GAS $3.12 a gallon

[fielderLS3]

Originally Posted by PsychoRS

I find that hard to believe that oil companies have a low profit margin when they consistently report making BILLIONS of dollars more in profit than previous years!

Maybe the oil industry is weak in the U.S. right now due to economy and the fact that we haven't built any new refineries in this country in decades and drilling permits are hard to come by, but the oil industry is far from hurting as bad as other industries.

Never said the oil industry was hurting. But it is a fact that they have a much lower margin than most industries. I believe it is about 6%, which means roughly 20 cents a gallon at today's national average. The government takes 2-3 times that at the pump depending on the state, and that is just at the pump....doesn't even include royalties.

Any yes, they are making billions despite their low margin, because their volume is very high. My question is, why do you have a problem with that? Is there something inherently wrong with a business operating at a profit margin of 6%? (For most business, it actually would be, because 6% would be considered very low).

And if they weren't making billions, where exactly would next year's oil come from? You think going 100 miles out to sea, and drilling in 2 mile deep water, and then going through several more miles of bedrock....or fracking shale a mile or more deep in the earth can be done on the cheap? If these companies weren't making billions, how could they make the billion dollar investments necessary to continue producing?

Originally Posted by Trailbreaker77

What's so funny? I don't see the joke.

Originally Posted by JohnnyBfromPeoria

Low profit MARGIN. High volume. You don't need to make 10% on every sale when you're selling so much.

All you crying about how much oil producers make should just go out and find, then bring your own crude oil to market and you'll be right there with them. Easy right? What could be simpler? Let's see, just need some pipe and a drill of some kind...and some way to figure out where to find crude oil...and some way to transport it...and permission to drill where I eventually find it...and, and , and...

John B.

[HESK_84]

Over here is 4.15 ish, saw 3.99 in an Arco gas station today...

Missing the good old days in Texas with 2.50/gal... sniiif!

[fshog]

Originally Posted by Caswell239

Okay so there's 3.785liters in one gallon . At 4.39 a gallon it's 1.16 a liter. We are paying 1.249 for reg and between 1.389 a liter for premium. That would be equivalent to 5.25 a gallon.

Thank You Caswell239!! Isn't it ironic how we are paying the some of the highest prices in North America, yet refineries are on our doorstep!! Our American friends are sooooo lucky at the prices they seem to be paying!!
Welcome to Oil Country!! (and taxes).....nice side is atleast our economy didn't get flushed down the toilet....as we seem to have our own little micro-climate regarding the economy!

[Brutal SS]

A drop in gas prices should not be a surprise to anyone who knows that it is election year.

[PsychoZL1]

Unfortunately, gas prices have not dropped by me. Prices have stayed about the same since Memorial Day weekend. :( Not to mention gas prices are almost where they were back in 2008, before they lowered for the election.

I have a feeling the prices aren't going to go down too much.

My question is, why do you have a problem with that?

I never said that I have a problem with how much the oil companies make. My problem is that they drive up the price for gas even when the price per barrel is down. Crude was well over $120/ppb ~4 years ago when fuel prices were at an all time high; crude is currently at ~$82-$92/ppb, so what gives?

High cost of gas in turn drives up the cost of living all while all low-class and middle-class citizens' paycheck stays about the same and the prices are even higher in other parts of the Americas, even higher in Europe and Asia, and the Mideast; well, they are enjoying gas prices that we enjoyed ~15 years ago!

[crateish]

When Bill Clinton left office, gas was $1.46 a gallon. The next guys' buddies rigged the system so that we will never have cheap gas again.

Oil companies are making their biggest profits ever and still get massive welfare assistance from we the taxpayers.

Mission Accomplished.

[fielderLS3]

Originally Posted by PsychoRS

Unfortunately, gas prices have not dropped by me. Prices have stayed about the same since Memorial Day weekend. :( Not to mention gas prices are almost where they were back in 2008, before they lowered for the election.

Gas has fallen for most of the country though. A lot of the western states have been having serious supply issues, and I suspect some of that is spilling over from the coast into Nevada and Utah.

And the 2008 price collapse had nothing to do with any election. The economy collapsed, and the price of oil, which was in a bubble the summer before, burst at the same time.

Originally Posted by PsychoRS

I never said that I have a problem with how much the oil companies make. My problem is that they drive up the price for gas even when the price per barrel is down. Crude was well over $120/ppb ~4 years ago when fuel prices were at an all time high; crude is currently at ~$82-$92/ppb, so what gives?

But gas is cheaper than in 2008. Nationwide, its about 50-60 cents cheaper on average. And again, gas in a large part of the country follows the Brent price, not the WTI price. Today, Brent is $15-20 a barrel higher than WTI. In 2008 when WTI was touching 147, Brent was $10-15 a barrel cheaper.

Also, oil and gas are world-wide commodities, whose prices are set on open markets. The oil companies here have very little if any influence on the price. If they did, do you really think they'd only be making a 6% margin?

Originally Posted by PsychoRS

High cost of gas in turn drives up the cost of living all while all low-class and middle-class citizens' paycheck stays about the same and the prices are even higher in other parts of the Americas, even higher in Europe and Asia, and the Mideast; well, they are enjoying gas prices that we enjoyed ~15 years ago!

No disagreement. Factually, that's correct, but what exactly do you think should/can be done about it? Its "high" in Canada and Europe because of draconian taxation. It's "cheap" in the Mideast because of huge subsidies. I use "high" and "cheap" in quotes because it is not actually that much higher or cheaper in those places. It just appears so to the consumer because governments are manipulating the price. The actual cost for the product itself does not vary nearly so much, regardless of what the end user is actually paying at the pump.

I reiterate, the oil industry has about a 6% margin. The idea that they are pocketing the entire increase in price since the fall of 1998 when I saw it selling for 75 cents in one place is ridiculous. If the oil industry made absolutely NOTHING, the price would only be maybe 20 cents a gallon lower, but not for very long, because they'd do out of business, and than there really would be a supply problem.

Originally Posted by crateish

When Bill Clinton left office, gas was $1.46 a gallon. The next guys' buddies rigged the system so that we will never have cheap gas again.

Oil companies are making their biggest profits ever and still get massive welfare assistance from we the taxpayers.

It's important at this point to point out that the oil industry is the largest net tax payer in the history of the world. Oil companies pay more to the treasury than they actually keep in profits. I also restate from an earlier post that in March of 2009, I paid $1.49 a gallon, LESS than in 2000 adjusting for inflation.

To make my point, I offer the below "argument" (which I'm not suggesting in any way is actually true) that sounds a lot like the various statements I've quoted above, except with just a couple of key words changed.

.....GM is an evil, corrupt organization that is using its influence and colluding with its competitors to drive up the cost of cars. It must be because the price of a Camaro and Mustang are going up at the same time. Clearly they, and all the other car companies in the world are not competing, but are holding secret meeting and agreeing upon a set price for all cars sold in the country.

GM is making its biggest profit ever after getting massive welfare assistance from the taxpayer. In 2000, a new Camaro with a V8 was $21,500, but now the system is being rigged so that we will never have cheap cars again. Despite wholesale steel prices falling in the last month or so, we have not seen one penny reduction in price at the lot. GM is hurting the lower and middle classes, which has no choice but to buy cars at inflated prices, because they must drive to work.....

Now, the above two paragraphs are clearly ridiculous, and everyone here would laugh at anyone who seriously believed such things as a crackpot. And yet, many people really do buy the same conspiracy argument when the names of car companies and term car are switched for the names of oil companies and the term gas. And for the life of me, I do not understand the logic behind it.

EDIT: Also, I think this has been a fairly productive and civil discussion so far. Can we try to keep some of the overt politics out of it so it doesn't get shut down?