More on gas prices...

[jetflyer]

MJG,

Great point. I'm watching "24" this year and think the writers believe what some conspiracy theorists believe. Actually MJG, the president on "24" was going to allow the terrorist attack to justify American's presence in the Middle East, not Russia.

There are conspiracy theorists out there that say that Bush and Cheney with help from high ups in the FBI and CIA knew about the 9/11 attack beforehand and "ALLOWED" 9/11 to occur so we could "JUSTIFY" our presence in the middle east to "SECURE" the oil for decades to come, especially as Peak Oil is hit.

Jet

 

[LarryinTN]

This equates to an extra $800 per year for me and my wife to go to work in the morning.

You burn 10½ gallons of gasoline per day? That's nuts. How long are your commutes, what type of cars do you drive?

 

[LarryinTN]

Some interesting facts regarding the oil industry...

The oil industry has a profit margin of about 3% on gasoline sales. i.e. You pay $10.00 at the pump and they make about 30¢ profit.

The oil industries overall profit margin is about double that for gasoline at around 7%. i.e. They sell $100 in petroleum products and they earn about $7 profit.

Coca-Cola earns a profit margin of over 20%.

 

[Ill Mitch]

You burn 10½ gallons of gasoline per day? That's nuts. How long are your commutes, what type of cars do you drive?

I did the math quicklike with my cell phone. But we burn though about 5.5 gallons per day. The current price over here is $3.10 per gallon.
We both drive little 4 bangers that get 30MPG. We used own a big ol' Trooper, but got rid of that once gas started going up.

HA HA..I transposed a number somewhere...the increase is about $300 per year. It is still not chump change considering that the hike in my expenses happen in a two day period.

But I drive more than the most commuters. 80 miles per day. Let's cut it in half and do some huge averaging here. Figure $150 per year is the increase, 200 million drivers (like the original poster said). It is about 30 billion that is being taking out of the economy and burned away in exhaust fumes.

 

[LarryinTN]

Your $300/yr is $25 per month. That is not a budget buster.

$150/yr is $2.88 per day and that's still driving more than average.

It may look scary on the signs but it really isn't that much more.

 

[jetflyer]

LJ,

I agree it's more just "Scary" or fear from looking at the signs.

It's a psychological level people will have to get used to.

Then again if you take a couple hundred from every American in the country, like Mitch is saying, that adds up. This will definitely affect the discretionary income of Americans and especially the poor. Places like the "Dollar Store" and "beer" and "cigarette" companies will be hit the hardest

Plus people the last couple years were cashing out the equity in their homes like an ATM. That is stopping, plus people with ARM loans on their HOMES are about to see in the next year to two years, their loan payments adjusted upwards several hundred dollars.

I predict the economy to begin slowing sooner and more than the Federal Reserve and Ben Bernanke would like.

Jet

 

[TrafficInSight]

When gas was at $2.50 I paid 150$ a month for gas. This was about 2 months ago. Now that it's $3.15 I'm paying 190$ a month.

Great.... only a 40$ a month increase....

Of course now everyone talks about $2.50 gas like it's always been that way. I think that the constant rise and fall of gas prices is a psychological thing designed to get us conditioned to higher prices. It went from $1.50 to $3.15 in the course of a year which is a $100 a month increase. I'm finishing college in one of the most expensive areas in the entire freaking universe so things are already razor thin.

Care to guess how much my pay has gone up?

 

[Smacktard]

In "Celebration" of oil hitting $75 today, I decided to make a bunch of gross assumptions and see how much the oil companies might profit related to our price increases. Here's a simple calc (USA only, sorry Euros!):

Let's assume:
-200 million people drive per day
-Each drives 30 miles/day
-Each averages 20 mpg, giving about 1.5 gals burned per person per day

-This gives 300 million gals of gas burned every day in the US

Assume a $1 increase in the per gallon cost (we should be so lucky!)

-This would give a $300 million per day INCREASE in revenues.
-This is about $110 billion/yr INCREASE for the US oil industry.

There's a lot of money out there in the oil industry!! I've made a lot of big assumptions, but the point is to put the cost increases in perspective. Do you think most of this increased cash is going to operations? Is it profit? Where is it going?

Oh no, another lame response to 'The Evil Oil Industry'. Instead of repeating the incorrect emotional blathering you hear on the boob-tube, why not just dig a little to see what is really going on? Profit margins for Big Oil are less than most other industries, somewhere in the neighborhood of 8.5%. For those that don't understand that, for every dollar Big Oil spends to produce, they make about $0.08 cents. Or, for each gallon about $0.20 cents. Banks, tech industries are about double that, are they making excess profits too? You're just confused because the dollar amounts are so huge. Also take a look at the government's take, it's more than double what the oil industry makes. And note the key word there, makes, the goverment doesn't have to invest, produce, hire, create, manufacturer the gas/oil, they just reach in for the 'free' money. Here are a few links to get you on your way...

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702399.html


http://txfx.net/2005/10/30/mommy-what-is-a-profit-margin/


http://moneycentral.msn.com/investor...ins&Symbol=XOM

 

[AeroBoy]

Some interesting facts regarding the oil industry...

The oil industry has a profit margin of about 3% on gasoline sales. i.e. You pay $10.00 at the pump and they make about 30¢ profit.

The oil industries overall profit margin is about double that for gasoline at around 7%. i.e. They sell $100 in petroleum products and they earn about $7 profit.

Coca-Cola earns a profit margin of over 20%.

While this might be true, I can choose tap water (free) over a $1.50 Coke because buying a soft drink is optional. However, if I want to commute to work (and thus earn an income) I MUST purchase gasoline for my car. Like everyone else, I don't have any alternative. I can choose only to buy from one station or another station at pretty much the same price (give or take a few pennies per gallon). And at least Coke goes on sale at the grocery store every other week. I can't remember a gas station having a sale on gasoline, notwithstanding the PR radio gimmicks where they sell gas at the station's radio frequency for an hour or two. So comparing profit margins of a monopolistic industry with one that isn't doesn't wash--it's comparing apples with oranges.

 

[AeroBoy]

Also take a look at the government's take, it's more than double what the oil industry makes. And note the key word there, makes, the goverment doesn't have to invest, produce, hire, create, manufacturer the gas/oil, they just reach in for the 'free' money.http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=ProfitMargins&Symbol=XOM

The auto fuel taxes are collected for upkeep of the road infrastructure. The roads weren't paved, nor were the bridges and overpasses built, for free. And they need to be maintained, which costs lots of money. I am more than happy to pay the fuel taxes as long as the road are in good shape (i.e. no potholes that will swallow up my car). So it's not "free" money. If you're looking for free money, I suggest you contact Halliburton and ask how you too can get no-bid government contracts.

 

[Smacktard]

The auto fuel taxes are collected for upkeep of the road infrastructure. The roads weren't paved, nor were the bridges and overpasses built, for free. And they need to be maintained, which costs lots of money. I am more than happy to pay the fuel taxes as long as the road are in good shape (i.e. no potholes that will swallow up my car). So it's not "free" money. If you're looking for free money, I suggest you contact Halliburton and ask how you too can get no-bid government contracts.

So with gas prices higher this summer than any previous summer, what happened to the roads in the last year to require such additional expenditure? The gubment is still getting a higher share with increased prices than the oil companies WHO PRODUCED THE PRODUCT!

 

[Smacktard]

While this might be true, I can choose tap water (free) over a $1.50 Coke because buying a soft drink is optional. However, if I want to commute to work (and thus earn an income) I MUST purchase gasoline for my car. Like everyone else, I don't have any alternative. I can choose only to buy from one station or another station at pretty much the same price (give or take a few pennies per gallon). And at least Coke goes on sale at the grocery store every other week. I can't remember a gas station having a sale on gasoline, notwithstanding the PR radio gimmicks where they sell gas at the station's radio frequency for an hour or two. So comparing profit margins of a monopolistic industry with one that isn't doesn't wash--it's comparing apples with oranges.

Monopolistic industry? Nothing could be further from the truth, the oil industry is one of the most competitive. And there are many things you can do to reduce your consumption, but arguing that you MUST buy gas is no reason for having lower prices. I assume your position is something to the effect of 'the government should take over the oil industry because we need gas'. No thanks.

 

[AeroBoy]

So with gas prices higher this summer than any previous summer, what happened to the roads in the last year to require such additional expenditure? The gubment is still getting a higher share with increased prices than the oil companies WHO PRODUCED THE PRODUCT!

Fuel taxes are based on a set amount per gallon--not a percentage of the sales price (see http://www.taxadmin.org/fta/rate/motor_fl.html). That would mean the taxes collected per gallon of gas is the same whether fuel is $1 a gallon or $5 a gallon. In fact, as fuel prices go up, the government (state and federal alike) actually gets LESS money as a percentage of the sale. And if you think these taxes are too high, you need to go to European countries and see the fuel taxes they impose.

 

[Smacktard]

Fuel taxes are based on a set amount per gallon--not a percentage of the sales price (see http://www.taxadmin.org/fta/rate/motor_fl.html). That would mean the taxes collected per gallon of gas is the same whether fuel is $1 a gallon or $5 a gallon. In fact, as fuel prices go up, the government (state and federal alike) actually gets LESS money as a percentage of the sale. And if you think these taxes are too high, you need to go to European countries and see the fuel taxes they impose.

True, not at the pump, however, they are adjusted quarterly on wholesale price, so as that price is increasing, so too are the taxes...

"Tax rate is based on the average wholesale price and is adjusted quarterly"

 

[AeroBoy]

Monopolistic industry? Nothing could be further from the truth, the oil industry is one of the most competitive.

WTF is OPEC then? Answer: a monopoly that sets the price of oil by controlling supply. The rest of the oil producing companies just go along for the ride and sell oil at the same price.

And there are many things you can do to reduce your consumption, but arguing that you MUST buy gas is no reason for having lower prices.

I never said that prices should be lowered because I must buy fuel. I was trying to make the point that buying Coke is optional, whereas buying fuel is not if I want to continue to earn an income. And I do everything I can to reduce fuel consumption--I find it amazing that I still get about 29 mpg (mix of city and highway) with my nearly 12-year-old car. Things would be a lot better if everyone drove cars that get at least 25 mpg--that would lower demand for fuel, which would in turn help lower the price per gallon.

I assume your position is something to the effect of 'the government should take over the oil industry because we need gas'. No thanks.

You know what happens when you ass-u-me. I never said that the government should regulate the oil industry. I'd appreciate if you would not put words in my mouth--or any of your appendiges for that matter.

 

[big_al]

Monopolistic industry? Nothing could be further from the truth, the oil industry is one of the most competitive. And there are many things you can do to reduce your consumption, but arguing that you MUST buy gas is no reason for having lower prices. I assume your position is something to the effect of 'the government should take over the oil industry because we need gas'. No thanks.

please please please please please tell me that you are not serious

 

[big_al]

So with gas prices higher this summer than any previous summer, what happened to the roads in the last year to require such additional expenditure? The gubment is still getting a higher share with increased prices than the oil companies WHO PRODUCED THE PRODUCT!

the infastructure has been lacking in funding for decades. transportation budgets have been cut and turned to private industry to repair and construct the roads. the funding for highways depends per state, but it usually goes to a trust fund, just like social security. the problem is politicans have been forced to use that trust fund, just like ss, to fund other projects. this has happened because of the decline in industry and wages and the decline of tax on corporations and the super rich.

And how are oil companies getting a lower share of the profits? do you have anything even remotely considered evidence? Oh wait, what am I saying, here we have somebody who doesn't understand the whole concept of a cartel and its monopoly grip

 

[big_al]

Oh no, another lame response to 'The Evil Oil Industry'. Instead of repeating the incorrect emotional blathering you hear on the boob-tube, why not just dig a little to see what is really going on? Profit margins for Big Oil are less than most other industries, somewhere in the neighborhood of 8.5%. For those that don't understand that, for every dollar Big Oil spends to produce, they make about $0.08 cents. Or, for each gallon about $0.20 cents. Banks, tech industries are about double that, are they making excess profits too? You're just confused because the dollar amounts are so huge. Also take a look at the government's take, it's more than double what the oil industry makes. And note the key word there, makes, the goverment doesn't have to invest, produce, hire, create, manufacturer the gas/oil, they just reach in for the 'free' money. Here are a few links to get you on your way...

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702399.html


http://txfx.net/2005/10/30/mommy-what-is-a-profit-margin/


http://moneycentral.msn.com/investor...ins&Symbol=XOM

actually profit margins are above 10%, but that isn't the argument. only a simpleton would fall for that.

the investment and banking industries are a major problem, but people dont hear it on the news so they don't grasp the situation. An oil company that makes a 10%+ profit margin to the tune of RECORD profits is using the still legal accounting tricks including claiming a loss on salary and bonuses paid to executives, including the 400 million given to the departing exxon/mobile CEO. Also, they tie up their would-be profits in new reserach and construction, again making profit margins appear less than they should be.

An industry like credit or banking does not have the high costs of oil exploration, transport, etc so what they make all needs to be counted as profits to be legal.

Please stop talking about something you do not grasp in even a high school level.

Oil companies are profiteering just like defense contractors and banking industries are. they get up infront of congress and whine and lobby for more tax breaks and then turn around and raise prices while posting record profit with no "supply and demand" curve to justify it? that is called PRICE FIXING and it is illegal. Look it up sometime, Einstein.

 

[big_al]

Some interesting facts regarding the oil industry...

The oil industry has a profit margin of about 3% on gasoline sales. i.e. You pay $10.00 at the pump and they make about 30¢ profit.

The oil industries overall profit margin is about double that for gasoline at around 7%. i.e. They sell $100 in petroleum products and they earn about $7 profit.

Coca-Cola earns a profit margin of over 20%.

your profit margins are wrong and nobody is more heavily subsidized like the oil industry.

 

[jetflyer]

OIL Supply is flat year over year for many reasons, one being approaching Peak Oil and then Nigeria, Gulf of Mexico, etc.

Demand is still rising.

Price has gone up to make sure there is no LACK OF SUPPLY. It's that simple.

No one is gouging.

There are also worries of supply disruptions like the coming war with Iran. The price of gas is where it should be.

There never will be a lack of supply. When oil passes peak and goes we use say 80 million barrels a day as a world instead of 84 million barrels a day, the price will be probably around $6.00/gallon and only people that can buy gas at $6.00/gallon will buy gas.

Simple supply and demand.

The oil companies are only guilty of one thing: Not fessing up that there is a serious supply problem developing so they can profit 10X more than they are now in a couple years. Their profits are only going to get higher after peak oil occurs.

Jet