Will gas prices ever come back down?
03-11-2008, 03:55 PM
#31
First of all, I'm sure you know that a barrel of crude oil makes a heck of a lot more than just gas. I believe one barrel of oil makes around 20 gallons of refined gasoline. However, it makes a ton of other stuff we use in our daily lives.
Think about this: How is the oil getting to you? Gas doesn't just appear in gas stations. It has to be transported, a long way. Higher gas prices=higher transportation costs which means less profit for oil companies. There's tons of other factors such as refining oil costs, marketing costs, etc.
I realize that competition what sets prices, however, how do explain how the companies who only refine oil are making money as well? I believe it is Valero(it may be someone else so forgive me) that only refines oil rather than produce and refine. How do you explain how they're still in business? They are buying crude oil from others rather than drilling it themselves. If exxon or sunoco really wanted to, they could just drop their prices and put valero out of business. It doesn't work like that though. Oil companies aren't controlling the cost of gas.
Think about this: How is the oil getting to you? Gas doesn't just appear in gas stations. It has to be transported, a long way. Higher gas prices=higher transportation costs which means less profit for oil companies. There's tons of other factors such as refining oil costs, marketing costs, etc.
I realize that competition what sets prices, however, how do explain how the companies who only refine oil are making money as well? I believe it is Valero(it may be someone else so forgive me) that only refines oil rather than produce and refine. How do you explain how they're still in business? They are buying crude oil from others rather than drilling it themselves. If exxon or sunoco really wanted to, they could just drop their prices and put valero out of business. It doesn't work like that though. Oil companies aren't controlling the cost of gas.
Transportation costs- Sure they are higher if they were paying what the general public pays for fuel. Do you honestly think those tankers burning diesel fuel pay 3.56 a gallon like I did to fill my truck up? NO. Next like I said the oil they are selling atleast in some part is from reserves that had a lower purchasing price but they are charging more for it. That part isnt as big a deal to me as goods value is not determined by its purchase price but its replacement value. Where do you get off with marketing costs? Since when does an oil company need to market to get people to buy gas? That marketing cost sure as hell hasnt risen in the last 5 years. Sure refining costs have gone up but its cost curve is no where near the steep curve gas prices have taken.
As far as the none producing companies are concerned, its just like the concrete companies here in Austin. There are companies that dont have their own batch plant and actually get batched at a competitors facility, how does that work? Simple, the company that isnt the "producer" just the reseller doesnt incur all the costs that the producer does with its facilities, and needed man power even though they pay a higher price per yard of concrete some of the producers costs are passed on to them but not all.
Here is a link to what is made from a barrel of crude oil
http://www.eia.doe.gov/kids/energyfa...wable/oil.html
So yes other stuff is made but the other stuff is irrelevant to our price at the pump, the amount of gasoline from a set quantity of crude oil remains the same. Therefore that amount is constant therefore as far as pump prices go it doesnt matter whether the remaining 22 gallons of crude oil is turned into grease for fat ladies to get their jeans on or road tar.
03-11-2008, 03:59 PM
#32
I second guessed myself so I went and looked at the breakdown of exxon's shareholders. The majority of the top 10 institutional holders and top 10 mutual fund holders are all American.
It's always nice to assume oil companies are evil. The fact of the matter is that the head members are very similar to retail salesmen. However much they sell determines how much they make.
It's always nice to assume oil companies are evil. The fact of the matter is that the head members are very similar to retail salesmen. However much they sell determines how much they make.
With that said Im done arguing with you, I have posted links and factual information backing up my stance, if you feel you are more intelligent then me and know more about it then great but arguing with you all day on here is getting nothing accomplished. I have a feeling once you take your economics/government classes in school all this will make much more sense to you.
If you are really bored I can PM you some links to some threads on another site where people who know even more about this subject have posted providing more insight into the problem with gas prices today.
03-11-2008, 04:05 PM
#34
The link I posted obviously went against what you said, and there are more where that came from thus the comment about you needing to read up further on the subject. On the education thing, all of what I talked about are simple economics and government politics all of which were discussed in my classes thus I said it would make more sense to you once you went through them you would have a greater understanding of how the world economy works. Its nothing personal, I know you, you are a good guy, and argumentative just like me when you feel you are right. Everyone has a right to their own opinion but when you keep questioning facts that I have posted with your thoughts it gets kinda old thus I am/was annoyed by this tit for tat conversation we are having.
03-11-2008, 04:10 PM
#35
The link I posted obviously went against what you said, and there are more where that came from thus the comment about you needing to read up further on the subject. On the education thing, all of what I talked about are simple economics and government politics all of which were discussed in my classes thus I said it would make more sense to you once you went through them you would have a greater understanding of how the world economy works. Its nothing personal, I know you, you are a good guy, and argumentative just like me when you feel you are right. Everyone has a right to their own opinion but when you keep questioning facts that I have posted with your thoughts it gets kinda old thus I am/was annoyed by this tit for tat conversation we are having.
I'm glad you posted links to your argument, however that first article was almost 3 years old, and most of it was redundant information. I'm not going to change my opinion based on 3 sentences out of context in a dated publication.
03-11-2008, 06:06 PM
#36
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i've finished college, i'm a robotics engineer, and I still think this is ridiculus.
Note: this picture is actually a hotel in the UAE, but i've seen these oil sheiks homes easily comparible to this. something isn't right. and its not just a rough economy...
03-11-2008, 06:36 PM
#37
No doubt the middle east is raking us over the coals with oil prices at 108 a barrel. Alot of you are not taking into account India and China and their economic explosion. In 15 years China will have and interstate system 3 times bigger than ours. They will also have the cars to create traffic jams that will make ours look like a walk in the park. Another factor is the number of refineries. There are fewer today than there were in the 70s. Thanks to the tree huggers. The tree huggers have also blocked legislation allowing us to drill for oil in Anwar and off the coast of Florida. And no one has responded yet to the fact that the government makes 5-6 times the amount of money as the oil companies do on a gallon of gas. If any of you are so concerned about gas sell your gas guzzlers and buy a shoebox hybrid otherwise quit bitching about your pu$$y hurting.
03-11-2008, 06:54 PM
#38
Numbers for those who like to see current facts.
http://www.madehow.com/Volume-2/Gasoline.html
http://www.newton.dep.anl.gov/askasc...9/eng99288.htm
$109.00 per 42gallon barrel
http://www.ctv.ca/servlet/ArticleNew...hub=TopStories
$2.595 per gallon of crude.
Price of gasoline in your town?
How much is left for profit after fuel taxes are taken out?
Let's do the math and see who's getting what from our pockets.
Then hunt them down if that's what you want to do that is.
Numbers on gasoline taxes vary, who can find what the federal amount is?
http://www.madehow.com/Volume-2/Gasoline.html
http://www.newton.dep.anl.gov/askasc...9/eng99288.htm
$109.00 per 42gallon barrel
http://www.ctv.ca/servlet/ArticleNew...hub=TopStories
$2.595 per gallon of crude.
Price of gasoline in your town?
How much is left for profit after fuel taxes are taken out?
Let's do the math and see who's getting what from our pockets.
Then hunt them down if that's what you want to do that is.
Numbers on gasoline taxes vary, who can find what the federal amount is?
Last edited by TG02Z71; 03-11-2008 at 07:03 PM. Reason: added info
03-11-2008, 07:22 PM
#40
This link does not give the amount of tax per gallon, but it does show how much the government makes vs the oil companies. Keepin mind the oil companies have to reinvest alot of their profits for exploration and recovery of new oil. They take all the risk while the government reaps most of the rewards. And then you have an idiot like Hillary running for office that wants to take all the oil company profits. They are already taking most of them.
http://www.taxfoundation.org/news/show/1139.html
Here is a link that shows Federal tax on gas. I stand corrected it is not 50-60 cents per gallon. It is 18.4 cents per gallon. Roughly double the profit that the oil co. makes.
http://www.sddot.com/geninfo_fuel.asp
http://www.taxfoundation.org/news/show/1139.html
Here is a link that shows Federal tax on gas. I stand corrected it is not 50-60 cents per gallon. It is 18.4 cents per gallon. Roughly double the profit that the oil co. makes.
http://www.sddot.com/geninfo_fuel.asp
Last edited by quicksilverado; 03-11-2008 at 07:32 PM.