Gas Prices

April 27, 2006

We've all read previous gas price topics and even though a lot of the blame seems to fall on "big oil", I don't know if I've seen anyone throw blame on the government. Gas prices here are flirting with the $3.00 mark and when you consider that the government tacks on around $.70 per gallon in taxes, that itself should make people fume! I say if the pinheads in Washington reallywanted to help our their constituents, they would repeal the fuel tax and severely limit the riders full of pork they tend to pass under the cover of night. And they shouldn't vote themselves pay raises whenever the feel the need it. Of course, there's no such thing as a eutopian society, is there?

asepgrad98 · April 27, 2006

The oil company profits are not obscene. As of September of last year the total take for local, state and federal governments for each gallon of gas sold was 46 cents. In New York that figure is 63 cents. At the same time gasoline retailers were making about 12 cents on the sale of a gallon of gas. Right now the government take is approaching an average of 50 cents a gallon. Retailers are making about 14 cents. so ... who is making the obscene profit? The local gasoline retailer invests in the community, buys a plot of ground, builds a gas station, hires the employees, pays the local taxes, deals with the local regulatory agencies, and makes a big screaming 14 cents on each gallon sold. Meanwhile, the government steps in without having invested one dime in that facility and takes about 50 cents per gallon. Some obscene profits, right?

As for profit margins ... the amount of money earned for each dollar of sales ... oil companies are nowhere near the top of the list. In 2005 pharmaceutical companies made about 17.6 cents for every dollar of revenue. That, for those of you educated in government schools, that works out to a 17.6% profit margin for the drug makers. How about your local bank? They made about 19.1 cents for every dollar of revenue. Almost a 20% profit! Not too shabby. And what about your household goods and cosmetics? Those companies earned 11 cents on the dollar. A lot of competition there. Now, the oil companies. What did they make? In 2005 the average was 8.5 cents per dollar of revenue. That works out to an 8.5% profit margin.

Maybe President Bush could have said something yesterday about MTBE. Congress recently refused to protect the MTBE makers from liability from frivolous lawsuits. MTBE is a component in gasoline ... and the makers are bailing. MTBE is to be replaced by ethanol .. .but the ethanol producers just can't keep up! This affects supply, and reduced supply in the face of increased demand means what? Higher gas prices? Could we get the ethanol we need from overseas? Why yes! We could! But the Bush administration has a 54 cent-per-gallon import duty on imported ethanol! There's your price gouging! Drop that import duty and I wonder what would happen to gas prices.

It's enough of a problem when Americans suffer from a tragic level of ignorance on issues of basic economics due to generations of state-run education. It's even more tragic when politicians pander to that ignorance for political gain.

source: Boortz

Truckman031 · April 27, 2006

When the gas prices were high last summer, our governor, Sonny Perdue, took out the state's tax for a month and prices went down I think around 10-20 cents a gallon. I'm worried about this summer, since gas prices are staying at a steady $3.00. Once demand gets high, I bet we see prices in the $3.50+ range.

April 28, 2006

Some obscene profits, right?

It's unbelievable how the politicians pander to the press and people by saying they understand the plight of the little people. They further display their ignorance by demanding hearings into oil company profits when they themselves display their utter hipocrisy by spending other people's money on their own pet projects via pork barrel spending. In addition to all the pork, we're funding social programs which are well meaning and well intended, but are bloated to the gills with red tape where the majority of the funds go to everything else but the intended purpose.

Neal Boortz is the man!

blue2kzr2 · April 28, 2006

You guys also all realize that the STATE taxes on fuel are figured AFTER the the FEDERAL tax on the fuel is added to the price. I know we have ALWAYS been taxed on taxes when it comes to fuel, but is there any other product where this is the case? Maybe cigarettes is the only other one?

What I mean here is that when you pay sales tax for a product in a store, the amount of tax you pay is figured as a sum; State tax is 5.25%, county is 2%, you pay 7.25% sales tax on the PURCHASE price of the item. In the case of fuel, we pay x% tax for the feds and y% for the state. Instead of the taxes being (x+y)fuel cost, it's (fuel cost*x)y. Changing that right there should save us a close to $1.00 per tank.

April 28, 2006

I guess my point on this topic is that if governments and politicians really care about their constituents and want to provide relief, they need to look in the mirror to figure out who to blame. But they won't do it because it's easier to point the finger elsewhere.

Mark_in_Tulsa · April 28, 2006

If they lower the tax on gas, they will just raise the sales tax, or income tax to make up for it. That or they will let the bridges fall apart, and not fix the pot holes at all. (not that they do that here anyways)

Elwood 2000 · April 29, 2006

Fact is, the governement NEEDS the tax dollars on fuel. They spend away and have put themselves in a position of needing that money. Oh, they are trying to buy American voters by offering $100 to everyone in the form of a rebate, but that is crap. What is $100 these days?? Not much. Might as well throw a nickel at me, it is about the same!

Until we shake off the tree huggers and bunny lovers and start drilling in Alaska, the Gulf and build newer refineries, without all the bulls**t regualtions that will make one cost a Zillion dollars, gas will continue to get higher.

Hell, other countries are drilling just 75 miles off OUR coast!!

Our politicians need to wake up, regarding how to run this country from economics to education and everything in between or we will be a third world country pretty quickly.