Fricken gas

Speculation falls in there. I've heard from 15% to 25% can be purely based on the market. Also don't forget about a weakened dollar.

Gas soared this morning, anyone else notice stock market bombed? These are related.

How can taxes be greater then the price of gas per gallon? Taxes are in percentage while the price per gallon is in dollars, a little confusing but a good graph nontheless.

what goes into the price of gas you ask!?!?

MY FREAKIN' PAYCHECK THAT'S WHAT!!!!!

argh! Pissed off x's infinity!!!!

@Bladefist: The effect of oil speculation is built into the 73%, as is the weak dollar.

Yesterday I saw a guy pan-handling at the gas station. He was either very smart or very stupid.

He crunched the Department of Energy number, did he?

The same Department of Energy that met with Big Oil in close door secret meetings to determine future US Goverment energy policies?

Gee, the numbers don't contain any relationship to oil futures speculation. And refining costs AND profits together only explain 10% of costs? Record profits, the largest in the recorded history of the world, and COMBINED with refining costs is only f'ing percent?

So I guess jacking oil prices when a refinery is shut down by fire or hurricane and such is totally flaming bullshit, huh?

Distribution and marketing. So all the massive campaign contributions & all the mis-information campaigns trying to cast Global Warming as a 'distputed' theory. Those costs COMBINED with distribution (getting oil from the Mid-East across the ocean, getting it across the US) COMBINED is only 6%?

This is a steaming, flaming pile of crap.

73% - Crude oil
11% - Federal and state taxes
10% - Refining costs and profits
6% - Distribution and marketing

"Prior to 2004, taxes actually were actually greater than the price per gallon."

Sorry, but you've misread the chart.

The tax plot goes by the percentages to the left, whereas the price per gallon plot goes by the dollars to the right.

@SkokieGuy:

"Those costs COMBINED with distribution (getting oil from the Mid-East across the ocean, getting it across the US) COMBINED is only 6%?"

Ummm, no. The cost of getting oil to the US gets rolled into the cost of oil. Distribution and marketing refers to *gas* not oil. And like I said above, speculation likewise gets rolled into the cost of oil because, well, it directly affects the cost of oil.

This is why I find it hard to hate the oil companies too much. Even if they cut their profits in half (unlikely), the price of gas would only drop like 10 cents per gallon.

@fivecentnickel.com: You should have broken that out. If speculation is 15%, lets say, then thats the 2nd largest percent in your list. Also, speculation and weak dollar is what is contributing to the most of our problems today, so really it would have been more effective to highlight that, and graph it up.

@Bladefist: The US economy will not recover until Ben Bernake and Alan Greenspan are shot publicly (doesnt have to be fatal), future fed chairs must learn that bailing out Wall Street is ALWAYS a short term solution and that the benefit to WS > benefit to the American People.

The problem is, a lot of the Feds policies are based on the idea of trickle down economics, which in fact were viable in 1988 but with globalization and the increasing demand for bigger profits, that results in trickle out economics and then wall street does one of two extremly differnt things, they either keep the cash to bolster their profit sheets or put the money right back into risky investments in hope of a big pay day.

Now why some of the things they do will help me as a white collar worker, none of this will help blue color workers who will be hit first and hardest by any downsizing in the economy.

I think I may have overspoke.

I've read that the cost of a barrel of oil is currently around $50, but that demand has pushed it to $130ish or whatever it is now. So their numbers don't really reflect the whole story.

@SkokieGuy: You do realize the oil companies margin is quite low, and has remained the same or nearly the same for quite sometime now? I think you need to put down the tin foil hat and do some research how foreign commodities work.

Wormfather on Speculators: Anyone in the know, knows that speculation is pretty much all hedge fund managers attempting to inflate the price of crude to gain profits so that they can justify their rediculous fees.

@Wormfather: I agree. All these bail outs turn me bright red.

@Bladefist: I agree that it would be great to have those numbers, but there's no clear agreement on exactly how much of the runup in oil prices is due to a supply/demand imbalance vs. speculation (which is just another form of demand) vs. the weak dollar.

@SkokieGuy:
Why don't you research the number of gallons of gasoline a barrel of oil yields and calculate the crude oil component of gasoline prices yourself? Since you think its all BS.

Let us know what you come up with.

Here is Sunny California we have 'special' gas so pay more. And our tax rate is almost 9% plus the federal taxes.

My parents are in Hawaii (itty bitty islands in the Pacific) and they're paying $4.35. Here: Cheap gas is $4.45 and as high as $4.75 at Shell/Exxon/Chevron

@Bladefist: "You do realize the oil companies margin is quite low, and has remained the same or nearly the same for quite sometime now?"

To further that point, this is america, we're capitalists. The whole tax the heck out of the oil companies is flawed on so many levels.

1. Everyone aggrees that "easy" oil is drying up. This means that worst case senario, the oil companies are going to have to close up shop in 40 years. Best case, they are going to have to spend more money to get oil and do reserch on alternatives.

2. That money we were talking about, well the best way to make sure they have some when they need it is to give it back to the investors and let them reinvest back into the company raising the companies value and captital.

3. You cant tax an industry's profits unless you're going to subsidize them when the going gets bad, so if you do go this roout you may want to go ahead and look at point 1 again.

4. Dont think for a heartbeat that if the US market became unfavorable that the major companies wouldnt take there buisness to china and india. Exclusivly.

5. If you dont aggree with anything I just said, you should realize that for the millionth time, the blame for current oil prices is directly tied to the fed's missctions of the last 8 years.

@Wormfather:
To further your points:

1) Most of you are the investors. You're attacking your own 401ks

2) Big Oil takes hits and has also had record losses

3) You cant tax your way out of problems. You cant force me to stop buying gas by making it not affordable.

4) Wormfather: They hate capitalism, which is what they want to change. Thats the hope/change. Capitalism didn't work for them, so they're vengeful. Capitalism doesn't allow you to saunter through life like a rainbow.

@Starfury: No worries, here in CT we pay the second highest taxes for gas in the union and we have a "special" formula as well.

If the federal govenment is going to do anything they need to finally overhaul the us having 50 formulas and have a national standard issued. What makes me fustrated is that this can be a executive directive (yes, congress would be better, but an exective order could make this happen sooner, in order to make it permenant, congress woudl have to "take" the right away from the states) and we could be paying $0.50 less.

NEWS: Many public transportation systems are running free buses/trains for the next week. OCTA here is doing it called "Dump the Pump" and passes are free from the 16-20.

Here's the link: [www.octa.net]
Coupon: [www.octa.net]

Slickdeals reports only the 19th is free, but OCTA here is free for four days.

@Bladefist: Hear hear!

BTW, I just want to complement all of us for having a civilized discussion and not a flamefest like we usually do. It reminds me of the good old days of Consumerist before "Flame the OP" and all that other ugliness became the standard.

/cheers

One thing, I did notice is that taxes seem to be a minimal component of gas prices and have been declining over time. So all this talk of tax holidays, taxes being the primary problem, etc. is a bunch of grandstanding that will have little effect on the actual costs.

You may disagree with gas taxes, but they don't have much impact on the costs of gas.

@Wormfather: I agree with much of what you say, but it isn't pertinent to our discussion regarding the source of the costs of gas. Also shooting someone (even if non-fatal) doesn't help with the whole civility thing.

@Bladefist: We've discussed this before:
Speculation (some simply market, some caused by geopolitical uncertainity)
Weak dollar (casued by the Bush's Fed dropping interest rates in response to every problem),
China and Indian economies,
War in Iraq (Caused by Bush)removes oil from global supply.
Sabre rattling against Chavez and Iran (being done by Bush) contributes to speculation.

@ARP: Its all connected. The number one reason, without a doubt that we're paying more money for gas is because the dollar is weak, I mean need viagra weak, someone get give the diabetic some apple juice weak, milie vanili weak.

And that is because Darth Bernanke and Sith Lord Greenspan were not taken care of earlier.

@ARP: Oh and please, Bush's fed, there's a lot of things to blame him for but he had no choice but to pick Bernanke, Greenspan hand picked him and if you go against the fed your ass is grass especially because the Bernanke/Greenspan (who goes back way before Bush) tandem always have had a sypathetic ear to WS execs who wanted nothing more than to save their ass for another week or two. There have been so many chances to clean up wall street but letting them sit in their own filth but no neither of them have had the balls to do it.

I blame the parents.

@jscott73: There's two ranges on the Y axis there. The left side is the percentage of the price, which applies to the Oil, taxes, refining, and marketing lines. The right side is straight-up cost, which applies to the Price/Gallon line.

I really wish more people could be exposed to information like this and actually comprehend it. Maybe we would get less ignorance like what Skokieguy is spouting. The margin on gas has always been small and the reason the oil companies are making large profits has nothing to do with them 'gouging' you on gasoline. It's all about the price of crude oil.

i just remade the graph, stacking the actual cost of each segment (figured from total prices and percentages) to come up with something that is more legible. my chart is quick and ugly, but i think it's much more useful than the one above (dual variable axes are useful when showing a correlation between two factors which are measured differently, but this is not the case with a total price and then percentage breakdowns).

[www-personal.umich.edu]

ps, what's the code for posting links on this board?

@SportsCentre: @Bladefist: Agreed. I find it hard to believe that oil companies have all of a sudden got so greedy. I had this arguement with my Father the other day. I asked him to think how much money goes back into the company itself in the way of stations and workers. True, profits may be up, but that is only b/c demand is up. If a gas company made .04 cents a gallon profit, if they sold more, they would make more. But in selling more, a whole lot of other costs get factored in. His main complaint to me was that the stations around his house charge different prices. They're all owned by the same guy apparently. So I asked him how is it BP's fault if some guy charges more and people buy it. It's his stations.

Currently around $9 a gallon in central Europe.
The breakdown's here:
[youmustbefromaway.blogspot.com]

I see that "The Speculators" are the new villain in the gas/oil price saga. But what they do is actually rational and helpful towards society.

The speculators are betting on oil going up, so they're buying up the commodity. Doesn't this make sense? If you saw gas below $4, I'll bet dollar-to-donuts you'd tear right into that station and fill up the tank, you nasty speculator. That's because you believe that the price is going to go up. You're buying NOW so you'll have more LATER but at a lower price than it would be in the future.

Price controls the supply of everything. These speculators are buying up futures contracts because they're confident that supply is only going to shrink in the future. It's not irrational. The US certainly isn't going to expand it's oil supply. And demand across the world keeps increasing.

But what if they're wrong? What if supply goes up and the price falls in the future? Well then the evil greedy speculator is going to get soaked when the price bubble pops. These speculators are either ensuring there is enough of the commodity in the future, or absorbing the risks if their bet is wrong.

The only "villain" here is government intervention preventing expansion of supply. The price is reaching a point where it may be profitable to explore more and expand refining capacity. But it won't be permitted. None of the US candidates for president have any interest in this. Congress doesn't have much interest either.

I believe that Joe Random in his Lincoln Navigator daily driver that gets 9 mpg (or lower) in the city is also to blame, as are the CAFE 'standards' that let auto manufacturers get away with not producing more efficient engines for years.

@EBounding: Is that in essence the whole end of the movie "Trading Places"? I still can't/don't understand what happened at the end.

@Bladefist: I don't hate capitalism, but it does stick in my craw that an industry that makes record profits has been getting special favors from the government, in the form of subsidies, tax breaks, and private policy meetings with the Vice President. Capitalism means more than private profits -- it means there has to be a level playing field where the risk is also taken privately. Both the oil companies and the banking industry are very adept at manipulating our corrupt government so they can have it both ways -- privatized profits and socialized risk.

These are handy averages, though the tax hit is different from state to state. There's a set amount for the Federal tax, and then states set their own tax.

All the tax revenue is supposed to support road maintenance & construction, so I don't really begrudge the 37.5 cents per gallon fuel tax here in Texas.

@EBounding: <sarcasm> Yes, because speculators were so helpful to the internet dot.com sector and the housing sector. Surely we want some of that in the energy sector. Who wouldn't? </sarcasm>

@howie_in_az: Why would auto companies NOT want to make better engines? Most of the tree huggers have $$, so making a car that appeals to them and their smugness would bring in lots of money. I think the problem is even tree huggers don't "want" a car that gets great mileage b/c it doesn't fit their mental image of what a car is. I doubt we'll ever see a bunch of Gee Whizzes pulling up to the Oscars. It's not that cars get lousy mileage, it's that we use them more than we ever did. Back in the day, if a store was a mile away, you walked. Now, you drive. People don't do circular trips, they do star trips(go to one place, then home, then out again, etc..), which use more gas. I find MY shopping habits depend on what I'm doing. I will not buy something if it means I have to make a special trip as opposed to a side trip going somewhere else. Also, people don't use mass transit as much as they use to b/c it's seen as something lower class people do. I always have a little more respect when I see a "star" on Gawker taking the subway or walking in NYC as opposed to their West coast counterparts who drive more.

@Git Em SteveDave wants to come with Lindsay...to see Eddie: Actually, auto companies have been making better engines. But the improvements have been targeted at generating more horsepower to move big SUVs around or to get faster acceleration, not at fuel economy. (An average family car now sports a faster 0-60 time than most sports cars did 20 years ago.) Now that's changing because people are starting to demand economy instead of speed and size.

@Orv: Lets say I sold crackers. Everyone loves crackers they are so good, hell, Mrs. Hummer eats a case of em a day. But oh noberries, the stuff (we'll call if flour) I use to make crackers is running out. Well the cheapest (relativly) and most profitable thing I can do is find more of that flour and keep the party going ala jesus and wine.

But the federal government wants to look like they're into the issues so they want me to instead of finding more flour, spend my money to reserch using corn for my crackers. Well, if the govenment is going to ask me to do that they are sure as hell going to give me a tax break to curtail my losses as I have got some serious bosses who break fingers if profits are evar lower than the previous fiscal year's.

The end.

Curious about the 73% Crude Oil number, so could someone inform me?
Does Big Oil take a cut from that, or is that solely going into the coffers of OPEC? Does Big Oil own any oil? If they get a cut, for what and for how much?
That is, what's their business model regards everything from finding new reserves thru packing it in barrels (the latter meant figuratively, of course)?
Thanks!

@Orv: Don't forget most SUV's are built on car frames, and are mostly just a re-designed body, which is higher and boxier than it's car sibling.

@Trai_Dep: that 73% is the portion of the cost per gallon that it takes to purchase the oil from whomever they've purchased their contracts from. So that is the "raw" material. To refine that crude into gas, costs about 10% of the price per gallon.

Today on the radio, Thom Hartmann said if we (the US) bought gas with Euros instead of dollars, gasoline would be around $2.12 a gallon.

Randi Rhodes said that 60% of the price of gas is speculation. Like I'd trust the freaking DOE to come out with accurate numbers.

@ltlbbynthn what you mean is gas would be 2.12EU, not dollars.

@Wormfather: You left out the part where you get a sweetheart deal to obtain flour from government land without paying much of anything in royalties, while irreplaceably depleting the soil. Or something. The analogy gets a bit strained at this point, because it's really not a very good analogy.

I don't know where everyone lives but in Texas everything is all spread out. If you don't live in a big city you can't walk to anything. We have terrible public transportation. About the only thing within walking distance of my neighborhood is a gas station.

@Git Em SteveDave wants to come with Lindsay...to see Eddie:
The Wikipedia article explains it rather well.... which I find amusing because it takes an Eddie Murphy film way too cerebral than it's due.