I orginally posted this on the 230SL diesel thread where fuel prices were discussed, but thought that in our new order here this is where it belongs.
Call me a conspiracy theorist (I'm guilty as charged, Richard!) but regarding diesel and gasoline fuel prices, there's
always an excuse to raise the prices. In the winter it's because of "unusual demand for heating oil". In the spring it's because the refineries are "switching over to gasoline". Gas prices go up because "there's a shortage of MTBE" or whatever the additive du jour is; I think it is currently something called alkylate. They never made enough MTBE and they are not making enough alkylate either. In the midwest the excuse becomes a certain kind of fuel "summer blend" must be made to comply with air regulations, and they can't produce enough of it compared with other refinery needs. When all else fails, you can be sure that a pipeline will break, threatening supplies from Pittsburgh, Cleveland to Detroit and Chicago. All this raises the prices; it's funny in a tragi-comedy kind of way to see what the latest excuse will be. When none of that works, you can be sure that Thursday and Friday will bring higher fuel prices, due to unusual predicted weekend demand...
http://www.boston.com/business/articles/2008/01/31/additive_shortage_means_higher_gas_prices/ Funny, the price of a barrel of crude is almost secondary now to all these other things like refinery capacity, pipelines and additives! (Those outside the USA think us Americans whine about gas prices when they are half of what they are in most of the world, but remember your prices are higher because of taxes. We don't have the social programs nor do we have any public transport to speak of except in a few big cities. Most of America does not have public transport available to them--myself included. If everyone in the USA could move to where public transport was available, what would become of most of our housing stock, suburbs, and where exactly in the cities would we all fit?)
If it isn't fuel it's
another commodity whose price is going up. We have a shortage of de-icing compounds here--salt and calcium chloride. They say they can't get it here because the Detroit River is frozen. My goodness, a river frozen in winter? When was the last time that happened? (hint: every winter).
http://www.chicagotribune.com/news/local/chi-saltfeb08,1,4405849.storyA 50# bag of calcium chloride has gone from about $12 to $17 when you can find it; that went up of course because they can't get the rock salt!
In December, I had some technical experts come in and try to find a leak in the underground radiant de-icing system at my car wash. They determined it was a very small leak caused when the system is cold and not in use, and the only way to find it is to purge the system, pressurize with helium (really tiny molecules) and use a "sniffer" to find the leak. The next day I read in the paper how there's a shortage of helium and the price is skyrocketing.
http://www.usatoday.com/news/nation/2007-12-02-Helium_N.htmIn the car wash business, the cost of hardware has skyrocketed because of a shortage and commensurate increase in the price of Stainless Steel; apparently this is caused by a shortage of nickel.
http://www.abc.net.au/rural/news/content/2006/s1718328.htm The cost of plumbing--essential to car washes and darn near everything else in industry--has skyrocketed because of a shortage and commensurate increase in the price of copper;
http://www.wallst.net/editorials/article.asp?id=498 a piece of 1/2" copper water pipe has gone from a few dollars to near $20 in the past few years. But you can use CVPC--but wait--that price is dependent on oil! Everywhere I turn there's a shortage of something. Never a simple price increase anymore. Always a shortage. About that nickel shortage?
Time Magazine was reporting on it in
1969! It has never gone away, not since my W113 was made!
Welcome to the new global village and world economy.
Paddy--this isn't "inflation". Inflation is a sustained increases in the general level of prices for goods and services. This is
abrupt price increases attributed to shortages, many of which are dubious in nature! I'd believe it is inflation if ExxonMobil said, "due to increased costs of health care benefits for our employees, and the fact that we gave them raises of 3-5% this year, we are announcing a general increase in the price of [insert product name here] of 3% effective 1/1/2008." Instead we pass by the gas station on the way to lunch and see regular at $2.99 a gallon, and on the way back to work an hour later it's $3.15. Inflation is what they keep trying to control with interest rates; these rate changes will have little to do with commodity prices when "shortages" and "factory explosions" and "pipeline maintenance" is involved.
Shvegel--yes indeed I remember the coolant crisis a few years ago. PG and EG were relatively stable in price until "the factory blew up". No, inflation isn't new. But blaming abrupt price increases on all manner of shortages leads one to believe other factors are at work yet!
Michael Salemi
1969 280SL
Signal Red 568G w/Black Leather (Restored)
President, International Stars Section
Mercedes-Benz Club of America
