Screwed Twice: OPEC and Capitalism

So I’m talking to my friendly COSTCO gas guy while the numbers are running up on the pump whose hose is attached to my car. ‘paid $1.99 the day before the Saudi led and Russian supported price hike. ‘next day it was up a nickel and shortly after four more cents. At 15 gallons a tank it isn’t much, but what about at 9000 gallons a tank?

Nine thousand gallons is the capacity, he tells me, of their underground gas tanks. They have four. My abbacus tells me that adds up to 36,000 gallons of gasoline.

A side note for your next trivia game (does anyone ever play that anymore?) is that the tanker trucks also hold 9,000 gallons of gasoline, but they are divided into sections so one truck is capable of delivering several different grades of gasoline. At COSTCO you get three choices: regular, high test, or diesel. But at some of the majors one finds degrees of octane as well as diesel, hence most trucks have four compartments.

Let’s assume for ease of arithmatic that the day before the OPEC announcement COSTCO had been serviced. They’ve got  36,000 fresh gallons of fuel sloshing around below decks to be sold at a buck ninety-nine. Another trivia note. They get re-filled on average 3 sometimes 4 times a day! Busier than most are these stations. The local Joe, or Jose, or Achmed’s station pumps 20,000 to 50,000 gallons a day according to the Atlas Oil Research Division.

Now here comes the kick in the ass. Pre-OPEC decision and post OPEC decision the only thing that has changed is the position of the sun in the sky. Thus COSTCO is now making an extra nickel or six cents on the gas they paid for the day before at the discounted price that got translated into the $1.99 retail price. Nor do I mean to pick on COSTCO. I just happen to get my gas there. Why? Because it is usually somewhere between five and 10 cents a gallon cheaper than anywhere else in my market area. The guy who was charging $2.18 for the same stuff COSTCO was getting $1.99 for is really making a killing.

It reminds me of the old days in banking. You’d deposit a check on Monday but the funds might not be available to you for two or three days. Meanwhile, the bank uses your money for that amount of time for free.

Now I’m supposing here because this isn’t a thesis and I’m feeling too lazy to do the research, but feel me on this. The day of the OPEC announcement the oil producing countries of the world had filled up hundreds of oil tanks that held millions of gallons of oil. Refineries had refined many millions, maybe hundreds of millions, of gallons of gas and were pouring it into trucks and train cars. All this at the discounted rate to the supplier who was now jacking up the price to the vendor at the newly configured rates. This hi-jacking of the consumer has taken place without the first drop of newly priced oil being taken from the ground and put into the cycle that ends with the refined and then sold product.

Oh, and let us not forget that the new oil is not one drop different than the old. It is brought up from the ground by the same workers, using the same equipment, putting into the same tankers, taking it to the same refineries who are putting it in the same holding tanks from which the trucks and trains and filled. The only difference is that our dear allies have decided to squeeze our supply (a printable substitute for what they are really squeezing) and doing so because they couldn’t beat us at the first game of making the price so low America would give up on its own production. Nice guys, they.

Somethings smells here and it isn’t just gasoline.

I’m not a socialist, but I am sure a PO’d capitalist.



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