Gas 3.50 a gallon?!?!?!

**rock_lobster** · 04-25-08, 06:28 AM

I just saw gas at $3.50 a gallon. Now I know it may not be much compared to the rest of the US since I live in Louisiana, but just last week, it was $3.27 down here..........that's a freaking $.23 jump in just one week!!!

Now I've heard many theories on this such as "Well it depends on what's going on in the futures market". People buy futures/stocks anticipating a skyrocketing profit, so by them buying it, the price goes up.

I've also heard that the becaue the oil companies cut supply, that also drives the price up. (If you're an economist, you know what I'm talkin about)

Here's my theory. You can tell me all the mumbo jumbo, but I still think the fact still remains that the oil companies couldn't give two shits about the consumer.....well that's fine, I don't expect them to like me. However, to force people to pay outrageous prices on an extremely needed commodity in such a monopolistic way is unreal.

I read that Exxon netted 30 billion dollars in profits just last year.......wtf....so because the ceo wants a 1 million dollar christmas bonus, we have to pay extra. Because they like seeing 30 billion instead of 20 billion we have to forego other consumer items to buy their overpriced gas.

I mean honestly, the only way I see gas prices going down is if and when it's so expensive people literally cannot buy it anymore. Either that are we say fuck you to the hippies and start drilling our own damn oil off our own damn coastlines. I'm sure I'll get called ignorant, but I don't feel it's right that people will have to forego simple necessities because a company wants a few extra dollars in their pocket.

PS: can't wait for this war to be over so everyone will see that the war isn't causing these outrageous prices.

**Manse** · 04-25-08, 06:46 AM

oh, it's primarily the futures market. The general assumption is the cost of crude drives 3/4 of the price of gasoline. The tightening of production levels is so the refineries can still make some profit.

The oil companies sell at whatever the current market rate is. So, if oil sells for $100 a barrel (for ease of calculation), and you buy a couple million barrels at that price, you hang on to it. When there are fewer barrels available on the market because of your purchase, the price goes up and you sell. If you sell those barrels when the price is $101, you just made a couple mil in the span of a few hours (at the rate prices are going up).

That's the problem. Oil is not being moved from the oil companies to the refineries. It's trading hands several times before it gets there, each person taking their cut and driving the price higher.

Rich richer, poor poorer. You know the drill. With any luck, the price will rise high enough that the market cannot sustain the increase, and it will pop. Similar to the housing market. The problem is we have to survive the pressure until the pop.

**DeusInnomen** · 04-25-08, 06:46 AM

$3.50? Been awhile since it was that low around here. Out here in the suburbs it's nearly $3.80 a gallon, and in Chicago proper it's $3.99 the last I saw a week ago, undoubtedly it's broken $4.00 finally.

**jason_jinx** · 04-25-08, 07:58 AM

They had a hearing recently in Washington with all the major Oil companies.

They basically said that to move foward make profit and research they have to charge like they do.

Which is complete bullshit.

Only way to combat the price is teamwork across america (which will not happen).
It would take a week of no one buying gas to show these companies who keeps the money flowing and who really has the power.

**Nuckle** · 04-25-08, 08:07 AM

Originally Posted by jason_jinx

It would take a week of no one buying gas to show these companies who keeps the money flowing and who really has the power.

It would take a day or weekend at the absolute most.

I hate that we are getting screwed but I cant blame the oil companies. They keep going up on the price and we do not change our habits. Out of one side of my mouth I am bitching about fuel prices and the other I am talking about buying a bigger boat that will consume 1.5 times the fuel my current boat consumes. I think it will take $4.50 to $5.50 as a nation wide average before Americans really push back. The good news is that if gas hits $5.00+ per gallon I will be able to trade my boat in on an inflatable raft.

Nuck

**Consultant** · 04-25-08, 08:09 AM

Did you know that the oil companies make about 8 cents a gallon profit on gas while the government, on average, makes 41 cents a gallon in taxes?

Profits are high because consumption is high, not necessarily prices.

Speculators, not oil executives, drive the price of crude oil and while the supply of crude is not in question, our capacity to refine it into gasoline is.

We havent built a new refinery in something like, 20 years here in the U.S.? And we expect gas to cost $1.50 a gallon.

They pay 9 or 10 dollars a gallon over in the U.K. and we complain? The U.S. is like the Wal-Mart of Oil - our prices have been kept artificially low over time because of quantity and other factors I don't understand.

I'm no expert, but from some of these posts - neither are the rest of you - Mr. "Boycott for a Week" as if that'd actually happen or have an impact.

Anyway - just my opinion but once your cute little day/week gas boycott was over and they rode out that hard week on their margins - what do you think prices would do in reaction? Hmm? I'm willing to stake my economics degree on a sudden bump in prices to make up for lost time and rebuild their cash reserves.

Thank you, Milton.

**Nuckle** · 04-25-08, 08:13 AM

I do not believe for one second that oil companies are making 8 cents per gallon on gas. I would believe that back when gas was less than $1.00 per gallon but not at $3.50 per gallon. Not calling you out consultant just saying someone is feeding us a line of bullshit.

Nuck

**Warchild40k** · 04-25-08, 08:15 AM

EDIT.. found more recent data....

Prices are listed in dollars, in gallons, litres and
barrels.
per litre per gallon per barrel
U.S. Light Crude CLc1 $0.57 $2.17 U.S. $91.32
Jan. 18 high $2.61 imperial
Record high Jan. 3 $0.62 $2.38 U.S. $100.09
$2.86 imperial

EUROPE
Norway $2.22 $10.09 $353
Netherlands $2.21 $10.04 $351
Belgium $2.11 $9.59 $329
United Kingdom $2.05 $9.31 $326
Italy $2.01 $9.13 $319
Portugal $2.01 $9.13 $319
France $1.93 $8.77 $307
Germany $1.92 $8.72 $305
Poland $1.81 $8.22 $287
Spain $1.58 $7.18 $251
Russia $0.83 $3.77 $139
ASIA
Japan $1.43 $5.41* $227
Kazakhstan $0.72 $3.27 $114
China $0.60 $2.73 $95
AMERICAS
United States $0.81 $3.07* $129
Mexico (as of Dec.21) $0.65 $2.47* $103
Venezuela $0.03 $0.12 $4.19
Brazil $1.40* $6.36 $222
OTHERS
Nigeria $0.59 $2.68 $94
Saudi Arabia $0.12 $0.55 $19
Iran $0.11 $0.50 $17

**Consultant** · 04-25-08, 08:19 AM

Originally Posted by Nuckle

I do not believe for one second that oil companies are making 8 cents per gallon on gas. I would believe that back when gas was less than $1.00 per gallon but not at $3.50 per gallon. Not calling you out consultant just saying someone is feeding us a line of bullshit.

Nuck

This is for California, April 21, 2008.

According to http://www.energy.ca.gov/gasoline/margins/index.html

Distribution Costs, Marketing Costs and Profits $0.11
Crude Oil Cost $2.80
Refinery Cost and Profits $0.28
State Underground
Storage Tank Fee $0.01
State and Local Sales Tax $0.28
State Excise Tax $0.18
Federal Excise Tax $0.18

TOTAL= $3.84 per gallon in taxes, fees and operating costs.

Wait for it.....

Retail prices $3.85

11 cents profit includes their transport fees....and stuff.

They ain't gettin rich on the margins alone - its volume!

**DeusInnomen** · 04-25-08, 08:25 AM

Originally Posted by Consultant

Originally Posted by Nuckle

I do not believe for one second that oil companies are making 8 cents per gallon on gas. I would believe that back when gas was less than $1.00 per gallon but not at $3.50 per gallon. Not calling you out consultant just saying someone is feeding us a line of bullshit.

Nuck

This is for California, April 21, 2008.

According to http://www.energy.ca.gov/gasoline/margins/index.html

Distribution Costs, Marketing Costs and Profits  $0.11 
Crude Oil Cost $2.80
Refinery Cost and Profits $0.28
State Underground
Storage Tank Fee $0.01
State and Local Sales Tax $0.28
State Excise Tax $0.18
Federal Excise Tax $0.18

TOTAL= $3.84 per gallon in taxes, fees and operating costs.

Wait for it.....

Retail prices $3.85

Sorry, my 8 cent guesstimate was 700% higher than the actual 1 cent per gallon in California.

Correction: the retail profit is 1 cent per gallon. That's the part the gas station makes. What the oil company makes is the difference between what they paid for the oil versus the amount charged in that per-gallon rate, plus that $0.11 in the first line which is mostly recovering their costs for exploration, drilling and transporting.

Keep in mind that the oil companies buy and sell oil a LOT, so not all of the oil they buy is used for making gasoline and other petroleum-based products. (Remember, you get a TON of products out of oil, not just gasoline. Those can all be sold too. See also: http://en.wikipedia.org/wiki/Petroleum#Uses) They also trade on the commodities market and make a profit that way too, just like anybody else in the world can.