If Words Could Talk

My Son’s a Gas

Dear Mom and Dad,

Sorry I haven’t written but it’s really been hectic since I was promoted to director of malfeasance marketing. The gasoline business is really all about highs and lows with very few lows and it’s been keeping me pumped up.

I know you like the play on words. Can’t lose our cents of humor can we?

You know we’ve shut down refineries every year for over 15 years without a noticeable squawk —at peak drive time in California, too. This has let us raise prices to an exorbitant level and when they do slowly drop—much more slowly than we raise them—we can come up with something new before they reach the previous low price, so we always have a nice price increase.

I really love this business. How many companies can raise prices overnight numerous times a year without any notice or pesky politicians raising a ruckus? It helps that we put a few bucks in the collection basket for Sacramento.

We have to thank our lucky Mars that no recall candidate has targeted us, but I guess they don’t fill their own gas tanks. We’ve been even luckier that the presidential hopefuls close their eyes to gas prices.

It’s grand that people think they can’t do anything about the price of gas.

The gas line rupture in Phoenix was fortuitous. Really played on the terrorist angle. Folks were so happy that it wasn’t terrorism they forgave us the inconvenience of raising Arizona prices to over $2, up from about $1.75. Prices actually hit over $3 at times!

Sending gas to Arizona was a win-win situation for us. Prices shot up in Arizona. Prices shot up in California. It was quite a celebration here!

And did we ever put a good face on our stroke of luck. Pictures of our trucks rushing through the night time desert and being met at the border by hoards of thirsty drivers honking their horns. Naturally, we only sent gas to the stations we owned, but the compassionate news coverage was priceless.

What did it take us—three weeks to fix the pipe? It was only a six-inch pipe. But, who can argue against public safety and our decision to build a seven-mile detour around the broken spot?

We’re so fortunate we don’t have a single pipeline coming into the Golden State. Otherwise, it might not be so golden for us if we could get oil and gas at the push of a button. Terrible thought.

Happy thought. We hit $2.14 a gallon back in March. That was only six months ago and no one remembers. Thankfully, Californians all have a touch of "short memory" when it comes to gas prices.

My boss congratulated me because we’ve had a great confluence of events as reported in the L.A. Times. Great word, confluence. Who knows what it means? Sounds like the sun, Earth and Mars lining up in a straight line. Sounds better than conspiracy doesn’t it?

What it means is a s-l-o-w down in production right before the big demand for Labor Day gas!

We haven’t built a new refinery in 30 years. Our 13 refineries have hidden behind the "special formula" gasoline to control production for quite a while. We would be in deep crude if anyone ever realized that with a little pre-planning and forecasting customer needs, we could have out-of-state refineries make a reserve supply for us.

I shudder to think that we could actually have reserves to cover a real emergency and stabilize prices. I’ve learned there’s absolutely no benefit for us to have a reserve or even to increase our production.

Do you remember how dismal things were in January 2002? We sold gas for about $1.15 a gallon. How were we able to do it?

We claimed repairs, maintenance, off-line, changeover formula, EPA restrictions and by summer (our magical time of year) we had jumped to $1.60. That really took effort and taught me a lot about how to pre-plan and forecast manipulation.

My hard work started to pay off this past January. Prices increased from $1.55 and peaked in March. We decided not to be timid and it paid off because when we did have to drop prices, we still bumped $1.70.

Much more satisfying than those sneaky penny increases that take way too long to reach the gouge level.

Well, have to go. I’m getting an award for the biggest weekly increase in four years—averaging about 18 cents! Almost hit my record of 23 cents set back in March of 1999. March is a lucky month for me.

Prices did hold up through Labor Day as I predicted. Isn’t it coincidental that after Labor Day, when the driving demand starts to drop off, the import supply starts to pick up, production starts to increase and prices start to drift down? Have to do something about that.

Love you both and keep the car plugged in.