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This and That

Gasoline Shell Game

Is there something wrong with the above chart or can it be argued there is no correlation, whatsoever, between the price of crude and what is paid at the pump?  Regardless of the answer, one thing is painfully obvious to those  who can do simple math – we are puppets when pulling up to a gas pump because the gas pimps are pulling our strings.  Let’s break down the chart to more easily understandable numbers.

On May 5, the price of crude was about 104.25 a barrel while the average price at the pump was about 3.79 a gallon.  On June 1, the price of crude was about 84.00 a barrel while the price of gasoline was, on average, 3.62 a gallon. Starting to see a trend here?

The difference between the price of crude and what was paid at the pump on May 5 was

100.46. Fast forward to June 1.  The difference between the two dropped to 80.38.

Enter, now, the “goofy” math.

Following the same trend, if the accelerated decline in crude oil price continues to outpace the turtle-like crawl of gasoline (1.35 cent decline per one-dollar drop in crude oil), an interesting picture emerges.  Let’s look at it in chart form.

Price of Crude Price at Pump % Difference
104.25 3.79 3.64
80.38 3.62 4.58
60.00 3.45 5.75
40.00 3.28 8.20
20.00 3.11 15.55
00.00 2.94

So, the next time you read a news story about Exxon, or some other oil company, posting a quarterly profit of x gazillion dollars, the reason is simple: They ARE NOT passing on savings to the consumer in concert with the company’s reduced cost for doing business. Sadly, the only way we can receive fairness at the gas pump is not drive. In contrast, if a lumber yard raises the price of plywood by one dollar during an approaching hurricane, all hell breaks loose. Go figure.


About cayenne1011

Network administrator, systems analyst. Loves physics, cosmology, writing, and everything creative. Wherever I go, there I am.


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