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Look at the April 6th date and add together the Distribution cost/profits and the Refinery/cost. It comes out to be $.64 which is 24% of the cost of a gallon of gas. If one completely eliminates that entire cost/profit from the total cost it leaves a gallon of gas at $2.10. And if one takes the the taxes out of the equations, then it is just 1.54 which is the cost of a barrel of crude oil. so in reality, if my car could actaully burn pure crude oil and there were no taxes, gas would still be costing me $1.54 a gallon. Let me start over and be realistic. Look at the April 6th date again and add together the Distribution cost/profits and the Refinery/cost and pretend that it is all pure profit (basically in this scenario it costs Exxon nothing to get it to the pump at your local gas station). If Exxon was making $.64 on every gallon of gas, this would still only be a 24% profit margin. While this number is good most companies strive for a much higher profit margin. Here is a list of some companies and their profit margin. Earnings, Revenues, Profits (Billions) for selected companies, recent quarter, 2005 Source: Bloomberg News, reported in AAPG Explorer Dec. 2005
I think that this graph really shows what is going on. Exxon, Chevron, and ConocoPhillips are/were not gouging us in 2005. If they were not gouging us then they are either lying about their profits or they didn't gouge enough to really change their profits. I don't begrudge any of these companies for making a 7% to 11% profit margin. I believe that the reason that these companies are doing so well is because no one is slowing down when it comes to purchasing gas. Exxon is making huge profits because people are buying the gas. The economy is good, so everyone is living their lives despite what the prices are. I guess I get a little ticked when the media and the "everyman" thinks that the entire reason that gas is so high is because of money grubbing companies. While this may be true to an extant, I am pretty sure that the price of crude oil is the most determining factor in the price of gas. OPEC is made up of 10 countries, all of which does not include USA, Australia, or Russia (large oil exporters amd producers of oil). These are the people who truly determine the price of gas. When the price of a gallon of gas is 56% dependent (in this chart, in this state, and on this average price for one day out of many days, but look at the links after this rant and you will see a very noticeable trend in prices, profits, and costs) on the price of crude oil, I believe it is obvious to see which part of the pie is the most influential. http://www.energy.ca.gov/gasoline/margins/index.html http://www.westchestergov.com/consumer/GASOLINE/BREAKDOWN2.htm http://www.toma.org/gas_prices.html http://www.gravmag.com/oil.html http://www.opec.org/home/ (umm .ORG?) <--- http://en.wikipedia.org/wiki/OPEC |
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