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Thread: Aruba gas prices

  1. #11
    Senior Member act1966's Avatar
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    Quote Originally Posted by aquaman View Post
    Wondering why, when globally oil prices are so low, the gas stations here continue to charge such high prices. Same prices as when oil was over $100 a barrel. Now it's at something like $35 a barrel.

    Someone needs to explain this
    I ask the same question about Canadian liquor prices.

  2. #12
    Member NH Mark's Avatar
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    I'm pretty sure that the present cost of fuel on Aruba has to do with futures buying. For instance, the fuel being sold today was "purchased" in the futures market months or even a year ago. Therefore, we pay at the pump whatever the fuel cost at the time of the futures sale/purchase.

  3. #13
    Super Moderator Jacki's Avatar
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    Similar to the price of electricity.
    Jacki ~ loving Aruba from NJ

  4. #14
    Senior Member arubabob's Avatar
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    Quote Originally Posted by NH Mark View Post
    I'm pretty sure that the present cost of fuel on Aruba has to do with futures buying. For instance, the fuel being sold today was "purchased" in the futures market months or even a year ago. Therefore, we pay at the pump whatever the fuel cost at the time of the futures sale/purchase.
    The fallacy of oil pricing is that big oil companies set the prices, they don't. the stock market oil futures investors set the price. Same with futures in everything that can be bought on the futures or commodities markets such as gold, wheat and soy beans. Even the Aruban florin and other currencies are set by brokers in what they will pay, day to day for any particular commodity. When oil is $100 a barrel the small and large producers drill more wells and produce as much oil as possible. The recent high prices for oil have made it financially feasible for small oil producers to drill wells that at $30 or $40 a barrel are not financially viable. As an example, when you drill a well you try to estimate how much oil it will produce on a daily basis. When oil was $45 a barrel it would not be feasible to drill a well that would produce say less than 15 or 20 barrels a day because of all the costs involved in completing a well to production. At $100 a barrel, you could make money on a well that produces only 5 or 10 barrels a day. What most people don't know is that the majority of companies drilling wells in the U S are not big oil companies like Exxon and Shell, they are small independent producers with less than 100 employees. There are hundreds of these small companies in the U S. They produce over 80% of the oil in the U S each year. My DW works as a CPA for one of these. They have about 50 employees and drill mostly in Oklahoma and Texas. With oil prices at the current lows, they have ceased all drilling and shut down some wells because they would cost more to operate than they bring in. Low oil prices mean less production so gasoline prices don't drop as fast as you would think. That being said, gas was $1.44 a gallon here last week but it is up to $1.57 today.

  5. #15
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    3.8 liters =1 gallon

  6. #16
    Aruba since 1979
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    Andrea J.'s Avatar
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    you explanation is so much better than the talking suits on CNBC.
    thanks

    Quote Originally Posted by arubabob View Post
    The fallacy of oil pricing is that big oil companies set the prices, they don't. the stock market oil futures investors set the price. Same with futures in everything that can be bought on the futures or commodities markets such as gold, wheat and soy beans. Even the Aruban florin and other currencies are set by brokers in what they will pay, day to day for any particular commodity. When oil is $100 a barrel the small and large producers drill more wells and produce as much oil as possible. The recent high prices for oil have made it financially feasible for small oil producers to drill wells that at $30 or $40 a barrel are not financially viable. As an example, when you drill a well you try to estimate how much oil it will produce on a daily basis. When oil was $45 a barrel it would not be feasible to drill a well that would produce say less than 15 or 20 barrels a day because of all the costs involved in completing a well to production. At $100 a barrel, you could make money on a well that produces only 5 or 10 barrels a day. What most people don't know is that the majority of companies drilling wells in the U S are not big oil companies like Exxon and Shell, they are small independent producers with less than 100 employees. There are hundreds of these small companies in the U S. They produce over 80% of the oil in the U S each year. My DW works as a CPA for one of these. They have about 50 employees and drill mostly in Oklahoma and Texas. With oil prices at the current lows, they have ceased all drilling and shut down some wells because they would cost more to operate than they bring in. Low oil prices mean less production so gasoline prices don't drop as fast as you would think. That being said, gas was $1.44 a gallon here last week but it is up to $1.57 today.

  7. #17
    Senior Member AndyM's Avatar
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    Quote Originally Posted by Jacki View Post
    Because they can? And we (all) pay it?
    This is it. We are a captive audience. No options. Take it or leave it...

  8. #18
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    since the aruban government sets gas prices,no competition breeds higher prices.enough said��

  9. #19
    Member PawPaw's Avatar
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    Shipping

  10. #20
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    Quote Originally Posted by PawPaw View Post
    Shipping
    no I don't think so.. A lot stored at refinery here.it comes from Venezuela

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