Cynical Synapse

Mon, 04 Aug 2008

Oil Costs Higher than Just Record Profits

Filed under: Economy, Gas Prices, Legal, Oil, Rants, Take action — Tags: — cynicalsynapse @ 11:46 pm

This has been a painful week regarding oil for most of us who live in the mundane day-to-day world. Yes, oil prices seem to be down and, with them, gasoline prices as well. Despite the fact that two months ago, the record prices quoted were for July and August delivery. I never understood how a record price per barrel could instantly translate to higher pump prices. Did someone forget the time for shipping, refining, and shipping again?

Fast Track charges a premium for credit purchases.

So, pump prices crested at over $4 per gallon in much of the country. Now, God knows why, the price has fallen back to $3.75-$3.89 in my area. They say reduced demand, but I don’t see that on the road, unless all the Chinese decided to park their cars this month. But here’s the catch. That price spread is based mostly on the “cash” price and the “credit” price. With some exceptions, that’s a new and, I think, very dangerous trend. It has rippled from a station or two to become commonplace among Detroit’s northern suburbs. You see a price advertised that you think is the regular (87 octane) price. That’s true only if you pre-pay cash. If you use credit, such as pay at the pump, the price is about 12 cents higher, which is in the middle of the sign. That’s the price you used to think was mid-grade. Stations don’t advertiset that anymore. Just regular cash and regular credit along with diesel cash and diesel credit.

Having learned this lesson on the new method of pricing, I could probably accept that except I think it’s inherently deceptive. It’s another means for the oil companies to suck money out of our pockets. Does it really cost 12 cents a gallon to accept a credit card? I doubt it. Why should I pay the bank big fees to get cash out of the ATM to save at the pump? Either way, it’s coming out of my pocket through an extra reach in.

So, I think the cash and credit prices that seems to be a sudden trend at area gas stations is deceptive. How is it any different from the old bait-and-switch concept? At the very least, it seems to violate the provisions in MasterCard’s rules (section 5.9.2). I suspect it also violates Visa’s rules, but they’re not so easy to find from their website and I’m waiting on an email response.

Frankly, the dishonesty in posting gasoline prices is disturbing in the same manner as the sudden appearance of $80 fuel surcharges on airline tickets. What’s truly disconcerting is this all piles on top of ExxonMobile’s record-breaking net $11.68 billion quarterly profits. NET profits—that’s after taxes and expenses. For a single QUARTER!

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