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Pelosi vs. the gas gougers

Nancy Pelosi's House has just passed a bill banning gouging at the pumps, and it's about time.

As George Will points out, the greedy oil companies pocket some thirteen cents profit per gallon of gas. But it doesn't stop there, of course. The average American pays an additional 39 cents per gallon in combined state and federal taxes.

Yeah, we're getting "gouged," all right, but the oil company's four percent markup has little to do with it.


And yet, there does seem to be something wonky about the whole thing because do you remember that Getty station owner who lost his Getty deal? He was selling gas at some few cents less than everyone else. I'm assuming that as a business owner he wasn't selling it at a loss, so why did Getty (maybe it was Gulf?) pull the plug on his license? Yes, yes, it was in his contract, but if he's willing to take a smaller profit, what's up with that?

K, if it's the same case I'm thinking of, my understanding is that the station owner ran afoul of some government regulation prohibiting "unfair" sales practices.

If the money is really being used to maintain the roads, well the roads do need to be maintained. But I suspect there's probably a big chunk of graft and payola in the tax portion of the cost of gasoline, so they should just cut the taxes.

Give me tax cuts and more of them. Keep 'em coming! They stimulate the economy and make goods and services cheaper.

I realize that George Will did say it, but there is no way that the "oil companies" profits are only 13 cents per gallon. That equates to less than 5% profit.

That is absurdly wrong.

I just checked Exxon Mobil's most recent 10Q report. They show (in millions) a Net Income of $9,280 on Total Revenues of $87,223. That equates to a profit of 10.6% for the quarter.

And that is the profit for just part of the gasoline supply chain.

>...there is no way that the "oil companies" profits are only 13 cents per gallon. That equates to less than 5% profit.

Be careful. I made the same sloppy math error in my original post. That 5% number comes from considering the 13 cent as a percentage of retail price at the pump. In reality, of course, the gas costs the oil companies much less. I can't vouch for Will's exact number, but it seems plausible.

If you add up the crude oil suppliers profit, the refinery profit and the distributer profit, you get a lot more than $0.13 per gallon.

I'd bet the 13 cents is the profit of the station operator/owner, but they aren't "the greedy oil companies".

You also have to bear in mind that gasoline is less than 40% of Exxon's refinery product sales, and you can't assume that gasoline is 40% of net profit.

You also can't assume that the other products are more profitable than gasoline.

Going back to my Exxon Mobil number of 10.6% profit. That is 10.6 cents for every dollar of income. At $3.00 per gallon, the income would be $2.61 (3.00-0.39).

2.61 x 10.6 = 27 cents

I agree that you can't make assumptions either way.

Is $3.oo/gallon Exxon Mobil's price or the price at the pump?

Wow Barry, could you get any dumber or more brainwashed?

The Oil Cartel owns EVERYTHING from the ground to the filling station tanks. Are you seriously saying that when Clinton was in office it really only took $1.25 to deliver that gallon of gasoline, but today, with Chimp in office, it takes $3.50?

If this is all true, how are oil companies making record profits every quarter?

Also, did the price of crude drop just months before the last election? (hint: the answer is NO). Yet, the price of gas crashed below $2.00 as the elections neared, but then went back up to $3.50 to build up billions to try and steal the 2008 elections ... um, no wait, that would just be SILLY!

It would be ridiculous to imagine the Oilmen President and Vice President being behind such an absurdly obvious and deeply criminal manipulation of the American people. Hell, next thing you know the tinfoil hat crowd will be saying that they went into Iraq for OIL and MONEY and not to stop Al Quida.

Is $3.oo/gallon Exxon Mobil's price or the price at the pump?

Price at the pump. I forgot to subtract the station profit.

Barely the President can't do ANYTHING without Congressional approval.

There's no way to prove the POTUS "helped raise and lower oil prices" because there's no way the POTUS CAN raise or lower oil prices!

World deamd is UP....world production is down - Iraq's oil isn't near pre-war levels, Nigeria is suffering diminished oil production, so is Venezuella.

See how that works?

Increasing demand, amidst a decreasing supply = higher prices???

Not too hard to understand, is it?

"Also, did the price of crude drop just months before the last election? (hint: the answer is NO)." (BH)

I'm sorry....and God knows I really do hate doing this (resorting to ad hominum and all) but in this case, I really must;


The price of crude oil DID indeed drop in the early Fall of 2006 and continued to stay low through early February (due to higher than normal domestic oil reserves, a warmer than average early part of the Winter in the NE, thus less demand for heating oil, etc).

Gasoline prices rose in early March, in response to the refinreries switching over to those "summer blends," dwindling domestic oil reserves due to the cold second half of the winter and the increased demand of the coming peak driving season.

My God, I find it impossible to believe that you were ever a computer programmer, as you claim, and the thought that you might actually now be a teacher of some kind is downright comical, as I know third graders (my nephew, for instance) who have a better understanding of the way markets work than you do.

To paraphrase that line from Animal House "Fat Dumb and stupid is no way to go through life, son.

Would you please refrain from making odiously moronic statements like that in the future?

It puts you on par with legendary dimwits like Rosie O'Donnell, who in reference to the collapse of WTC Bldng 7 said, "...This must be the first time in recorded history that fire melted steel."

Steel indeed melts at 1200 degrees farenheit and pancake (floor-upon-floor) collapses are NOT indicative of "controlled demolitions."

I've seen numerous pancake collapses during fires in vacant H-type buildings (with steel girder supports).


Such idiocies are verboten. They're off limits as they make anyone who sees, reads, or hears them dumber for having done so.

That is all....and I apologize to any of the other readers who find ad hominum to be offensive to their eyes.

Go to New Paltz, NY. They have all bandied together to sell gas,at the same price as in NJ.

Posted by CRB:

Going back to my Exxon Mobil number of 10.6% profit. That is 10.6 cents for every dollar of income. At $3.00 per gallon, the income would be $2.61 (3.00-0.39).

2.61 x 10.6 = 27 cents

Got a better one, CRB.

NYS charges about 40 cents on top of ExxonMobil's price.

The cost to the state for refining, R&D, etc?


My wife, while driving back last weekend through your state of NJ paid $2.95.

Our station in NY is 40 cents higher.

Wanna guess why?

The price at the pump really can't be the primary figure used to accurately assess Energy Company profits on that commodity.

That's simply not enough information.

You have to know the costs of transporting, refining and distributing that crude oil. Any loans and depreciation of equipment, etc., are also factored into the overall profit and loss.

That's why company statements generally run into the many hundreds of pages.

You really can't take the price of crude oil, the price of gas at the pump and extrapolate from those two, there's a lot more information one needs to know before you can accurately determine the profit margin on a gallon of gasoline.

I would, however, like to see the gas tax capped at about 10 cents for the feds and 10 cents for each state - that should be more than enough to cover road maintenance, etc. and it would deliver some welcome relief to citizen/drivers.

Barry said K, if it's the same case I'm thinking of, my understanding is that the station owner ran afoul of some government regulation prohibiting "unfair" sales practices.

Okay, that makes no sense to me.

Heh, JMK has to try and have it both ways, saying it is strict supply and demand, and then when that doesn't work, muttering "well, you know, it's VERY complicated, but the stalwart honest oil companies are competing like heck to bring you the lowest price possible, because they are competitors, you see, and they never manipulate prices because they are good and honest and contribute the vast majority of their political billions to the Republican party, which proves just how honest and brave and blah blah blah blah blah blah blah ...

K, per your request:

A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices.

Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon.

But the state Department of Agriculture, Trade, and Consumer Protection says those deals violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.

Loans factored into annual profit & loss reports is a hallmark of the regulated market.

Corporate entities are allowed to write off depreciation and log loans into the loss column....there' nothing "complicated" about that process.

There have been and continue to be some accounting legerdemain, but that's part of our hallowed American system.

I support that!

"Between 1977 and 1985, the oil industry recorded relatively high profits—averaging nearly $33 billion per year, after adjusting for inflation. These good times were followed by ten years of relatively flat profits, averaging just $12.3 billion per year. In 1996, profits began to rise again but have been anything but stable, ranging from $9 billion to nearly $42 billion per year. Between 1977 and 2004, the industry’s domestic profits totaled $643 billion, after adjusting for inflation.

"In contrast, federal and state taxes on gasoline production and imports have been climbing steadily since the late 1970s and now total roughly $58.4 billion. Due in part to substantial hikes in the federal gasoline excise tax in 1983, 1990, and 1993, annual tax revenues have continued to grow. Since 1977, governments collected more than $1.34 trillion, after adjusting for inflation, in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period.

(Bureau of Energy Analysis, U.S. Energy Information Administration)


And who votes to put taxes on gasoline? Republicans, because it is a regressive tax that hits the poor and middle class hard, but isn't noticible to the mega-wealthy.

Because it's all republicans' fault, aye? Lord knows I'm not registered with either party, but according to you, Bailey, the kid at Tiennamen was run over by Republicans. Slow your roll, chief.

Actually, it's nutty environmentalists who've lobbied to raise the gasoline tax Barely.

They mistakenly believe that higher gas prices will reduce driving.

What these Luddites really want to do is to make it harder (more expensive) for regular people) to get to work and this slow the economy down.

Oh, and the enviro-nuts are a major Democratic constituency.

Um, I'm SO SURE a bunch of college kids sways the government to raised gas taxes, that just sounds SO REALISTIC! After all, who does the government listen to:

a) a bunch of kids
b) their corporate golf buddies who give them multi-million dollar jobs the second they leave office if they play ball, or just outright bribe them like Duke Cunningham

Take your time, JMK. Kent State is a hint as to how the government views college kids.

Because stating that all environmentalists are college-age people is sooo much more realistic, aye Bailey?

There hasn't been a real "oilman" in the WH since AlGore (whose family owned a large stake in Occidental Petroleum) left in January of 2001, BH.

G W Bush is about as much an "oilman" as you are.

Now, Gore DID manage to sell of the Navy's strategic petroleum reserves (in Elk Hills, CA) to....yes, Occidental Petroleum, but even that deal wasn't technically illegal.

The curren administration has absolutely no conrol over world oil prices.

OPEC production/output and demand (worldwide demand has increased, relative to supply since India & CHina have been rapidly industrializing this century.

The oil companies have been lobbying to get permission to build new refineries, without success. The feds can't force localities to accept these refineries and the NIMBY mentality seems to trump the lobbyists.

Is FOX NEWS a reliable enough source for you, JMK?


Bush Encounters Hurdles on Energy Agenda
Saturday, April 23, 2005

WASHINGTON — Running for president five years ago, George W. Bush (search) pledged to jawbone energy-exporting nations to keep oil prices low and to win passage of legislation to spur more domestic energy production.

Delivering on either count has proved difficult for the Texas oilman.

Soaring oil and gasoline prices are beginning to take a toll on U.S. economic growth and on Bush's approval ratings. To get his long-stalled energy agenda passed, the president is putting more of his political prestige on the line.

My, my, my. Looks like you got skunked again. Chimp himself said he could exert control over world oil prices. Your boy said it, not me.

FOX NEWS, probably your only source of news outside of Rush Limbaugh, then call him what?

How did FOX NEWS describe George W. Bush?

Did they call him an oilman, JMK?

Did they?

I think they did.

Isn't it sad when your own wingnut right-slanted side humiliates you?


Oh, here's the link, since I know you are paranoid enough to accuse me of making it up, and probably don't know how to use a search engine.

GW's company Spectrum 7 was a money-loser. It was bought out by Harken, in 1986.

AlGore's family had a HUGE stake in Occidental Petroleum - now THAT'S a major oil...er, energy company.

"America runs on oil" is not just a saying...and the energy industry has produced a large share...the lion's share of our prosperity.

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