[Steven Pro]

If you think oil company profits are obscene, check out how much the government is racking in.

http://www.cbsnews.com/stories/2006/...-SearchStories

You have to watch the video, but it shows that the how the cost of gasoline is broken down:

54% price of crude oil
21% refining costs
2% transportation
6% "big oil" profit
17% taxes

Yes, the government is making about three times what the oi companies are making on every gallon of gas for doing nothing. Next time you are filling up and disgusted with the price, be sure to focus your anger on the real price gougers.

[Reefland]

What kind of prices do you have in PA right now? We are running between 2.67 and 2.75 per gallon.

[Steven Pro]

Weare at about $2.89/gallon, but I just bought gas and got $0.70 off per gallon. The local largest grocery store opened their own gas stations and give $0.10 off per $50 you spend.

[captain Jim]

We all should have seen it comming! I dont agree with the prices either but the oil companies have been taking advantage of other countries for years!
When I was in Germany 3yrs ago I couldnt believe the price of gas!
Dont expect the prices to come down much, if anything it will probablly go up until the US pays the same as the rest of the world.
What I dont understand is why dont we own those oil fields in Saudi Arabia?
Didnt we win the war? I bet Russia or China would have kept the oil if it were them in the war!

[Ninong]

Originally Posted by captain Jim

What I dont understand is why dont we own those oil fields in Saudi Arabia?
Didnt we win the war? I bet Russia or China would have kept the oil if it were them in the war!

What war are you talking about? We've never been at war with Saudi Arabia.

[smidoid]

You guys don't know the half of it - it's nearly ten bucks a UK gallon here; and Mr Bliar gets most of that.

[Ninong]

Originally Posted by smidoid

You guys don't know the half of it - it's nearly ten bucks a UK gallon here; and Mr Bliar gets most of that.

I think you should shop around a bit more.

The average price for unleaded 95 petrol in the U.K. as of May 11th was 95.3p/liter. With the British pound at $1.8849 (as of one minute ago) and 3.7583 liters/U.S. gallon, that's only $6.75/U.S. gallon.

You guys have it made!

P.S. -- It's cheaper in Baghdad but you have to wait in line for hours and you might get bombed while waiting.

[Ninong]

The opening post may be confusing to some folks because of the way the numbers are quoted. Don't forget, integrated oil companies make a profit at every step of the process. ExxonMobil, for instance, made a NET PROFIT of $36.1 billion last year on sales of $328 billion. That's 11%. That's not really excesssive in my mind but it is twice as high as the numbers quoted would lead you to believe. And that was net profit, after all corporate income taxes. They're not in business to lose money.

Another point that I would like to throw in here is that if you want to "complain to the government" about gasoline taxes, you should start at the state and local level because state and local taxes are HIGHER than federal gasoline taxes in almost every state -- they're four cents/gal lower in Wyoming. In some states they're MUCH higher -- almost twice as high! In New York, state and local gasoline taxes are more than double federal gasoline taxes.

There is a reason that gasoline is taxed as high as it is. It's to encourage conservation. If you lower the taxes on gasoline, you would have to raise taxes elsewhere to maintain revenue neutrality. The gasoline taxes are put to good use. I don't think the gasoline taxes are excessive at all. In fact, many people argue in favor of raising gasoline taxes. I'm not one of those people but that's a fact. Gasoline taxes in Europe are MUCH higher, which is why gasoline is $6.75/gal in the U.K. right now.

[Poseidon]

Does anyone know when E85 is going to make a REAL option in the US? What about cost, how much is E85 compared to "regular" gasoline? I know the MPG numbers using E85 is about 25% less then "regular" gas. THis percentage is coming from a GMC Yukon, so not the most fuel effecient vehicle I know, but the variance should carry over to other models I am sure.

[Ninong]

Have you ever looked at the true cost to produce E85? Check it out. Don't forget the cost of land, the cost of fertilizer (including the energy required to manufacture the fertilizer), the cost of irrigation, the cost of harvesting, the cost of the gas to operate the cultivating and harvesting equipment, federal farm subsidies, etc.

It's sort of like adding up the environmental cost of your hamburger. Don't forget the cost of land, the cost of water, the cost of feed, etc., etc.

[Steven Pro]

Here are some profit margin numbers for all to digest:

BP 7.15% http://finance.yahoo.com/q/ks?s=bp

Chevron 7.77% http://finance.yahoo.com/q/ks?s=CVX

ConocoPhillips 8.09% http://finance.yahoo.com/q/ks?s=COP

Exxon Mobil 10.83% http://finance.yahoo.com/q/ks?s=XOM

Microsoft 31.59% http://finance.yahoo.com/q/ks?s=MSFT

Intel 20.46% http://finance.yahoo.com/q/ks?s=INTC

Verizon 9.13% http://finance.yahoo.com/q/ks?s=VZ

Pepsico 12.61% http://finance.yahoo.com/q/ks?s=PEP

Coca Cola 21.52% http://finance.yahoo.com/q/ks?s=KO

[Ninong]

Maybe our oil companies aren't making enough profit? Check out this Chinese oil company's 24.2% net profit!

Or this Italian oil company's 12.5% net profit!

Maybe we should help ExxonMobil make even more money so that they can afford to build new refineries without waiting for the government to subsidize them? And besides, it cost a lot of money to keep all those lobbyists and lawyers on the payroll.

[smidoid]

Originally Posted by Ninong

I think you should shop around a bit more.

The average price for unleaded 95 petrol in the U.K. as of May 11th was 95.3p/liter. With the British pound at $1.8849 (as of one minute ago) and 3.7583 liters/U.S. gallon, that's only $6.75/U.S. gallon.

You guys have it made!

P.S. -- It's cheaper in Baghdad but you have to wait in line for hours and you might get bombed while waiting.

ONLY USD6.75? OK - math was never my strong suit - and the pound is stronger now (or is that vice versa) but I run a diesel guv'nor and I'm out in the sticks up here!

[Ninong]

Originally Posted by smidoid

- and the pound is stronger now (or is that vice versa)

It's depends on your time frame. The pound is weaker today vs. the dollar than it was when I was a kid. Of course, that was a long time ago but at that time the British pound was worth US$5.00. It gradually came down from that level over the decades. I distinctly remember when it was around $2.78.

However, in more recent times (say within the last 10 years or so), I remember when the pound almost reached parity with the dollar. At one point it was down to $1.05.

The euro, which you guys have not adopted, was issued at $1.17. At one point during the administration of our President Bill Clinton, the euro was all the way down to $0.83. That's because the Democratic president was running huge budget surpluses three years in a row -- the last three years of his second term. Today the euro is around $1.29, which is the highest it has been in quite some time. It did reach a high of around $1.36 but that was more than a year ago. That's because our current Republican president is spending money like a drunken sailor and running up gigantic budget deficits with the help of a Republican controlled House and Senate. Now that they are in control of everything, it's hard for them to blame it on the Democrats.

The long-term trend for the dollar is down, especially against the currencies of oil-exporting countries. It has to go down as long as we continue to have huge balance of trade deficits, huge federal budget deficits and an incompetent federal government at the helm. Right this moment it is going down because other governments are beginning to raise their interest rates. They have been lagging us in that regard. Our federal reserve has raised rates 16 consecutive times and it looks like they're not finished yet, which is what is upsetting our stock market the past few days.

Notice that the looney (Canadian dollar) has been rising vs. the US dollar over the past several months. There was a time not that long ago when the Australian dollar and the Canadian dollar were about the same and both were around US$0.73. No more. The Canadian dollar has moved up strongly but the Australian dollar has not. That's because Canada is an oil-exporting country. (Right this minute, the British pound is US$1.88, the Australian dollar is US$0.76 and the Canadian dollar is US$0.90. The euro is US$1.28 right this minute. It was $1.29 earlier this morning.)

Anyway, the currency markets, the crude oil markets, the precious metals markets, are all really in turmoil right now because of Iraq and Iran and other geopolitical disturbances, like Nigeria, Venezuela, Bolivia, etc. and the fact that we have two more aircraft carriers headed to the Middle East right now. It all makes for a very volatile market. For example, gold hit $730/oz yesterday morning in London and the last time I checked (one minute ago) it was $680/oz. Crude oil is down $2.55/bbl today to $69.55. Just an example of the volatility that has been going on lately.

[Poseidon]

Originally Posted by Ninong

we have two more aircraft carriers headed to the Middle East right now. It all makes for a very volatile market.

Uh OH! If we decide to strike Iran, which seems more and more likely, AND Delphi goes on Strike, I guess that will Kill Michigan outright. In an economy driven by automobiles, in a community of Blue Collar folks, the gas prices are a big part of our budget. If OIL goes up more, and the money goes away because of a strike.... this is not going to be a fun place to be.

George I really have no idea how much the corn fuel costs, but I know better then to believe what I heard from someone at work.... $0.60/gallon.

[Steven Pro]

I know people are getting hurt by gasoline prices. It is starting to affect my family's budget as well. But, it is not because of "big oil's" windfall profits. Their profit margins are modest compared to many other companies. And, anyone that says differently is either lying or simply ignorant of the facts.

[Ninong]

Originally Posted by Steven Pro

But, it is not because of "big oil's" windfall profits. Their profit margins are modest compared to many other companies. And, anyone that says differently is either lying or simply ignorant of the facts.

Interesting comment considering that no one in this thread has disagreed with you on that. I strongly disapprove of the $400 million retirement package ExxonMobil paid their retiring CEO but I certainly don't disagree with their profit margins. In fact, I think it's time for them to raise the dividend!

Oil company profits are rising because the value of their product is rising. This trend is likely to continue into the foreseeable future. There doesn't seem to be much that OPEC can do to change this course one way or the other. Saudi Arabian production has probably peaked already, in spite of their claims to the contrary.

[Steven Pro]

My comments about liars or ingornant people were aimed at politicians or liberal talking heads on TV. I just saw another guy that didn't know what he was talking about on the Colbert show ranting about obscene oil company profits.

[Ninong]

Originally Posted by Poseidon

Does anyone know when E85 is going to make a REAL option in the US? What about cost, how much is E85 compared to "regular" gasoline? I know the MPG numbers using E85 is about 25% less then "regular" gas. THis percentage is coming from a GMC Yukon, so not the most fuel effecient vehicle I know, but the variance should carry over to other models I am sure.

According to this Business Week article just published today, E85 is still not cost competitive with gasoline, even at today's gasoline prices. Once you factor in the lowered gas mileage, it costs more to run on E85 than regular gasoline.

The environmental costs are difficult to compare because you end up comparing apples and oranges but proponents of ethanol often fail to consider the damage done by dumping millions of pounds of fertilizer on crops, much of which ends up in the Mississippi river, since it and its tributaries drain two-thirds of the contiguous United States. And all of this fertilizer, along with a scary assortment of carcinogenic petrochemicals, ends up in the Gulf of Mexico.

One statistic that I always remember, although it doesn't apply directly here, is that it takes 16 pounds of feed to produce one pound of edible beef. Then you start calculating the amount of water and fertilizer that it takes to produce the 16 pounds of feed to arrive at the true environmental cost of a pound of beef.

[Ninong]

Originally Posted by Poseidon

...AND Delphi goes on Strike, I guess that will Kill Michigan outright.

As I'm sure you know by now, Delphi's workers voted overwhelmingly yesterday to authorize a strike.