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  1. #1

    To all unhappy economy gas consumers due to price

    GAS WAR - an idea that WILL work


    This was originally sent by a retired Coca Cola executive. It came from
    one of his engineer buddies who retired from Halliburton. It ' s worth
    your consideration.


    Join the resistance!!!! I hear we are going to hit close to $4.00 a
    gallon by next summer and it might go higher!! Want gasoline prices to
    come down? We need to take some intelligent, united action. Phillip
    Hollsworth offered this good idea.


    This makes MUCH MORE SENSE than the "don't buy gas on a certain day"
    campaign that was going around last April or May! The oil companies just
    laughed at that because they knew we wouldn't continue to "hurt"
    ourselves by refusing to buy gas. It was more of an inconvenience to us
    than it was a problem for them.


    BUT, whoever thought of this idea, has come up with a plan that can
    really work. Please read on and join with us! By now you're probably
    thinking gasoline priced at about $1.50 is super cheap. Me too! It is
    currently $2.79 for regular unleaded in my town. Now that the oil
    companies and the OPEC nations have conditioned us to think that the
    cost of a gallon of gas is CHEAP at $1.50 - $1.75, we need to take
    aggressive action to teach them that BUYERS control themarketplace....
    not sellers.
    With the price of gasoline going up more each day, we consumers need to
    take action. The only way we are going to see the price of gas come down
    is if we hit someone in the pocketbook by not purchasing their gas! And,
    we can do that WITHOUT hurting ourselves. How? Since we all rely on our
    cars, we can't just stop buying gas. But we CAN have an impact on gas
    prices if we all act together to force a price war.



    Here's the idea:


    For the rest of this year, DON'T purchase ANY gasoline from the two
    biggest companies (which now are one), EXXON and MOBIL. If they are not
    selling any gas, they will be inclined to reduce their prices. If they
    reduce their prices, the other companies will have to follow suit.


    But to have an impact, we need to reach literally millions of Exxon and
    Mobil gas buyers. It's really simple to do! Now, don't wimp out at this
    point.... keep reading and I'll explain how simple it is to reach
    millions of people.


    I am sending this note to 30 people. If each of us sends it to at least
    ten more (30 x 10 =3D 300) ... and those 300 send it to at least ten
    more (300 x 10 =3D 3,000)...and so on, by the time the message reaches
    the sixth group of people, we will have reached over THREE MILLION
    consumers. If those three million get excited and pass this on to ten
    friends each, then 30 million people will have been contacted! If it
    goes one level further, you guessed it..... THREE


    >>>>HUNDRED MILLION >>>>PEOPLE!!!


    Again, all you have to do is send this to 10 people. That's all. (If you
    don't understand how we can reach 300 million and all you have to do is
    send this to 10 people.... Well, let's face it, you just aren't a
    mathematician. But I am, so trust me on this one.)



    How long would all that take? If each of us sends this e-mail out to ten
    more people within one day of receipt, all 300 MILLION people could
    conceivably be contacted within the next 8 days!!!


    I'll bet you didn't think you and I had that much potential, did you?


    Acting together we can make a difference. If this makes sense to you,
    please pass this message on. I suggest that we not buy from EXXON/MOBIL
    UNTIL THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP THEM DOWN.


    THIS CAN REALLY WORK.

    This message contains information which may be confidential and privileged. Unless you are the addressee
    (or authorized to receive for the addressee), you may not use, copy or disclose to anyone the message or any
    information contained in the message. If you have received the message in error, please advise the sender by
    reply e-mail, and delete the message.

    Thank You
    Rodney Hill

  2. #2
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    They tried this last year and I'm not sure it did anything. We don't have too many Exxon or Mobil stations in Tucson so I didn't have a hard time complying.
    So I'll continue to not buy gas from Exxon/Mobil. If you do the math on their profits and all the other companies profits I think it adds up to approx. $1600 per U.S. driver per year. sickening
    Joe

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    In all honesty do you really think the oil companies will allow themselves to be manipulated by the general public? All this will do, at best, is force the oil companies to have a smaller spread of prices with their competitors. They will never cut themselves short of a profit, they have a captive market and compete without really competing. They just sit around the table and carve up the pie.
    Oil companies never loose, NEVER.

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    The only way to drop prices is not to buy ANY....period! Instead of firing up the boat with twin 350's for a blast down the lake this weekend, paddle a kayak or a canoe. Park the RV(5 mpg) and throw a tent onto the back of the Harley(50 mpg) and go camping. Oh and make sure you shut the lights off (and the tv, and the xbox, and the espresso machine, and the stereo, and the jacuzzi, and ....) when you leave. There are still alot of oil fired power plants in the country.

    No matter how expensive gas and oil gets bottom line is that WE'RE STILL BUYING IT!!! Demand controls the price and demand isn't slowing down. It doesn't matter where you buy it or who you buy it from, gas is produced by a handful of refineries. You can bet that all of the heavy hitters (Exxon, Mobil, Texaco, etc) in the oil world get their fair share of every gallon of gas sold regardless of who sold it. So if you don't want to pay $3.00 a gallon for gas...stay home.

    :cheers:
    I don't know much about anything but I know a little about everything....

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    Here is a link to a story on Yahoo! Finance about this topic. Good reading...

    http://biz.yahoo.com/cnnm/070504/050...pf=family-home

    :cheers:
    I don't know much about anything but I know a little about everything....

  6. #6
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    You could also hedge by buying refiners stocks..

    They make money off of you, might as well make some off of them.

  7. #7
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    There is one good thing about the high price of gas, it actually has people thinking about alternatives. The DIY'ers will and are leading the way to converting vehicles. PEHV's, hydrogen, biodiesel, hybrids, etc. It is also making the economics of alternatives more attractive.
    Phil, Still too many interests, too many projects, and not enough time!!!!!!!!
    Vist my websites - http://pminmo.com & http://millpcbs.com

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    Do you think the US oil companies and consumers aren't subsidized? Of course it's semi-hidden. You are taxed (other than fuel/road tax). The tax is moved into the "general fund". Then the oil companies get a "depletion allowance". How many other businesses get re-imbursed for the inventory they sold? They get exploration expenses removed from taxes. They don't pay the royalties owed to federal and state agencies for "drilling rights" that they bid on. If the fog were removed and everybody played by the rules, US gas at the pump wouldn't be $3.00+ at the pump, it would be closer to $8.00. Enough for today!

    add: BTW how many of you had the military come in to protect youre "vital interests" for ???? billion $$$$$.
    DZASTR

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    In my opinion, oil companies have a fiduciary obligation to their investors to make a profit. But they have no ethical or moral obligation to the country they live in. We don't buy a loaf of bread or a dozen eggs based on the stock market; they do not change 1,2,or 3 times a day!
    When asked of a politician in Michigan, Dave Camp, his response was " the government does not want to get involved in private business". But a publicly held compamy, as the oil companies are, should be held accountable. As I have expressed many times, " We are a government by business, for business". We need to get back to government by the people, for the people!
    My rant for the day!
    Steve

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    I do not object to a reasonable profit. 4.5% is not unreasonable. In Wisconsin, the combined fed. & state gasoline taxes are more than the profit the oil companies make (175% of oil co. profit) and they want to increase those taxes.

    I would like to see the real taxes paid, the "incentives" paid, the royalties not paid, the "depletion allowance" etc. all spelled out in plain view of the public.

    Oil producing countries subsidize their public gas consumption from oil income. Our government does so as well by transferring tax money around. So as usual, the consumer always pays one way or another. One of those "Think Tanks" should determine the total amount we really pay for gas with all costs included. (such as military protection of our "vital interests".)

    BTW in WI gas prices can be changed only once in 24 hrs.

    End Rant for Today.
    DZASTR

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    Quote Originally Posted by RICHARD ZASTROW View Post
    I do not object to a reasonable profit. 4.5% is not unreasonable.....
    Where did you get this number and is it 4.5% on turnover or 4.5% on invested capital? There can be an enormous difference between the two.
    An open mind is a virtue...so long as all the common sense has not leaked out.

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    Last year Exxon/Mobil had a profit of US $8.4 billion. This was the highest profit ever for an American corporation. That number, while huge, was 4.5% of sales. In my home state, Wisconsin, there is a MANDATORY markup of 6% wholesale and 3% retail. Consider the inventory turnover in the world market for Exxon/Mobil products and 4.5% adds up to a fairly large number. It's almost as bad as the US federal budget. It's even more than my Social Security check.

    add: Geof, I kid you not. As I left after this post at 10:28 AM, the talk show in my right ear explained how the state of Wisconsin charged a Merril WI gas station for discounting his gas prices .02 to senior citizens. He must charge 9.2% over wholesale price or go to court and be fined. Go figure.
    DZASTR

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    Their balance sheet for 2006 indicates $365.5b in revenue, with $39.5b in earnings. That's a little over 10.6% and pretty much in line with good company performance. 12% and above is your top tier corporate earnings.
    Phil, Still too many interests, too many projects, and not enough time!!!!!!!!
    Vist my websites - http://pminmo.com & http://millpcbs.com

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    Phil, You're probably correct. It was national news last year so it was probably 4.5% in '05. They made a lotta noise about it and a few even defended it. (doesn't need defending) I'm an old fart so I can get away with memory lapses.
    DZASTR

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    Quote Originally Posted by RICHARD ZASTROW View Post
    Last year Exxon/Mobil had a profit of US $8.4 billion. This was the highest profit ever for an American corporation. That number, while huge, was 4.5% of sales....
    I don't think any of the numbers quoted really indicate how lucrative gas sales are; as I said there can be a big difference between percent profit on sales or revenue and percent profit on invested capital.

    I will try to explain; the numbers are just for calculation so they may not be completely realistic; the percentages are valid.

    Imagine you built a corner gas station; It might cost you $1 million and you stock it with $200,000 worth of gas.

    Total investment so far; $1.2 million

    You mark the gas up 3% + 6% for a total of 9% and sell it within a week; gross margin on sales $18000.

    Your operating expenses eat up half your gross margin so your net margin (profit) is $9000.

    You fill the tanks up again with another $200,000 worth but you still have invested only $1.2 million.

    You repeat this every week for a year and at the end of the year your net margin is $9000 * 52 = $468,000.

    So you have made a profit of only 4.5% on your sales.

    However, your profit calculated as return on investment (ROI) is $468,000 which is 39% because at any point in time you only have $1.2 million invested.

    This is why profits many times are quoted as percent of sales, it looks a lot less. The big thing is how often you can turnover your inventory. Gas stations and food supermarkets turn inventory over in a matter of days; when their profits are calculated on turnover they look very modest but as ROI they are fantastic. I wish I could make 39% per year on my total investment.
    An open mind is a virtue...so long as all the common sense has not leaked out.

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    Geof what you say is true. However you took no consideration for the time value of money. At 10% that 39% reduces to 29%, still an excellent return. Now the company can be fat dumb and happy and make no investment towards research, but any wise company will invest in it's future that 29% is reduced by new capital expendatures depending on what the board decides it can afford. Next comes the cost of doing business, employees salaries and benifits, buildings, equipment and maintenance,etc. So simple return on capital investment is a distortion as well.
    Phil, Still too many interests, too many projects, and not enough time!!!!!!!!
    Vist my websites - http://pminmo.com & http://millpcbs.com

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    I found out today that the minimum markup in WI for gas is 9.2% over wholesale.
    The 4.5% was an annual number not compounded weekly. The return on investment (equity) was 10.2%. Still pretty good, I'd say. Like one of the congressmen or senators said, I wish the oil companies would invest some of their money in additional refining capacity and maintenance of existing refineries so we wouldn't have one going down just before the "summer driving season" every year. Why do we have to have "botique blends" in different parts of the country? Pick the best one and use that all over. Economy of scale would more than likely cancel out any cost increase.
    DZASTR

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    Quote Originally Posted by RICHARD ZASTROW View Post
    I found out today that the minimum markup in WI for gas is 9.2% over wholesale.
    The 4.5% was an annual number not compounded weekly. The return on investment (equity) was 10.2%. Still pretty good, I'd say. Like one of the congressmen or senators said, I wish the oil companies would invest some of their money in additional refining capacity and maintenance of existing refineries so we wouldn't have one going down just before the "summer driving season" every year. Why do we have to have "botique blends" in different parts of the country? Pick the best one and use that all over. Economy of scale would more than likely cancel out any cost increase.
    Here's a link to an article about Wisconsin's gas law. It was on Yahoo this afternoon.

    http://news.yahoo.com/s/ap/20070509/.../odd_cheap_gas
    I don't know much about anything but I know a little about everything....

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    Tvom is only related to inflation, so stating 10% is a little off. and I'm sure most companies that gross in the billions don't make 10% profit especially without added value and assets.
    Joe
    BTW all expenditures are included in their profit do you think they aren't going to claim everything and anything they can to the IRS.

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    Quote Originally Posted by RICHARD ZASTROW View Post
    I wish the oil companies would invest some of their money in additional refining capacity and maintenance of existing refineries so we wouldn't have one going down just before the "summer driving season" every year.
    There is a lot of new capacity coming online, almost 8 new refineries worth of capacity will be added by 2011.

    But that won't change anything- demand is still growing and these refiners have their ways of controlling the system.

    Exxon and others own only a part of the sector- the rest is independent and plays by it's own rules.

    Refining, historically, is a high volume low margin type of business. There are times when they make money and there are times when they don't.

    And when they don't, they simply shut down (the extra capacity). It's built into the system and there's nothing you can do.

    Every year there's a switch over- from winter blent to summer blend, to heating oil, etc. They have plenty of ways to manipulate the prices. Or they can simply shut down for "maintenance".

    Some refiners were losing money on every gallon of gasoline as recently as last December.

    Their business model is based on "last in- first out" formula which ties the cost of goods sold to the cost of most recent purchases.

    So when crude oil collapsed, they got caught up with all that $65 oil, and had to sell it at $55 "prices" - which means they were selling their product at or below cost.

    That's when the funny business started, utilization rates dropped, shutdowns, early maintenance, etc.

    Then there was a big fire that shut down one refinery plus some more of that funny "maintenance" and here we are- with $3 gasoline right before start of the summer driving season.

    O, and by the way.. That refinery with a fire? Their stock price is up 50% since December.

    These fires are very profitable..

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