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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (324512)	2/5/2007 1:34:52 PM
From: tejek	Respond to of 1575552

Why gas prices aren't falling By MADLEN READ NEW YORK — The headlines say oil prices have fallen 15 percent this year. Gas-station receipts tell a different story — the cost of filling 'er up has slipped from about $35 to $33. Big deal. The cost will probably drop further, but drivers shouldn't hope for a big windfall at the pump: There's a lot more that goes into gasoline prices than the cost of crude oil. Besides taxes and the costs of refining, distributing and marketing, there are factors such as local competition among gas stations. "If gasoline costs me a dollar a gallon, and my competition down the street is selling it for 89 cents, my customer doesn't care what I paid for it," said Richard Oneslager, president of Balmar Petroleum, which operates 14 gas stations in Colorado. Crude-oil prices have fallen from about $61 to $51 a barrel this year on the New York Mercantile Exchange, but the price of gasoline on the side of the road has declined more slowly. The average price for a gallon of regular is down about 13 cents from $2.33 on Jan. 1 to $2.20 on Friday, a day after crude briefly fell below $50. A typical car holds 12 to 15 gallons, so if it's filled four times in a month, that's savings of less than $8 in a month. Essentially, the recent price drop hasn't completely sunk in on the wholesale level, so gasoline retailers are still paying a lot for their product and won't lower prices until competition forces them to do so. The Energy Department says the price of crude oil accounts for about half the retail price of gasoline. That means if crude oil is down 15 percent, pump prices should be down almost 8 percent. But the time it takes for a drop in wholesale prices to fully affect retail prices is around 12 weeks, though most of the drop happens within the first two weeks. "Retailers aren't making their price decisions on the price of crude oil," said John Eichberger, vice president of government relations at the National Association of Convenience Stores. Instead, they focus on how much they paid for their current load of gasoline, and how much their supplier is telling them their next load will cost. Read more............ seattletimes.nwsource.com