What Gas Prices SHOULD be

[Wondering]

Heard this on two syndicated radio programs over the last two days; one was the Tom Martinko show, don't know where from. Both shows had "experts" from the energy industry that outlined why gas prices are so high. Both cited pricing data from the American Petroleum Institute that showed that if the price of a barrel of crude oil was trading at $95/barrel, THAT would equate to our current price of $3.00/gallon at the pump. They did take into account state and federal taxes in computing the pump price.

Their point: with oil futures at $72/barrel, we ARE getting GOUGED by the big oil companies; that it is no wonder that Exxon is posting record profits.

[rebs]

they got away with gouging 3.00 per gallon last summer and are going for 4.00 this summer and will go for 5.00 next summer. exxon ceo retired with over 400 million in retirement package and they are still posting record profits. we are not talking that this excess money is going for researce and development for new refineries or alternative fuel sources , it is profit going to owners and stock holders.........
we are being gouged folks

I wonder if this post will be nuked as my last one was ?

rebs
I stand corrected it is 400 million

[Lund 2025]

I think the retirement package was 400 million.

[jigman 2003]

Here's an interesting link:

http://money.cnn.com/pf/features/lists/global_gasprices/price.html

[bountyhunters]

as long as WE keep using it with no slow down ,it will keep going up .word is that last summer usage was up so they;'ll just keep raising the price ,it's that simple.

[Hollis ULed]

Ya know, I don't think it will matter much to most people after they get used to it (after an initial period of shock).

Maybe you saw the same show as I did about Great Britian and its cars. It was said that after a big jump a few years ago when truckers were going to shut down as a protest (little happened) People rushed to buy very small gas efficient cars, but after a while even at over 5.00 a gallon they were demanding big american cars and now big cars are about as numerous as small ones. (this was on TV about a year or so ago) Seems like people will adapt and still pay. They may give up other things in life but there are things they will sacrifice in order to drive. I also remember hearing Jonh K Galbrath talk about the fact he was the head of the gov gas rationing program during WWII and he said people were given gas rationing stamps. That people were very patriotic and would give up a lot of things, often donate usuable pots and pans to melt down for tanks and guns. Donate rubber goods such as their usuale boots ect for tires for jeeps etc.ect.....but what they wouldn't do very willingly is give up gas rationing coupons and would beg ,borrow even cheat and steal for them. They would often be sold on the black market for a lot more than you'd thing anyone would pay for gas.

[chadk66]

Gas prices are very hard to understand indeed. Some on here insist it's supply and demand. Hard to believe that since our gasoline reserves are at an all time high right now.

[DaveB]

Since when are you entitled to a certain price for gasoline?

Is this China or the USA? Reading online forums I sometimes wonder.

[so what]

Jigman what does that prove. Other countries place a lot of taxes on gas and use it to control the people. In the US there is supposed to be competetion to keep profits in check. Doesnt seem to be wroking though.

[Another views]

My electric bill can only go up if the increase is approved----they must show it's justified. Why isn't gasoline the same? 25 years ago I paid $70 for a calculator that could only +,-, X and divide. Today you can buy one for around $2! Gas doesn't have to keep getting higher and higher.

[DaveB]

Why dont you ask the Govt to tell you what you can sell your house for too? Maybe they should cap your salary and your rate of increases.

Please. Karl Marx would be proud of you.

[mac]

Point of fact.

The Chairman of Exon who just retired with the 400million bonus was just another "kid" in my neighborhood in Watertown, SD in the '40s. I didn't know him too well as he is a few years younger.

Guess I should have gone into Engineering.

[karlmx]

Which is worse?

The goverment telling you what to do , or the big business?

New world order?

[DaveB]

How is big business telling you what to do? I dont follow your logic.

[VMS]

If people think the big oil companies are gouging and just making profit, take a look at where your $$ go to make gasoline...and why...

Check this website out...

http://money.howstuffworks.com/gas-price.htm

Steve

[chadk66]

I am all for smaller gov't. However, there are certain areas I believe that the gov't needs to regulate. As mentioned, electrical rates, another that jumps into my head is milk prices. Why do they regulate these? Easy. We basically are dependant on them to function on a daily basis. I feel gas is the same. 99% of all things are choice. 1% are not by choice. At least realistically speaking.

[Another views]

Exxon and Mobil were separated a few years ago because of monopoly problems. Recently they were allowed to merge. Without the competition gas prices are rising. What happen to "Let the market determine prices"?

[rspahr]

<<Each barrel of oil contains 42 gallons (159 L), which yields 19 <<to 20 gallons (75 L) of gasoline.

If they are able to produce 20 gallons of gasoline from a barrel of oil at $71/barrel, their cost without any refining/transportation/gas station would be $3.55 per gallon. Something does not add up in this article. Are they able to sell some of the byproducts from refining and make up this difference or are the numbers just wrong in this article?

[rspahr]

It looks like the government is making a big profit if these numbers are correct.

[unlogged Texeye]

You would be correct if all you could get out of a barrel of oil was 19 or 20 gallons of gasoline. There are also other hydrocarbons that make up the rest of the 42 gallons. These are the light and heavy ends of crude oil.If it were not for the profit made on the other distillates gas would be more than double it's price.

One of the last uses of the waste oil or oil after all the light hydrocarbons have been removed is to make carbon black.This is what all your tires are made of.There is not any part of a barrel of oil that is not used in some way or another.

Good article BTW.
Have a good one.
Texeye

[rebs]

you are right, when oil is refines there are other products that come from it, gasoline is almost like a by-product of the refining process. heating oil and diesel fuel also come from that same barrel of crude oil

rebs

[Tom B]

>What happen to
>"Let the market determine prices"?

But the market is determining prices. Demand is still as high as it has ever been. If you sell something, you do not lower the price if demand is still great, you keep raising prices until demand tells you to stop.

If you REALLY want to do something, park your car and walk or ride a bike 2 or 3 days a week. Maybe try carpooling or riding the bus.

I can guarantee that as long as demand remains high for gas that prices will not go down.

Tom B

[VMS]

That was one thing I noticed too. I can see why Government would not want to regulate the cost of gasoline. If the federal government gets a certain percent of tax dollars based upon the price of gasoline, the higher the price, the more they get...

Steve

[Whit]

the federal tax rate on gasoline is 18.4 cents per gallon regardless of price. higher prices means less consumption and therefore less revenue to the federal coffers.

[Matrix Guy]

Those petro experts also said that 30.00 of the 72.00 for the price of crude was based strictly on fear, speculation and what "could" happen in world market. The world market oil traders are ripping you and I off. How do you spell "Sur tax" on oil company profits? Until someone tells the oil compoanies that their profits will be the SAME % at any price a barrel of oil goes for, The oil compoanies are enjoying BIG profits because they raise their profit margins while their costs stay the same no matter what a barrel of crude goes for. The cash strapped state goverments couldn't care less about the price of gas because they get more sales tax revenue as the price goes up. Until somebody starts dying or gets voted out of office, the oil situation will NEVER change.

[MAtrix Guy]

Sorry Tom, but you forget one thing. When a product becomes as important necessity as gasoline where there are few alternatives, the goverment gets involved to prevent monopolistic pricing. Every state in the union has a regulatory agency that controls electricity and natural gas prices for obvious reasons. Before it is over the goverment will have to step in to put oil companies on the same footing. Most people don't know it but there are people out there that have doomday scenarios on what will happen if gas prices go high enough. The goverment will stepp in to maintain civil order and prevent chaos. What you are advocating is called class warfare where only the rich will have access to high priced gasoline. The last thing you are going to see is Oprah Winfrey walking, riding a horse, or taking a bus. The will be riots and mass civil disobedience to the likes you have never seen before if gas goes too high and the masses can't afford to pay and they have to endure the "richies" and socities upper crust only affording gas.

I will tell you a good place to start preserving gas and it will sound harsh. There are literally millions of people living on 40 foot city lots without driveways or garages while parking in the streets in a godzillion places in urban city dwelling America who have absolutely NOT one reason to own a gas guzzling 4X4 or 4x4 SUV. They need to pass laws outlawing 4 X4 Suvs and gas guzzling trucks people LIVING in Urban City America. Sounds draconian but some people are waSTING GAS ON special purpose VEHICLES THEY HAVE absolutely NO reason to own. They don't allow people to own farm animals in urban America and it WILL come to a point they will pass laws preventing gas guzzlers ownership.

Why does a person living in southern CA need a 4 X 4 SUV? Last time I checked there aren't too many snow or sand storms happening there. Why does a person living in suburban Chicago need a gas guzzling Hummer or 4 X 4 pickup, SUV when he hardly has a place to park it let alone have a real use for it? The streets in Chicago get cleared of snow real quick nowadays.

For surburban vehicle owners there should be laws only allowing 1 4 X4 or gas guzzler per family. This old garbage of 3 or more guzzlers per family where the wife doesn't even work and the kids have SUVS to drive to school is just a gas waster too. Going to be some tough decisions coming down and it won't be pretty.

[heresathought]

You put a peanut barren in the whitehouse and the price of peanut butter goes up. You but an oil barren in the whitehouse.......guess what goes up

[Matrix guy]

OIL baron ...Bush....NOt hardly my friend. Running a baseball team is hardly an oil baron. Bush is as much as an oil baron as the gas station clerk taking your money from filling your car.

[rebs]

>OIL baron ...Bush....NOt hardly my friend. Running a baseball
>team is hardly an oil baron. Bush is as much as an oil baron
>as the gas station clerk taking your money from filling your
>car.

where do you think him and his father made their millions befor the presidency and the baseball team ?

rebs

[Boden]

Interesting that Gore had as much $$ invested in oil but was never referred to as "an oil man".