OldManOnFire

California, where I live, consumes about 16 billion gallons per year and the crude comes from within-state oil wells (40%), Alaska (21%) and foreign sources (39%).

California gasoline must meet stringent air quality requirements to burn cleanly to protect public health and the environment so our cost is a little more than other states.

There are four main areas associated with the costs of gasoline; Crude oil cost, taxes, refinery costs and profit margin, and dealer costs and profit margin.

Crude oil cost is about $119/barrel divided by 42 gallons per barrel so crude cost per gallon of gasoline is about $2.83.

Taxes for gasoline in California are: 18.4 cents/gallon for federal excise taxes; 18 cents/gallon for state excise taxes; and local and state sales taxes. Sales taxes vary depending on county and city but average about 8%, which might be 24 cents/gallon. So taxes are 18.4 plus 18.0 plus 24.0 equals approximately $.60 per gallon.

If we add $2.83 (crude cost) with $.60 (taxes) we're already at $3.43 per gallon!!

It's anyone's guess how much the refineries and dealers might make per gallon but we do know today they are sharing about $4 retail price minus $3.43 above equals $.57 going between the refineries and dealers. In our local paper last week, it was stated that local gas stations were making about 60% profit on food and junk items and 30% of their profit from gasoline sales.

If crude oil goes to $125 barrel this equates to $4.15/gallon of gas.
If crude oil goes to $150 barrel this equates to $4.74/gallon of gas.
If crude oil goes to $200 barrel this equates to $5.93/gallon of gas.

These prices are for 87 octane and extra premiums are paid for higher octane's and diesel fuels.

So, for every $10 increase we see in a barrel of crude oil, we will see approximately a $.25 increase per gallon at the gas pump!

Bend over folks...assume the position...and until we take action to reduce our dependence on oil products, we're screwed...

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Kanadesaga

because the whores in Washington let them charge that much.

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Free all Political prisoners. Now.

OldManOnFire

US petroleum consumption is 20.6 million barrels per day.

US crude oil production is about 5.1 million barrels per day of which the US 'exports' about 1.3 million barrels per day, which leaves 20.6 consumption minus 3.8 produced equals approximately 16.8 million barrels per day of crude that is IMPORTED into the USA.

Top importers by rank are; OPEC at 5.4 million barrels per day, Canada at 1.9 million barrels per day, and Mexico at 1.4 million barrels per day, along with about 30 other nations supplying miscellaneous quantities.

So...it's not really about those whores in Washington, it's about importing 16.8 million barrels of oil every stinkin day. It's about the supply and demand in the world markets. It's about OPEC, and China, and India and in a free and open market system, where supply and demand rule, the US is at the mercy of growing world trends in demand based against a somewhat static supply.

If anyone are whores, it's all of us people, who are spoiled rotten with our dependence on oil. We're all oil-whores and the sooner we realize this, and take action to reduce our dependence on the stuff, the sooner we can actually take control of our destiny. Until then we are at the mercy of others and this is not a good situation...

__________________
Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

Kanadesaga

No, it is the whores in Washington. If they had a backbone in 1973 they would have forced alternate fuels back then. Instead they let the oil companies have their way. they would have forced more refineries to be built. they wouldn't have given them billions in tax cuts while they were making the biggest profits in the history of the world. Had these things been done, we could have told the Middle East to go fuck themselves.






Sure we all could have gone back to horse drawn carriages. what alternative was offered to the american people after 1973? the Pinto.

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Free all Political prisoners. Now.

Ptech

Gas costs so much because it is an international commodity and a dollar is not worth the paper it's printed on.

Consider this: back in the 60's gas was about 25 cents a gallon. In about 1973 they stopped making silver coins.

Today an old silver quarter is worth about $3.50 for the silver value. And, that will buy 1 gallon of gas, or 1 gallon of milk or loaf of bread.

Of course the government tells us that inflation is under control...

OldManOnFire

I believe in this fact: that corporations DO NOT pay taxes...people do.

In the oil industry, of which it's by-products are required by most of us, it makes no difference if their tax rates average 12% or 43%, for all the costs plus some profit margin will be passed onto the consumers. It's just a matter of how the accounting will look.

In looking at some data from 2005, on Conoco-Phillips, Chevron, and Exxon-Mobil, they had combined income (before taxes) of $108 billion, corporate income tax of $44 billion, net income of $64 billion, with an effective average tax rate of 41%. In addition to corporate income taxes, these same companies paid over $114.5 billion in other taxes including franchise, payroll, property, severance and excise taxes. Now if I'm not mistaken, I believe the average tax rate for all business is approximately 32%. So, these companies, at least based on the above data, are paying their fair share of taxes--agree?

The issue with tax breaks or subsidies or credits or whatever one wishes to call them amount to about $7.6 billion in actual tax breaks and $6.3 billion in royalties or $14 billion total. If US production is about 5 million barrels a day, which equates to 210 million gallons per day, or about 77 billion gallons per year, and if you removed the $14 billion in breaks and royalties, or in essence passed the $14 billion onto the consumers, this would reduce each gallon of gasoline by a whopping $.18 or 18 cents. So when we are looking at gas prices rising $1 and $2 from a year ago, only 18 cents in the price of a gallon of gas can be attributed to the tax credits and royalties...it's meaningful but not the main culprit.

In the last six years, US consumption has increased over 1 million barrels per day, or 42 million gallons per day, or 15.3 billion gallons per year!! In these same six years the price per barrel has gone from $20 to $120! If you can allow a US business in an unregulated industry to earn 10% net profit, and knowing that sales have increased by 1 million barrels per day, then it's quite easy to rationalize that net profits on $120 per barrel oil will be much greater than on $20 barrel oil...and hence the added profits we are seeing. This now becomes a psychological or philosophical discussion in which most people will fixate on the Billion$ in net profits instead of the achieved or perfectly acceptable 10% net profit margin.

So now what to do? In a free and open market system which is not regulated, the government cannot dictate how much profit a business realizes--right? A government can apply a windfall tax to certain profits (ironically for running a smart and successful business) over some imaginary number. In the example above of those three companies, on $108 billion in income, let's assume they had $10 billion in net profits that year, so how much do you penalize them? This cannot be answered...I don't believe?? Just pick a number out of our asses like if any company makes more than $5 billion in net profits they must pay a 10% or 20% penalty?? Or should it be over $1 billion or $50 billion?? I believe if a windfall tax is approached for the oil industry, or any industry, I'm guessing those companies will simply show expenses to offset profits that will always keep them under the windfall tax penalties.

The only other choice is to nationalize the oil industry...stop all privatized oil business...and let the government own and manage it. But even this, in the world frenzy of less supply and ever-growing demand, will not stop the increase in prices. Further, once you let the government take over, and those idiots learn to do math, and they realize the US consumption is about 307 billion gallons per year, they will quickly learn that every time they increase gasoline by 10 cents, they earn another $30 billion for their coffers.

I'd say when the US only produces 5 million barrels per day and imports 15 million barrels a day that the US is in no position to tell anyone to go fuck themselves.

30 years ago we didn't have half the gas crisis we have today, and if today's crisis is not enough to make the citizens or government change course, then how could we expect them to do this back in the 70's?

Since the 70's we have had lots of options but on average we chose instead to be arrogant, greedy, and self-serving; buying larger and more HP cars, moving tens of miles from where we work, refusing to take public transportation, refusing to car pool, refusing to limit our trips to the store and the mall, driving like drag-racers at 80mph instead of 55mph, and so on. Most of us have ignored the price of fuels and just continued down our path of consumption...

Sorry for the lengthy post.

__________________
Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

aloysious

Short answer: Because you are willing to pay it. Please look up "marginal utility".

OldManOnFire

Inflation has never been under any controls.

Nothing, from the price of goods and services, to our own wages, have ever decreased in price--it's been a steady increase.

World demand on those goods and services that are also used in the USA is forcing prices to escalate.

Our entire mentality in the USA is to have more...more...more and we have achieved this but it comes at a cost--inflation and lots of it.

Now we look in the mirrors and wonder what the hell to do about our crisis?? The answer is downsize, minimize, sacrifice, relocate if necessary, be fiscally responsible and try to avoid the chaos caused by the masses who are reluctant to change. National and world inflation is out of my control, but I do have 100% control about how I choose to live my life, and this is where we need to look to find a little more happiness in life...

__________________
Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

OldManOnFire

Yes...today I'm willing, or required to sustain my current lifestyle and business, to pay $4/gallon. And this willingness or requirement is different for all people. Those with less at an earlier point will decide it's more valuable in their lives to eat and pay rent than it is to buy $4 gasoline. In our monetary system, as we can no longer afford certain items, and our choices in life diminish to survival mode, and when enough people make similar choices, depending on controls and plan-B, life might be manageable or filled with chaos.

My point was to show that the price of gasoline is basically out of our control, therefore, as we must make choices, instead of sitting around complaining, or going deeper in debt, and hating life, this issue will be better dealt with if each person makes quick decisions about their fiscal choices and to modify their lives to minimize the affects of inflation...

__________________
Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

DRS112

Depends on how you measure it. By most accounts almost everything is cheaper today when you adjust for inflation.

Look at median wages in the 50's vs the average price of a car. The average cost of a car was the same as the median wage(roughly) today it's about half that.....and that holds true for virtually every other product.