More on gas prices...

[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

 

[jetflyer]

From http://www.theoildrum.com/story/2006/4/26/121441/891#more which is my favorite blog talking about why oil prices are high (It's not the Oil Companies!):

The major factor that determines gas prices is the price of crude oil from which gasoline is derived. When crude oil prices are high, so are gas prices. The following are just a few factors that affect the price of a barrel of oil:

1. Oil companies do not single-handedly determine the price of oil. The price of oil is set on the crude oil futures market. Simply put, these prices are affected by supply and demand because, at present, oil trades in a global commodity market where increased demand or reduced supply in one place instantly translates into price shifts everywhere. A variety of publicly available information sources show that supply is relatively static at the moment, while world demand continues to grow as economies grow.
2. We have provided evidence many times at The Oil Drum that the output of major oilfields is declining and that we may now have reached a peak or plateau in global oil supply. Oil companies have not been able to increase production for a number of years, and it is unclear that OPEC is accurately reporting their reserves. Even if there were significant sources of high quality oil remaining, it is getting increasingly difficult and expensive to drill. These factors, along with aging infrastructure for oil exploration and a retiring workforce are also contributing to high oil prices.
3. The geopolitical situation is volatile, and an astute citizen may notice that every time there is news from Nigeria or Iran, the price of oil goes up because of the potential and real effects of these situations on world oil supply. Again, oil traders are fearful that the supply will not remain stable forever.
4. Countries like China and India are industrializing at a great pace, and while we are accustomed to obtaining oil at a comfortable quantity and price, it will be impossible (and immoral) to deny similar resources to these countries. China is working furiously to secure new oil supplies, and they're content to negotiate with countries we're reluctant to deal with, like Iran and the Sudan.

Everyone thinks it's the EEEEEVILLLLL Oil companies. A reality check is needed badly in America. We all including our politicians and many members of this board are S.O.S. (Stuck on Stupid). We need to wake up.

Jet

 

[jetflyer]

I have to post what came next in that link. They are sending this piece of work which includes the above quote and the one below and more to our politicians. Here are recommendations to our IDIOTIC leaders:

These points demonstrate that disruptions in the supply of oil that affect the price of gasoline at the pump are not just a temporary glitch. For various reasons--decreased discoveries of new oilfields, geopolitical instability, international competition for oil supply--we can no longer assume that we will be able to consume as much oil as possible, or ever get it again for $1.50 a gallon.

Demagoguery and grandstanding are not strategies for addressing our energy problems. As an alternative, the editors of The Oil Drum put forth the following recommendations:

1. It is nonsensical for political leaders of both parties to eliminate the gas tax temporarily or permanently as this will only worsen our dependence on oil by disincentivizing the innovation of oil alternatives and oil conservation efforts.
2. Both mainstream American political parties are doing their country a disservice by accusing convenient scapegoats of price gouging or price fixing instead of educating the public about how the price of gas is actually set.
3. Right now, governments should be focused on helping us cure our "addiction to oil." The answer does not lie in lowering gas prices, which will only encourage people to drive more and further waste our valuable resources. As the Department of Energy funded Hirsch Report on Peak Oil laid out, the consequences of not taking steps to transition away from oil could be dramatic to our economic system. Appropriate solutions include large-scale research, development, and implementation programs to improve the scalability of alternative sources of energy, other projects geared towards improving mass transit and carpooling programs across the country, providing incentives to buy smaller and more fuel efficient vehicles, and promoting a campaign to increase awareness about conservation.

The political discourse on this topic is simply so devoid of fact, and constructive discourse so buried and out of the mainstream, that we felt we needed to raise a voice of reason. Public officials will continue to misinform and obfuscate if we allow it. The only solution is to educate the public about the most important problem we face as a generation. We, the citizens of the US and the world, must move our attention to this the issue of energy more than any other. We must hold our representative governments accountable for having an open and honest debate on the subject.
Simply put, we must learn more about where our energy comes from.

If you haven't read the Hirsch Report on Peak Oil (linked above) which is a Department of Energy Work, I advise you to read it and learn how much trouble we're in with oil. These prices are very low compared to what we're going to see soon. You guys are going to be bitching 5x more about oil company profits when their profits are 5x today's.

Jet

 

[big_al]

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

SIMPLE supply and demand? Demand has not gone up in tune with the price. the oil companies and investors have profited off the scare tactics used, and the lack of the government getting involved in bringing our dependence off oil is not helping. by crying that these poor oil companies have done nothing wrong, you are evading history and common sense. You are also relying on government and energy related articles to guide your opinion of what is correct. Guess what? when the government looks to energy companies only when drafting policy, and gives massive tax breaks to energy companies, and said energy companies make record profits, you have to ask yourself, why the tax breaks? why the cheap loans from the exim bank? Why the unprecented access to public land in the US and abroad? why the outrageous deals with oil producting 3rd world nations? why the cutback on oil drilling in the US?

if you dont see price gouging by the handful of powerful oil companies, I have a bridge to sell ya, and then I'll ask you how much you charge to be on their payroll. corporate appologists are destroying this world one share at a time

 

[big_al]

If you haven't read the Hirsch Report on Peak Oil which is a Department of Energy Work, I advise you to read it and learn how much trouble we're in with oil. These prices are very low compared to what we're going to see soon. You guys are going to be bitching 5x more about oil company profits when their profits are 5x today's.

Jet

incorrect. the higher oil prices go, the less people will be able to afford them, and the worse the overall economy will become. it will be THE number one cause of another economic collapse. and the government has always been hand in hand with these wreckless corporations. Americas positioning since WWII by stopping the Nazis from controlling the vast oil fields of the caspian area and the middle east, and by being in bed with corrupt terrorist supporting arab nations, is coming to an end. because of the lack of desire to think into the future, the government is responsible for the economic collapse that is coming. Your appologist nonsense excusing these wreckless actions and incorrect assumptions about a free market and supply and demand only make things worse

 

[big_al]

and there is no supply problem, there is a supply scare. there are worries by investors who dont have a clue about anything, and are blind reactionists to world events, even ones that make little difference. the cost of production has not gone up, the demand has not risen to outrageous levels, the only problem are investors and oil companies themselves