiating.)

60% of the oil Venezuela ships out of country goes to US. Two years ago, China got a paltry 12 million BPD, now it is about 150 million BPD and will be 200 by year's end. However, this is just the start of the exports to China.

One main point of the current negotiations is for China to provide Chavez with more tankers. Another part is for China and Venezuela to develop the oil off shore in Cuba's waters, and probably Venezuela's oil sands (probably the world's largest).

In a few years, the 11% of US oil imports that currently come from Venezuela will all be going to China. - That should help the US with the "oil too cheap problem."

Be sure to thank Hugo. :rolleyes:

"{US} Fuel is much to cheap."

Well Chavez is doing his part to correct that, today. (all this week in fact he is in China, negotiating.)

60% of the oil Venezuela ships out of country goes to US. Two years ago, China got a paltry 12 million BPD, now it is about 150 million BPD and will be 200 by year's end. However, this is just the start of the exports to China.

One main point of the current negotiations is for China to provide Chavez with more tankers. Another part is for China and Venezuela to develop the oil off shore in Cuba's waters, and probably Venezuela's oil sands (probably the world's largest).

In a few years, the 11% of US oil imports that currently come from Venezuela will all be going to China. - That should help the US with the "oil too cheap problem."

Be sure to thank Hugo. :rolleyes:

The American economy wins as other countries become developed. Sure, gas prices will go up, but so will profits and wages as a very large portion of the human species joins us in economic wealth.

We have to stop thinking that it is an "us or them" game with the global economy. The more we trade, the better off everyone is.

So this is good news, not bad news.

How they managed to make record profits again is a mystery to me.Then apparently you don't understand the difference between a profit and a profit margin. You make big profits (reported in dollars) when you do a lot of business. You make big profit margins (reported in percentages) when you artificially inflate your price.

-Dale

The American economy wins as other countries become developed. ... We have to stop thinking that it is an "us or them" game with the global economy. The more we trade, the better off everyone is....I agree with that, but not in all cases, because of the historic fact that the US infrastructure erroneously assumed cheap gas for ever. If it could instantly convert to good public transport, small cars, in town living etc then no reservations, but the quality of the jobs available would still drop drastically as other with lower material standards force them to do so.

Perhaps a life-boat analogy may help: 20 days before you will be missed and looked for. Water for 60 man-days with five men on the life boat. The US consumption of oil will drop and it is going to be painful.

I agree with that, but not in all cases, because of the historic fact that the US infrastructure erroneously assumed cheap gas for ever. If it could instantly convert to good public transport, small cars, in town living etc then no reservations, but the quality of the jobs available would still drop drastically as other with lower material standards force them to do so.

Perhaps a life-boat analogy may help: 20 days before you will be missed and looked for. Water for 60 man-days with five men on the life boat. The US consumption of oil will drop and it is going to be painful.

These are good and valid points.

However, the almost immediate demand for many new resources has never given us pause. I don't see how this situation is any different.

If oil reserves start drying up, they are not going to do it all at once. One country will announce that more wells have been tapped than drilled for the first time. Another country will announce that no oil is now being exported. It will be a gradual cycle over many years. Just the statistical probability of them all going dry within the same 100 years is hard to fathom.

So, the fact that this is going to be a slow process, and the fact that we right now posess the capability to get almost all the way off of oil, gives me hope. We could build a few hundred new nuclear reactors. We could build massive solar and wind arrays. We can harnass geothermic vents and the force of the tides. We could do all of this within a few years if we had to. All clean power (except for spent rods), which will be used to charge batteries, which will do all the work.

Worst case scenario, all planes are grounded eventually, which means that shipping takes back over, with small reactors in each vessel.


I just can't buy the doomsday scenarios. They lack imagination, and a grasp of reality. It reminds me of the people who bemoan the sealevel rising a few feet. They love talking about which major cities will be "underwater". Their supposition here is that the process will be fast (which it won't be) and that the occupants of these cities will stand around for a dozen years and watch the water slowly encroach.

Do what? Other countries reclaim land with dykes all the time, and we are going to twiddle our thumbs while Miami is slowly (over 20 years?!) overtaken with a rising sea? It is assumed conclusions like this that make me dismiss almost all doomsday scenarios after a moment of thought.

And before cars, our country was set up for horses. And we covered the United States with rail in only a single generation, and that was when we had to move the rail and materials around with half-finished rail, wooden sailboats, and horses. Each upgrade gets easier and easier. Just remember, the supply will run out gradually, and that should alleviate your fears.

...If oil reserves start drying up, they are not going to do it all at once....The wells will never "dry up," that is not the problem. The problem is that liquid fuel will become too expensive to sustain a society like the US has built - "suburban infrastructure" with the average food item traveling more than 500 miles in a truck etc.

The wells will never "dry up," that is not the problem. The problem is that liquid fuel will become too expensive to sustain a society like the US has built - "suburban infrastructure" with the average food item traveling more than 500 miles in a truck etc.

Of course they will dry up eventually. That's why you don't see oil flowing out of Pennsylvania anymore.

And increased productivity generates new wealth over time, it is impossible to say that the society we have created will not be sustainable at some future rate. That pretends that the rise in productivity will somehow stop, or that the market won't react to changes over time.

If it does start getting too expensive, the market will make us change our habits, that happens all the time.

"{US} Fuel is much to cheap."

Well Chavez is doing his part to correct that, today. (all this week in fact he is in China, negotiating.)

60% of the oil Venezuela ships out of country goes to US. Two years ago, China got a paltry 12 million BPD, now it is about 150 million BPD and will be 200 by year's end. However, this is just the start of the exports to China.

One main point of the current negotiations is for China to provide Chavez with more tankers. Another part is for China and Venezuela to develop the oil off shore in Cuba's waters, and probably Venezuela's oil sands (probably the world's largest).

In a few years, the 11% of US oil imports that currently come from Venezuela will all be going to China. - That should help the US with the "oil too cheap problem."

Be sure to thank Hugo. :rolleyes:

http://news.bbc.co.uk/2/hi/business/5286766.stm

China has secured a major energy deal during a state visit to the country by Venezuelan President Hugo Chavez.

Of course they will dry up eventually. That's why you don't see oil flowing out of Pennsylvania anymore....Perhaps we mean different things by "dry up." I assure you that there is more oil in the subsoil of Pennsylvania today than has been removed to date; however, the cost in solvents etc. to wash out that same quantity of oil again from the rocks it is in might make that oil cost $1000/barrel, (not to mention the pumping cost in energy may exceed the energy in the oil recovered).

Yes, if there is a couple of decades, then all the gasoline cars and trucks now in use possibly could be converted to alcohol and an adequate set of apartments built in cities to close down suburban homes. The lots on which the surban homes now sit could be cleared and planted with crops to reduce the average food item transport distance from above 500 miles down to only 50, etc. but the US does not have two decades, nor the politcal possibility of doing this.

The problem is (1)the cost of getting the oil out of the ground, not the quantity that is still there and (2)the time required for converting the present "suburban infrastructure" to one that can function when oil is more than $200/ barrel, compared to the period until oil is $200/barrel. IMO, to make the drastric change in infrastruction required will take at least twice as long as the time available in which to make the change so as to avoid the collapse of the economy.


Lets agree not to talk about how much oil is in the ground as no one knows and it is not the important point. The important point, I think you should address, is how rapidly can the price of oil rise compared to the rate at which the infrastructure can be changed to be compatible. (Or as I originally said "sustain that infrastructure" that then exists. The current US infrastructure is not sustainable if oil is $200/barrel.) I think the US "suburban infrastructure" is so badly designed for high cost liquid fuel that the conversion needed to have begun at least a decade ago. Since it did not, and has not really significantly started yet, the battle is already lost.

Perhaps we mean different things by "dry up." I assure you that there is more oil in the subsoil of Pennsylvania today than has been removed to date; however, the cost in solvents etc. to wash out that same quantity of oil again from the rocks it is in might make that oil cost $1000/barrel, (not to mention the pumping cost in energy may exceed the energy in the oil recovered).

Yes, if there is a couple of decades, then all the gasoline cars and trucks now in use possibly could be converted to alcohol and an adequate set of apartments built in cities to close down suburban homes, etc. but the US does not have two decades.

The problem is (1)the cost of getting the oil out of the ground, not the quantity that is still there and (2)the time required for converting the present "suburban infrastructure" to one that can function when oil is more than $200/ barrel, compared to the period until oil is $200/barrel. IMO, to make the drastric change in infrastruction required will take at least twice as long as the least time in which the change can be made.


Lets agree not to talk about how much oil is in the ground as no one knows and it is not the important point. The important point, I think you should address, is how rapidly can the price of oil rise compared to the rate at which the infrastructure can be changed to be compatible. (Or as I originally said "sustain that infrastructure" that then exists. The current US infrastructure is not sustainable if oil is $200/barrel.) I think the US "suburban infrastructure" is so badly designed for high cost liquid fuel that the conversion needed to have begun at least a decade ago. Since it did not, and has not really significantly started yet, the battle is already lost.

The experts said the same thing about oil at $40 a barrel. And then about oil at $60 a barrel. And then $70. And most recently $100.

They were all wrong, what would make the next guess correct?

And how long it would take to change our infrastructure is a wild-ass-guess. Nobody knows. It sure didn't take long for an Internet infrastructure to be made. Or our airport system. Or our train system.

If you are saying that the same species that covered the entire globe with horses and wooden ships can't figure out what to do as oil gets more expensive, well... we will just have to agree to disagree. Man, just look at how quickly we went from an agriculture-centric economy to an urban-based one. Like 20 years. There was a mass exodus from the farmlands to the cities that popped up around factories. And in the late 40's, we just as quickly created an entire nation of suburbs, as affordable housing and the automobile swept the nation in three short years.

I think you are using a ton of conjecture here, and it isn't even backed up with a cursory glance at recent history.

The experts said the same thing about oil at $40 a barrel. And then about oil at $60 a barrel. And then $70. And most recently $100.

They were all wrong, what would make the next guess correct? What "expert" said that? Can you cite one reference? (especially about the infrastructure not being sustainable on the 40, or 60 dollar / barrel oil.)

As far as the rest of your post is concerned, yes very rapid changes were made in recent history. If you know some physics*, you might think of this in terms of entropy. A fantastic amount of order was created in a very short time. The laws of physics tell you that when this happens, a fantastic amount of energy was required. We had that energy and it was cheap, - oil. We do not have any cheap energy now so an equivalent transformation to a new order is impossible. Thus your history is not any guide or evidence that it can be done again without a corresponding input of energy.
-----------------------------------
*In case you do not know any physics, I will give one example: A lot of iron and oxygen were very mixed together in Fe2O3 and a great deal of energy was required to get the iron rails of the railroad you mentioned as separating the iron from the oxygen is a reduction in the entropy (requires energy). - This is just one example of a very general principle that basicly has the US screwed now. (or stuck with it current poorly suited "surban infrastructure" in slightly more polite terms.)