Re: International Pricing Policy

I.P. Nichols wrote:

There is no other economic use for crude oil but use it as oil
refinery feedstock so who are these someone else that will pay for
it. It's value is far less than oil refinery feedstock for some
alternate use like burning it as power plant fuel.

But it's value is determined by what someone will pay for it. The
price people are willing to pay for it has increased quite a bit in
recent times, but costs to produce it remain relatively static.

Since I'm referring to the aggrregate of the oil refining industry
what equation are you talking about?

I'm talking about the price that people are willing to pay for crude
oil, and how it is totally unrelated to how much it cost to produce
that crude oil (or more precisely, the cost of extracting the crude for
use by others.)


You assert as fact that "Costs have nothing to do with price" so
please explain the current situation where the price of gasoline
closely tracks the cost of crude oil. For myself I don't need no
economics to understand that it ain't just a happenstance :)

Sure -- Gasoline vendors charge as much as they can. Since gas is a
relatively /in/elastic item, they can fairly easily raise their prices
wihtout reducing profits.

--
Nick Hodges
Delphi Product Manager - CodeGear
http://blogs.codegear.com/nickhodges
.

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