Why Is Motor Oil Still Priced so high ??

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I'm thankful that the government has not completely shut off competition. I'm happy to pay the price for a good oil. I think it's still a bargain. It's a very small part of my maintenance program for 2 vehicles. I use what I consider the best oil out there and I gladly pay the extra expense for it.

And to TiredTrucker, thanks for keeping in there. We need you to continue to succeed and make a profit. You keep the economy moving. Without trucks nothing moves. If the government takes complete control we're screwed. The government has failed at everything it has tried to control and take over, everything.
 
Supply and demand. The same reason why airfares haven't fallen, even though they jacked up the fares when fuel rose in the last decade. Airfares haven't come down, either.
 
Originally Posted By: TiredTrucker
Transportation costs are a major player. I posted this elsewhere, but here goes....

I run a trucking operation. In a nutshell, if you want me to haul a load for you, at the same price or lower than i did it for just 6 months ago, I will not show up at your dock. You want the service, you have to ante up. Fuel and oil prices have very little if anything to do with how much you are going to pay to move product.

In this last economic downturn, the trucking sector lost a considerable amount of capacity. In one quarter alone, 80,000 trucks got taken out of the pool in the U.S. And government regulatory nonsense really made matters worse, and sped up the process of capacity downturn. And the existing pool of qualified drivers is lowest it has been in several years. Now the economy starts to get moving, more freight needs moved, there are fewer trucks and drivers to do it, and you have a situation where trucks are going to be allocated to the best customers who are paying the best rates.

And you can't just add on more trucks. Well you could, but they are going to sit. There just isn't a pool of qualified drivers to put in them. Government regulations have caused extreme tightening of the driver pool in both the regulatory requirements and the lack of desire of drivers to put up with the government nonsense and therefore bail out of the field. So, the ones who do stay and are qualified, the companies are having to fight each other over who gets them. Pay and benefits have to increase to attract the drivers. Again, you just can't add people. Government regulatory requirements, the desire of folks to put up with it, and the hassle by insurance companies and lawyers makes it extremely difficult to even attract people to do the job, let alone even get them in the seat. Many folks would throw a fit over the regulatory anal exam drivers have to go thru, with the constant hovering of government threatening your livelihood any given day. And taxation costs are such that a typical over the road truck pays more in just taxes and fees across the board alone than the average person in America earns in income.

Equipment costs are drastically more higher, due to the massive environmental regulations on heavy diesel engines in the last 8 years. It has magnified the cost in both acquisition and operation, and plays havoc on the net weight a truck can haul. Maintenance and downtime has increased significantly. So even less available capacity on a given day.

A lot of stuff moves by rail, but a truck has to get it from the rail yard to where ever it is needed. You can't just pull up a CSX box car to the back of a Walmart. Rail is already nearing capacity itself. There just isn't an unlimited amount of rail cars to throw stuff on. Again, the highest bidder and best customer gets the space on the train. Air freight, over 80% of air freight actually moves, hub to hub, by truck, and not on a plane.

Virtually all of this has been government inspired. Of almost every negative situation in transportation now can be laid at the doorstep of a government agency. But, keep in mind, your government cares for you! Keep that in mind as you break out your wallet and pay for your goods and services.


I have worked in the Federal, State, and local transportation realm. The "Doc" part is in Transportation and fuel economy... with CDLs in the family. The folks working with the government DO care. And when you open your wallet, keep in mind that you get what you pay for... and that "Government" dysfunction is all about you who you send to represent yourself. In DC we had a saying, it would be a wonderful town if the rest of the country did not send us 535 village idiots.
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Unfortunately, (or fortunately) Public infrastructure for transport is what "works". XX% folks are fine but it is those bad bushels of apples that cause issues. Either by ignoring safety concerns for profit or ignorance, there are steep regulations protecting the public from negligent drivers (and my college friend lost his mother from a truck driver that was on the road way to long). Actually, ask a class of civil transportation engineers if they lost someone dear to them in a highway fatality, and you would be surprised how many raise their hand. As for pollution, talk to someone in a city... or worse, a mountain-valley city. All of a sudden, those regulations make sense. It becomes a tragedy of the commons. You can't have millions of VMT happening in a area without issue. (Actually, we should talk about how non-US trucks skirt emissions regs). It is not like the trucking industry ensure that all fuel tax (which is unbelievably cheap) goes into the highways (it does for diesel). Still, we are reaching capacity of our interstate system. The long-haul freight trucking system is already starting to reach the upper realistic limit for many corridors across the country. Unfortunately, if you want to fix that, you need the "government" because private efforts can't solve large-systems capacity items. Until about 5-7 years ago, it used to be that regardless of politics, transportation was funded and supported by any and all sides of the political isle. Now, it is just another political football. So if Fed 19/25 cents is too much... well, maybe it should rethink how we build roads. Honestly, it should stay around 25%the cost per gallon (the original tax passed). So $2/g cost $0.50 extra and $4/g cost $1.

You can't pull up a box-car to a walmart because WE changed the transportation network. It used to actually be that way. Also that way at ports before RR. The US subsidized highway development through a fuel tax... and it was successful. You want silly. Explain why you would take cargo from the ship, truck it 5 miles through a neighborhood to rail depot? Rather, the solution would be to build the rail to the ship. It is common efficiency here.

FYI, transportation is a major factor in cost. It is a lot more expensive to transport bottles. This is why drink companies have many different bottling plants rather than just one. Any "weight added" product incurs this cost.
 
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There is only about $.30 worth of crude oil in a quart. When a barrel cost twice as much, there was $.60 worth. So.....The cost of lubricating oil has little to do with the raw product, and much to do with the cost of processing and tranporting.

I remember when gas was 30 cents a gallon, and you could buy bulk (almost crude) oil in a refillable bottle for 25 cents. All things considered, I think both oil and gasoline are very inexpensive today, compared to incomes and cost back then.
 
Originally Posted By: Bluestream
Originally Posted By: KrisZ
You guys in US have no idea what high priced oil is.


Not this again...look around you there are lots of cheap oils to be had. Dont walk into Canadian Tire and expect to find Mobil 1 for $2.99!

Agreed. Ironically, I purchase Delvac 1 here in Canada, and I get it significantly cheaper than many of our American friends do down south. Of course, we'll never get some of their five quarts and a filter for next to nothing deals, but I digress.
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I have yet to see something in retail go down in price.. with the exception of "roll back" or sale prices.
 
Originally Posted By: Bluestream
Originally Posted By: KrisZ
You guys in US have no idea what high priced oil is.


Not this again...look around you there are lots of cheap oils to be had. Dont walk into Canadian Tire and expect to find Mobil 1 for $2.99!


Yeah, you can find it cheaper (still more expensive than US), but you have to go around chasing deals. If you buy anything at full price you get ****ed.
 
Originally Posted By: camrydriver111
Originally Posted By: Bluestream
Originally Posted By: KrisZ
You guys in US have no idea what high priced oil is.


Not this again...look around you there are lots of cheap oils to be had. Dont walk into Canadian Tire and expect to find Mobil 1 for $2.99!


Yeah, you can find it cheaper (still more expensive than US), but you have to go around chasing deals. If you buy anything at full price you get ****ed.


From what I have seen in the retail business, well over 50% of (US) shoppers don't care on the price they pay. Best example being half gallons of milk on sale for say $1. Yet people will buy whole gallons at say $3.50 each.

*Perhaps Canadians are the same way?
 
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Originally Posted By: dlundblad
From what I have seen in the retail business, well over 50% of (US) shoppers don't care on the price they pay. Best example being half gallons of milk on sale for say $1. Yet people will buy whole gallons at say $3.50 each.

*Perhaps Canadians are the same way?


I'm sure there are people like that, but at the same time lots of people take a trip across the border to do their shopping. For automotive things the price discrepancy is very high.

I live in a border city and if you pay the full prices here instead of going to the US you would be considered a less savvy shopper by many.

Next time I need an oil change I will be buying Mobil 1 0W40 in the US, unless it goes on sale here by 40% or more (I doubt it)
 
In 40 years, gas has gone from 35¢ per gallon to $3.50 a 10x increase for essentially the same quality product...while oil's MSRP for much higher quality dino has gone from $2 to $3 (in 5 qt jugs).
 
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One thing you missed in your analysis, FutureDoc. How a lion's share of that fuel tax money collected for infrastructure makes it to things like Tea Pot Museums in S. Carolina and studies like why monkeys have excreta fights with each other at the zoo and such.

And how it is, that in 1943, we built the entire Alaska Canada highway, thru the wilderness, all 1500 miles, in 18 months using 1930's technology. Or how we built all 111 stories of the Empire State Building in 411 days in 1932 using 1920's technology.

Yet today, it takes a road crew more than a year to complete a new road junction on a freeway, that is, if they really put a wiggle in it and try to get it done. Or two years just to redo two 200 foot bridges on I-29 in Iowa as an example. And it took over 7 years to add one more lane on each side to a 6 mile stretch of I-80 thru Iowa City. And they still aren't done redoing a simple road junction improvement of I-80 and Hwy 65 in Altoona, Iowa that they started 4 years ago. The fraud and waste is criminal. And there is enough greasing on the skids and money flowing everywhere but into actual road building and repair. If we did things in the 1940's the way they get done now, we would have lost WW II spectacularly.

It is one thing to think the government is doing such great things, it is quite another to see what they are actually doing. The government, in just about everything it puts its hands on, would screw up a wet dream if it could.
 
Originally Posted By: camrydriver111
Originally Posted By: dlundblad
From what I have seen in the retail business, well over 50% of (US) shoppers don't care on the price they pay. Best example being half gallons of milk on sale for say $1. Yet people will buy whole gallons at say $3.50 each.

*Perhaps Canadians are the same way?


I'm sure there are people like that, but at the same time lots of people take a trip across the border to do their shopping. For automotive things the price discrepancy is very high.

I live in a border city and if you pay the full prices here instead of going to the US you would be considered a less savvy shopper by many.

Next time I need an oil change I will be buying Mobil 1 0W40 in the US, unless it goes on sale here by 40% or more (I doubt it)


Sure, you can buy Mobil 1 0W40 for $9.19 QT at Advance auto or Auto zone. Then pay currency exchange and your up to $10.94 plus local sales tax, maybe $11.60. Then cross the border and wait in line and pay your $4.00 toll. Then on your return, you can lie to the border guards, or you pay sales tax coming back in. At this point you are over the local full price at CT, not to mention your US quart is 5% less volume than the CT Liter bottle. Yup, you got it all figured out...

BTW, Mobil 1 was just on sale at CT for $28 a jug...
 
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when the prices go up on oil the sales go down look at motorcraft when the price was reasonable it sold very fast now it sells but not nearly like it did.
same with mobil 5000 5qt. jugs when it is $12.72 they can't keep it on the shelves in wal mart but when it goes up to $15.00 it sits longer. I heard this from a manager in Walmart
 
TiredTrucker: I generally agree with your comments, but keep in mind that 30 people died during construction of the Alcan and 5 died to put up the Empire State Building. In addition, the Alcan used a lot of military labor and the Empire State Building used almost exclusively "foreign labor" - european immigrants and Canadian Mohawks. Many things have changed since then.
 
I'm so tired of the government bashing. Public and private sectors are both influenced by one element: human behavior.

I like clean air, reduced public health expenses because fewer people are breathing particulates, and a government that can design and build a bridge within 14 months after one tragically collapses, like the one about a mile from where I am right now.

Talk to someone from a country with no functioning government. Things here might seem better by comparison.
 
Originally Posted By: Bluestream
Originally Posted By: camrydriver111
Originally Posted By: dlundblad
From what I have seen in the retail business, well over 50% of (US) shoppers don't care on the price they pay. Best example being half gallons of milk on sale for say $1. Yet people will buy whole gallons at say $3.50 each.

*Perhaps Canadians are the same way?


I'm sure there are people like that, but at the same time lots of people take a trip across the border to do their shopping. For automotive things the price discrepancy is very high.

I live in a border city and if you pay the full prices here instead of going to the US you would be considered a less savvy shopper by many.

Next time I need an oil change I will be buying Mobil 1 0W40 in the US, unless it goes on sale here by 40% or more (I doubt it)


Sure, you can buy Mobil 1 0W40 for $9.19 QT at Advance auto or Auto zone. Then pay currency exchange and your up to $10.94 plus local sales tax, maybe $11.60. Then cross the border and wait in line and pay your $4.00 toll. Then on your return, you can lie to the border guards, or you pay sales tax coming back in. At this point you are over the local full price at CT, not to mention your US quart is 5% less volume than the CT Liter bottle. Yup, you got it all figured out...

BTW, Mobil 1 was just on sale at CT for $28 a jug...


Ouch. I had no idea they have a fee for sales tax on stuff coming into Canada.
 
Originally Posted By: dlundblad
Originally Posted By: Bluestream
Originally Posted By: camrydriver111
Originally Posted By: dlundblad
From what I have seen in the retail business, well over 50% of (US) shoppers don't care on the price they pay. Best example being half gallons of milk on sale for say $1. Yet people will buy whole gallons at say $3.50 each.

*Perhaps Canadians are the same way?


I'm sure there are people like that, but at the same time lots of people take a trip across the border to do their shopping. For automotive things the price discrepancy is very high.

I live in a border city and if you pay the full prices here instead of going to the US you would be considered a less savvy shopper by many.

Next time I need an oil change I will be buying Mobil 1 0W40 in the US, unless it goes on sale here by 40% or more (I doubt it)


Sure, you can buy Mobil 1 0W40 for $9.19 QT at Advance auto or Auto zone. Then pay currency exchange and your up to $10.94 plus local sales tax, maybe $11.60. Then cross the border and wait in line and pay your $4.00 toll. Then on your return, you can lie to the border guards, or you pay sales tax coming back in. At this point you are over the local full price at CT, not to mention your US quart is 5% less volume than the CT Liter bottle. Yup, you got it all figured out...

BTW, Mobil 1 was just on sale at CT for $28 a jug...


Ouch. I had no idea they have a fee for sales tax on stuff coming into Canada.


You do pay sales tax, it depends on the value of the goods, and how long you've been away. I'm not sure they would charge you tax on a $25 liter jug of oil. Either way I wouldn't declare it.

Of course I won't cross the border just to buy oil, but if I am there for another reason might as well buy oil and fill up the tank as well.
 
Originally Posted By: dlundblad
*Perhaps Canadians are the same way?

Maybe, but the more likely case is that Walmart Canada and Canadian tire have us trained like seals to wait for their oil specials. Just about any random parts store, and even grocery stores, beat Walmart and CT regular prices.
 
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