Tag Archives: Gasoline prices

Dear President Bush: Send More Money !

President George W. Bush
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Bush,

Just wanted to let you know that we received the very generous “economic stimulus” check you sent us recently. It was greatly appreciated.

We thank you.

ExxonMobil thanks you.

The oil speculators thank you.

Saudi Arabia thanks you.

(just to name a few)

Oh, I almost forgot… There’s just one problem. It’s all gone. With each visit to the gas station costing $75.00, your check didn’t go as far as we expected. And now, our gas gauge is on empty again.

Please sir, may we have some more ?


Routing By Rumor

P.S. – Please also send another check to all of the people who have posted comments below.

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The Commodity Crisis Du Jour – Gasoline… Rice… Now Corn. What’s Next ?

Jerry Edle, left, and Dave Lanz keep an eye on a large
propane tank which they are towing through a flooded cornfield,
in Oakville, Iowa, Monday, June 16, 2008.  The tank floated away
during flooding. (from yahoo.com - AP Photo/Sue Ogrocki)

As if the American economy and the American consumer weren’t being pinched enough by $4.00 to $5.00 a gallon gasoline prices, here comes another big hit.

The flooding in the Midwest will have a major impact on corn prices (see this article), corn supply, and a ripple effect that will be felt in almost all food categories, from breakfast cereals to meat and poultry, to soft drinks and every other food item that contains corn or corn-derived ingredients. Examples of important corn-derived products are corn oil and high fructose corn syrup. They’re used to produce everything from margarine and soda pop, to french fries to bakery items. And rising prices and shortages of corn-derived ethanol will simply fuel higher gasoline prices. Ethanol production was already putting a strain on corn supplies and driving up the price of corn even before the flooding in America’s corn belt impacted this year’s crop.

A police officer \

A police officer demonstrates his finely honed public
relations skills, and welcomes home a resident of
flood ravaged Cedar Rapids, Iowa (read story)
(AP photo/USAToday by Seth Wenig - Caption by RoutingByRumor)

Just like the rising price of crude oil, rising prices for corn will have an almost immediate impact on the cost of many of the things you buy. In fact, corn probably plays a more important role in the food chain than wheat, rice, oats, or any other grain.

If you thought the size of the box of your favorite breakfast cereal was shrinking, you ain’t seen nothing yet. If corn prices go through the roof, you’ll need a microscope to find your cereal boxes. Maybe we’ll switch to shredded wheat.

We expect that in addition to seeing rationing or purchase limits on rice at the supermarket, you’ll soon see shortages and rationing of corn and products containing corn as a major ingredient.

Better start stockpiling the Doritos and the Corn Pops.

– Routing By Rumor

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What’s Wrong With This Picture ?

credit: The New York Times / Sandy Huffaker

As just about everyone whose body temperature is above room temperature knows by now, gasoline prices have gone through the roof. You pretty much expect to see even higher prices each time you pass a gas station.

Most of us wonder who it is that is profiting from these spiraling prices. Many of us expect to see gas shortages, long gas lines, and gas rationing pretty soon. At the same time, station owners are crying poverty, claiming they make only pennies on each gallon of gas sold.

Then would someone please explain the prices in the above photo, from this New York Times article published May 24, 2008 ? We are hesitant to use the term “price gouging”, but there doesn’t seem to be any plausible explanation for the price differential between the “credit” and “full serve” pricing at this Union 76 station in La Jolla, California (The Union 76 brand is owned by ConocoPhillips). While not clear from the photo, we believe that the “credit price” implies self-service. In fact, why in the world would the credit card price be lower than paying cash, in the first place, self-service or not ? And why would gas at the full service pump be up to $1.20 a gallon more expensive ? Something stinks in La Jolla, and we don’t think it’s the MTBE in the gas. Do supermarkets that have self-service checkout lanes charge $1.00 more per item if you pay at a register with a real live honest-to-goodness cashier ?

Here in the Northeast U.S., gas stations generally set a single price for gasoline, regardless of whether you pay with cash or credit card. If a station differentiates between self-service and full-service (which is a misnomer anyway), it is generally a few cents a gallon.

While we’re on the subject of “full service”, when was the last time a gas station offered to check your tire pressure, oil level, coolant level, etc., or wash your windshield ? Full service my foot. We doubt most of the gas jockeys working at these stations would know how to open your hood, much less find your dipstick. Most of the time, you’re lucky if they can find where to insert the gas nozzle, and if they speak English. We wouldn’t pay one cent more for their supposed “full service”.

ExxonMobil just announced that they will be selling all of their company-owned gas stations to their distributors or to other buyers, because there’s no money in the retailing end of the business. Well, when you can make record-setting obscene profit by refining the product, we suppose you might loose interest in the lower profit parts of the business. (It’s sort of like why bank robbers never demand coins, preferring the paper money instead.) Maybe ExxonMobil should use the price model that Union 76 is using at the above station. If they could add up to $1.20 profit per gallon to their sales, we suspect that owning the stations suddenly becomes very profitable indeed !

Getting back to our original question of “What’s wrong with this picture?” we think there are many things wrong on many levels. Why is gasoline $4.00 or $5.00 a gallon, and climbing? Why hasn’t the United States done more to lessen our dependence on foreign oil? Why is this country in love with gas-guzzling vehicles? (although that is starting to change). Why are the big oil companies allowed to rake in record profits, while much of America is hurting from the spiraling cost of energy? Why aren’t we seeing more government mandates or inducements to effect energy conservation, such as carpooling, discounts on mass transit fares, tax breaks to employers who encourage telecommuting, restrictions on the use of non-essential lighting, etc? (When there’s a water shortage, restrictions are put in place on non-essential water use. We think the same should be done regarding non-essential energy use, especially by commercial users.) How about giving free bicycles or scooters (or tax breaks) to city-dwellers (or anyone) who pledge to go car-free at least one day a week?

Oh, and does anybody actually opt for the “full serve” pumps at this, or any other Union 76 station ?

– Routing By Rumor

P.S. – Another suspicious thing about the prices displayed in the above photo is that all the prices are in the form $ xx9.9 ! While it is customary for gas retailers to always tack on that 9/10 of a cent, it looks like some retailers, this station included, have adopted the practice of tacking on 9.9 cents to everything. We guess the next logical step is to go to the $ x99.9 pricing model, where all grades of gas will sell for $4.99, $5.99, $6.99 a gallon, etc. Why bother raising the price by 10 cents or 20 cents every couple of days. Just start raising it in one-dollar-a-gallon increments.

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The Price Of Oil Is Increasing 150% A Year ! Is The $200 Barrel Of Oil Too Far Away ?

It was just over three months ago that we noted that the price of crude oil had passed $100 a barrel for the first time ever. Now, in less than four months, it has increased another 40%, and is closing in on $140 / barrel. Almost every day sees a new record high for the price of crude, and Friday was no exception. That equates to an annual increase in the price of oil somewhere around 150%. Based on the past few months, we think oil might hit $200 a barrel before the end of the year. If you think the U.S. economy is in trouble now, imagine what that will do to it.

Gasoline is at or above $4.00 a gallon in much of the U.S., with predictions of $5.00 to $6.00 a gallon by the end of the summer. It seems that those economic stimulus checks that Uncle Sam and his nephew George W. were kind enough to send y’all are little more than a gift to the oil companies and market speculators. Being able to afford to fill their gas tanks is the number one concern for most Americans now.  You would think that sky high gasoline prices would make a big enough dent in demand that there will be no gasoline shortages.  The truth is that the underlying cause of high prices is a tight supply and global demand for oil.  Because of this, we believe the next gasoline crisis is not too far down the road.

Look what fuel prices have done to the market for larger vehicles. Truck and SUV sales have dried up to the point that the market resembles the real estate market. Car dealers and real estate salespeople have joined the exclusive club once reserved for the Maytag repairman.

If you think increasing food prices and inflation in general are bad now (don’t believe the fairy tale statistics that Washington tries to feed you), just watch what happens over the next few months. Inflation, the cost of energy, and the economy (yes, Virginia, we ARE in a deep economic recession) are such problems that they have succeeded in replacing Iraq on the front page of your newspaper for the past few months.

These concerns have prompted the economic gurus at RoutingByRumor to come up with our top ten list of concerns that Americans are faced with…

  • Skyrocketing gasoline prices (try filling your tank)
  • Skyrocketing food prices (try keeping food on the table)
  • Energy prices (try heating/cooling your home)
  • Inflation (try to keep up)
  • Skyrocketing healthcare costs (try getting sick)
  • The real estate slump (try selling your home)
  • The foreclosure crisis (try holding onto your home)
  • The deteriorating job market (try finding a decent paying job, or any job at all)
  • Stagnant or decreasing wages, benefits and income (especially investment income)
  • The lack of leadership in Washington (try to find a real President)

Gee whiz… terrorism, illegal immigration and global warming didn’t even make the top ten. That’s how bad things are.

– Routing By Rumor

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A Lesson From The Bush-Cheney School Of Economics, Washington, DC

Main campus of the Bush-Cheney School of Economics, Washington, DC


OK class, ready for today’s lesson?

Good …Repeat ten times after me:

We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession. We are not in a recession.

Very good. Now, to recap…

We are not in a recession.

Any questions ?

Yes, the fellow in the back row, go ahead…

“Professor Routing By Rumor, you are repeating the administration’s claims, and telling us that there’s no recession, yet there are signs everywhere you look that tell you otherwise. In fact, Professor, you’d have to be deaf, dumb and blind to not see proof everywhere that we are indeed in a deep recession, or worse. You know, Professor, denial is not just a river in Egypt !”

I’m the professor here, and there’s no recession because I said there’s no recession. That’s sort of like how it works in Washington, too. All they have to do is adjust the definition of a recession to fit their needs. And for every fact you can produce that proves we’re in a recession, they can dredge up ten that will prove we’re not in a recession. Of course, they haven’t lost touch with reality completely, and they realize that they have to admit to some bad news. So they tell us we’re inching close to a recession, but that the U.S. economy is still healthy. Maybe a tad sluggish, a bit of a downturn, a slight dip perhaps, but not a recession. Definitely not in a recession. Call it anything you like, but don’t call it a recession.



Today, while discussing the latest employment figures, President Bush said “That’s a sign that this economy is not as robust as any of us would like it,”. Saying that the U.S. economy is not as robust as we would like it is like saying the Titanic was not as waterproof as they would have liked it. Mr. Bush wins first prize in the Routing By Rumor understatement of the year contest. He gets two (2) one-way tickets from Washington, DC to Texas, valid until January 20th, 2009. We figured he’d want to take Laura home with him, so we thought the second ticket would be a nice touch. If he wishes to use the tickets sooner, so much the better for the U.S. economy, not to mention the mess in Iraq.

The economy is getting worse on a daily basis. Bankruptcies, foreclosures, layoffs, and downsizings are at record levels. The cost of living is going up at record levels. Gasoline and food prices are increasing daily. We’re starting to see retailers ration some foods. Decent paying jobs with good benefits are becoming harder and harder to find, if they exist at all. The real estate market is in horrific shape. Interest income has evaporated for millions of seniors that depended on it to survive, and you can’t find a good place to invest your money… certainly not Wall Street.

You are probably asking yourself when the administration will start being honest with the American public, so here’s what we believe to be a likely timetable…

It’s a pretty good bet that hell will freeze over before the Bush administration acknowledges a recession.

Expect to see Osama Bin Laden release a video apologizing to America, before George Bush admits what 99% of America already knows.

You will see Cuba become the 51st state before the White House levels with you about the economy.

Chances are that Venezuela’s Hugo Chavez will proclaim his love for America before George Bush takes off his rose-colored glasses, and sees the world the way everyone else does.

Iran and Hamas will each profess their love for Israel before you hear the “R” word coming from George’s lips.

Shites and Sunnis will be kissing each other and dancing in the streets of downtown Baghdad, on the same day that the New York Times prints the headline “Bush Says Economy Is In Recession”.

Friends, it just ain’t gonna happen.


Oh… and while we’re on the subject of hell freezing over, here’s something you’ll see when that happens.

credit: worth1000.com & talkintrumpeter2

– Routing By Rumor

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Oil Closes Above $100.00/Barrel, Toilet Paper Closes Above $1.00/Roll, Wal-Mart’s Quarterly Sales Surpass $100 Billion and Postage Rates Are Going Up Again !

All of these increases are related, and they all spell serious trouble for the U.S. economy.

Energy costs are driving up the price of all consumer goods and services. Raw materials, production and transportation costs are all being pushed higher because of the price of oil.

U.S. crude for March delivery jumped $4.51, closing yesterday at $100.01 a barrel on the New York Mercantile Exchange. The previous record close was $99.62 on January 2, 2008. It has never closed above the century mark until now.

In a recent shopping trip, we found single rolls of Scott toilet tissue selling at a national drugstore chain for $1.15 a roll. I’ve never seen single rolls of toilet paper priced at or above $1.00 a roll. The cost of paper products seems to have increased 25-30% within the space of a few weeks.

And with Americans hard pressed to stretch every dollar, Wal-Mart continues to post record sales figures despite the widespread belief that retailers such as Wal-Mart are major contributors to the nation’s economic problems. The United Food and Commercial Workers (UFCW) union says Wal-Mart employs more than one million U.S. workers, earning an average of $8.00/hour.

If you need a better feel for what $100 billion actually means, it’s the same as saying “one hundred thousand million dollars”. It’s $100,000,000,000.00 …and that’s just for the fourth quarter of 2007. That works out to more than $1 billion a day, or put another way, more than a thousand million dollars every day. That translates to $400 billion a year if they continue those figures for four quarters. At this rate, Wal-mart, the world’s largest retailer and the largest private employer in the U.S. (see this UFCW fact sheet), will have a trillion dollars in annual sales before long.

The prices mentioned above are significant milestones, even if the specific numbers are not economically significant. It’s similar to when U.S. gasoline prices went above $1.00/gallon for the first time, back in the Summer of 1979. We feel that they portend even higher prices in the near future. Expect sharp increases to continue in the cost of living and inflation. Expect the size of those rolls of toilet paper to continue shrinking, while the price continues heading North. If you have any letters to mail, better do it soon. On second thought, use e-mail.

Trips to the supermarket are getting more painful every week. All of the basic grocery items, bread, milk, eggs, cereal, etc. are rising sharply. For instance, we’ve seen the price of a dozen eggs almost double in the last few months. Too bad gasoline doesn’t taste better, because milk is now almost double the price of gasoline, per gallon. It makes you wonder if the cows are the ones who are getting milked. We’ve seen some bakeries raising prices so often that they don’t even wait until their old packaging is used up before they raise the price. They are covering the printed prices on their plastic bags with stickers showing the new price. I’ve seen that some boxes of cereal have shrunk to less than 9 ounces. For instance, I spotted a 8.9 ounce box of General Mills Cheerios.

Who decides on these strange product sizes? Did a committee of pricing experts say that 9 ounces was way too big, but 8.75 ounces looked too small ? It’s voodoo marketing. It’s deception engineering. What’s next? The 8.1275 ounce box of Kellogg’s Frosted Flakes?

We can’t remember any time in the past 30 years that the cost of living has risen so sharply and for so long a period of time.

Just nine months ago, the Postal Service raised the first class postage rate (up to one ounce) by two cents, to 41 cents. They have just announced another increase to take effect this Spring. No wonder they introduced their “Forever” stamp. They saw these frequent rate increases coming, and probably wanted to limit the public outcry. Unless you have lots of money to tie up in “Forever” stamps, the idea of locking in your postage rate is pretty meaningless. You’d be much better off investing your money anyway. What we need is the “Forever” gallon of gasoline and the “Forever” quart of milk. Shoppers going to the supermarket are behaving more and more like stock market speculators every day. Should I buy that loaf of bread today? I really don’t need bread yet, but it might be 30 cents more tomorrow. Better fill up the car today, because the radio just said the price of a barrel of oil hit a record high yesterday, and that means the price at the pump will be going up in the next couple of days.

With these almost daily price increases and product downsizings, what we need is a new way of tracking the true cost of living. Forget about the U.S. government’s inflation index. Forget about the “market basket” price surveys. Forget about The Lundberg survey of gasoline prices. What this country needs is “The RoutingByRumor National Toilet Paper Price Survey”, adjusted of course, for the shrinking size of toilet paper rolls. Laugh all you want. We think it will be a very accurate gauge of inflation.

– RoutingByRumor

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