"dave weil" wrote in message
...
On Fri, 12 Dec 2003 10:31:02 -0800, "Michael McKelvy"
wrote:

Translation, the Dems have nothing so they dig for dirt.
The price they are charging for gas is hardly unreasonable given the
cost of
security. You lefty's do understand there are people shooting over
there,
right?

You obviously haven't been reading the coverage. Neither you nor
Sandman seem to realize that this wasn't an instance of Kellogg et.al.
gouging but *being* gouged by the Kuwaitis. They were charging almost
twice as much Turkish distributors. I don't see where there's a
substantial difference in securing oil from Kuwait versus Turkey. In
fact, one would think that delivering and securing Kuwaiti gas would
be cheaper than from Turkey. In fact, KBR claim that they make the
same amount of money (a "few" cents) from either source. So, the cost
of security of the shipments isn't the issue in this case. It's a
procurement issue. KBR claims that this supplier was the only one of
four Kuwaiti distributors that met the terms of the contract with DOD.
Yet, that doesn't explain why they couldn't continue to rely on $1.18
a gallon gas from Turkish sources, or require the distributors from
Kuwait to drop their prices from the $2.27 price and/or meet the Core
of Engineers standards of the contract.

It's sounding more and more like a sweetheart deal with the Kuwaitis.

Sounds like a "spot" market purchase with expedited delivery requirement.
Call any supplier with unforecasted/new requirements and request
immediate delivery and see what you have to pay to get it.
You pointed out that of the 4 major gas distributors
in Kuwait only 1 could meet terms of the contract. This clearly
indicates contractual requirements above normal market.
The most obvious circumstance that comes to mind is short lead time.
What would your restaurant pay for steaks delivered tomorrow if your
current supplier suddenly couldn't deliver? You would pay whatever
it takes to prevent customer dissatisfaction and fill that short term
demand.

Recall a few months back when one of the big complaints about the post
war
administration of Iraq was a fuel shortage which was aggravating the
Iraqi's.
They were scrambling to get gas to the country ASAP.
Obviously that kind of demand can't be satisified at market prices.

This is going to turn into another example of New York Times tabloid
jouralism
and nothing more.

ScottW