Inflation here? gas/grocery prices just continue to climb (1 Viewer)

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Rickboy said:
Went to Chick-Fil-A today. It’s been a while. Each combo meal was almost $9.00. Shakes were $5. All together it was just a hair over $40.

Yea, I’m not going to be doing much eating out any longer.
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oh thats not inflation....thats their @!$@##$%@#$@# regular priced menu. And thats AFTER sitting in drive thru line for 17 min.

I cringe when i get home from work and see the Chik-Fil-A bags on counter.

Family hip now---- they toss em in the outside can vs leaving inside for me to see.

Youngest had 2 friends over yesterday and wife took em to Chilis for a burger etc....she came home and tossed me the receipt- $67. 3 - 13 yr old girls that eat like birds.
 
efil4stnias said:
oh thats not inflation....thats their @!$@##$%@#$@# regular priced menu. And thats AFTER sitting in drive thru line for 17 min.

I cringe when i get home from work and see the Chik-Fil-A bags on counter.

Family hip now---- they toss em in the outside can vs leaving inside for me to see.

Youngest had 2 friends over yesterday and wife took em to Chilis for a burger etc....she came home and tossed me the receipt- $67. 3 - 13 yr old girls that eat like birds.
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Yeah, it's pretty absurd. And old habits die hard. Gonna bankrupt me. Geez. Trying to eat more at home but lately kinda failing at it.
 
Big Oil took it in the shorts during COVID and all of the majors went through several rounds of layoffs. They are highly profitable right now but are climbing out of a large hole.

Nobody seemed to think they were in cahoots when the price of oil went negative...
 
Rickboy said:
Went to Chick-Fil-A today. It’s been a while. Each combo meal was almost $9.00. Shakes were $5. All together it was just a hair over $40.

Yea, I’m not going to be doing much eating out any longer.
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Yeah, we were forced to stop doing everything... from dining out to entertainment, it's all a thing of the past. If I lose this internet connection I'll be completely cut off from whatever goes on outside my home & my place of employment.
It makes me wonder how people without a full time job can survive at all. :unsure:
 
UncleTrvlingJim said:
Interestingly enough, oil prices were this high in 2013/2014, but average price of gas was like $3.60 then.
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But inflation wasn't 8.5% in 2013/14 - crude is not the only input cost for a gallon of gas. Every aspect of drilling, transport, refining and distribution is more expensive (and rising).

*edit*

lots of states have raised their gas tax in recent years too.
 
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UncleTrvlingJim said:
Interestingly enough, oil prices were this high in 2013/2014, but average price of gas was like $3.60 then.
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Part of it might be refining capacity. They've reduced refining capacity by 1,032,000 barrels a day. Our percentage of capacity that is actually being utilized has been going up but you also have to consider the change in seasonal blends. They have much thinner buffers in capacity. That could be intentional, but overall it's obvious to me that oil companies have greatly increased their margins.

IEA data on refinery capacity and utilization.
 
Mr. Sparkle said:
But inflation wasn't 8.5% in 2013/14 - crude is not the only input cost for a gallon of gas. Every aspect of drilling, transport, refining and distribution is more expensive (and rising).
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I'm not sure that the cost of gas is directly caused by inflation of the raw inputs. It's obviously a part of it.... but gas is about 25-30% higher than it was in 2013/14 with the same price of the main input (crude oil). I could be wrong, but I suspect that the price we're seeing at the pump is not a direct result of inflation of all the input variables... which I think is reflected in the increasing profit margins of gas producers.

It is inflationary in that, production is not keeping up with demand, and the demand curve is fairly inelastic (it'll eventually hit a point where we have demand destruction).

However, I am not alleging some sort of greedy plot by oil and gas companies. The prices we're seeing are not good from a profit maximizing standpoint in the long term. I'm sure most execs would much rather gas be around $4/gallon or less. Having it this high obviously increases the chance of a recession which will hurt them as well as accelerate the adoption of alternatives.
 
Mr. Sparkle said:
But inflation wasn't 8.5% in 2013/14 - crude is not the only input cost for a gallon of gas. Every aspect of drilling, transport, refining and distribution is more expensive (and rising).

*edit*

lots of states have raised their gas tax in recent years too.
Click to expand...

That doesn't change the fact that profit margins are going up. And I mean growing MASSIVELY. They're on track to more than double the net margin for 2021. Net margin for all of 2021 was 4.74%. So far, for 2022, it's 12.47%

Oil And Gas Production Industry Profitability by quarter, Gross, Operating and Net Margin from 4 Q 2023

Oil And Gas Production Industry Gross Margin, Operating, EBITDA, Net and Pre Tax Margin, high, low and average from 4 Q 2023 - CSIMarket
csimarket.com
 
UncleTrvlingJim said:
I'm not sure that the cost of gas is directly caused by inflation of the raw inputs. It's obviously a part of it.... but gas is about 25-30% higher than it was in 2013/14 with the same price of the main input (crude oil). I could be wrong, but I suspect that the price we're seeing at the pump is not a direct result of inflation of all the input variables... which I think is reflected in the increasing profit margins of gas producers.

It is inflationary in that, production is not keeping up with demand, and the demand curve is fairly inelastic (it'll eventually hit a point where we have demand destruction).

However, I am not alleging some sort of greedy plot by oil and gas companies. The prices we're seeing are not good from a profit maximizing standpoint in the long term. I'm sure most execs would much rather gas be around $4/gallon or less. Having it this high obviously increases the chance of a recession which will hurt them as well as accelerate the adoption of alternatives.
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Well, some people are giddy about accelerating the alternatives, but I'd rather it just be sort of organic rather than forced.
 

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