Gas Prices [Merged Threads]

[SteveL]

The bad news is I have to use premium.
The good news is I get 30 mpg.

[Michigander]

As of this morning here in our little town of PORT HURON MICHIGAN the price for reg. unleaded gas was $3.65. At this point I'm ready to quit my job, because I can't afford to put gas in my Uplander to get to work. My family only has 1 car and we make sure to combine trips to help save gas. This killing us!

[disneydrmr]

Someone please correct me if I"m wrong - but doesn' t 'the law' state that gas prices can not be changed until a shipment of gas is recieved? Yesterday EVERY single gas station in our area increased to $3.49.. you can not tell me that EVERY single gas station recieved gas on that exact day all within about an hour of each other? And isn't our president's family wealthy from OIL???? Forget the "Do not buy gas" for a day - oil companies know that sooner or later we have to fill our cars... I believe the only thing that might make people take notice is if we all stop spending our money... get other industries behind us... stop going to movies/renting videos - see how quickly Hollywood jumps on the bandwagon.. stop eating out.. stop buying all the 'extra' things we all buy... you know the other industries will stand up and lend their voices when they stop recieving a piece of the 'profits'.

[caryrae]

At some point somethings got to give. Some company that use vehicals alot will do something, like all the semi drivers. If they all decided to protest and stop driving for a while it would screw up alot of things. I kinda hope they do. If stores all over the country can't get merchandise maybe something would be done about the gas prices. As long as nobody does anything about it why would they not keep raiseing gas prices.

I just don't get why the gas companies what to screw the people in there own country. As gas prices get out of control so will the prices of other things like groceries, delivery services, taxi service, bus service, ect then most of us will not be able to afford to anything.

If you use the speedy rewards card from Super America, they used to give to 10 points for every $1 of gas you got now they give you 10 points for every gallon of gas you get. I suppose cause the points add up fast with gas prices this high.

[2Epcot]

Gas prices didn't really affect me too much, because I lived so close to work. Now that I've moved down to Orange County in CA, my monthly gas expenses have gone up x4. I'm also trying to figure out what I will replace my 10 year old SUV with in the next year or so. The obvious money saving answer would be a small car that gets good gas mileage. Unfortunately I hate small cars, I don't feel safe in them, and you have limited visability on the road when you sit so low to the ground, compared to when you can see over at least half the cars on the road. Prices here are ranging from 3.35 to 3.65 per gallon, depending on where I buy. Toyota HIghlander Hybrid seems like a good compromise, though I hear mixed comments on how much gas you really save.

I've never understood why gas prices go up, when they think their could be a shortage, and not when their actually is a shortage. It always seems they are looking for any excuse at all to raise prices. Overnight, they will shoot up, but it always takes so much longer for them to come down.

[Belle619]

Thankfully, I too live close to work - but prices here were around $3.66 last week and I'm almost afraid to look at the signs to see if the price has gone up!

[magicman]

The institution that makes the biggest "profit" (for doing absolutely nothing) per gallon of gasoline is the government with the taxes that are charged on each gallon pumped. This is the one item that is directly in the control of our country, and it should be the first option for reducing gas prices (followed by the second solution which is reducing restrictions on the building of refineries so that supply can be increased [which of course all free enterprise believers know is the solution ]).

[caryrae]

Let's look at where your money goes when you pay for gas:


Crude oil - The biggest portion of the cost of gas -- as of February 2006, that's about 59 percent -- goes to the crude-oil suppliers. This is determined by the world's oil-exporting nations, particularly the Organization of the Petroleum Exporting Countries (OPEC), which you will learn more about in the next section. The amount of crude oil these countries produce determines the price of a barrel of oil. Crude-oil prices averaged around $37 per barrel (1 barrel = 42 gallons or 159.6 L) in 2004 (Source: U.S. DOE). And, after Hurricane Katrina, some prices were almost double that. In July 2006, crude-oil prices averaged around $72 per barrel (1 barrel = 45 gallons or 159.6 L).
Sometimes, gas prices go up even though there is plenty of crude oil on the market. It depends on what kind of oil it is. Oil can be classified as heavy or light, and as sweet or sour (no one actually tastes the oil, that's just what they call it). Light, sweet crude is easier and cheaper to refine, but supplies have been running low. There's plenty of heavy, sour crude available in the world, but refineries, particularly those in the U.S., have to undergo costly retooling to handle it.


Refining costs - The refining of crude oil makes up about 10 percent of the price of gasoline. To learn more about oil refining, read How Oil Refining Works.

Distribution and marketing - Crude oil is transported to refineries, and gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transportation is passed along to the consumer. Marketing the brand of the oil company is also added into the cost of the gasoline you buy. Together, these two factors account for about 11 percent of the price of gasoline.

Taxes - Taxes, including federal and local, account for about 20 percent of the total price of gas in the United States. Federal excise taxes are 18.4 cents per gallon, and state excise taxes average 20 cents per gallon. There may also be some additional state sales taxes, as well as local and city taxes. In Europe, gas prices are far higher than in America because taxes on gas are much higher. For example, gas prices in England have risen as high as $6 per gallon, with 78 percent of that going to taxes.

Station markup - While it isn't represented in the diagram above, of course some of the actual money you spend at the pump does go to the service station. Service stations add on a few cents per gallon. There's no set standard for how much gas stations add on to the price. Some may add just a couple of cents, while others may add as much as a dime or more. However, some states have markup laws prohibiting stations from charging less than a certain percentage over invoice from the wholesaler. These laws are designed to protect small, individually-owned gas stations from being driven out of business by large chains who can afford to slash prices at select locations.

[Disney Doll]

I think all the price problems could be solved if a little more of the profits were reinvested in the company instead of the CEO's pocket. Have you seen how much these executives make!? Meanwhile, our most vulnerable (the working poor) can no longer afford to drive to work, never mind the increase in groceries due to shipping cost increases. It's annoying to me, but I feel really bad for those people who are less fortunate. This extra cost in gas could be a huge part of their monthly budget.

I don't buy any of the excuses. I think the oil companies will charge whatever they can get away with. Isn't that the old rule of supply and demand. Demand isn't going down anytime soon so I'd expect to see these high prices around for a while. Boy am I glad I drive a Honda Civic.

[Riri529]

The other day I paid $3.25! I drive from site to site for my job and the gas prices are killing me!

[MickeyandTink]

I think all the price problems could be solved if a little more of the profits were reinvested in the company instead of the CEO's pocket.

I'm not sure it would solve all the problems, but it surely would help if the oil companies were reinvesting their huge profits in expanding refining capacity and less on 8 and 9 figure bonues to the CEO's and other corporate big-wigs.

I also find it hard to swallow that it's all OPEC's fault gas prices are so high when the refineres, which are controlled by the oil companies, are making record profits.

[Ian]

I hate to say it, but despite their protests the contrary, it really is largely the fault of the oil companies.

They're pocketing mongo profits (and, in fairness, passing a nice chunk of change onto their shareholders in the process) and not reinvesting a single penny in new refining capacity.

This is (allegedly) what's driving the prices up is the lack of refining capacity, yet Big Oil has not built a single new U.S. based refinery in close to 30 years.

Look, I'm as free market as they come, but if you artificially reduce supply in order to drive prices up, that's not really a free market. The truth is, oil prices are currently such that we should have much cheaper gas than we do. Big Oil is purposely keeping supply low by stubbornly refusing to increase refining capacity and, IMO, Congress needs to do something about that.

And let me stress again ... you rarely will hear me call for the government to get involved in private enterprise, but gas is different. That's a mission critical commodity that needs to be available to all for a reasonable price.

[SteveL]

Perhaps the oil companies haven't built any new refineries because if they wait long enough, they know that the taxpayers will end up paying a huge chunk of the cost.

[Pongo]

Mid grade today was $3.55. I am so grateful that I carpool.

[Brian]

This is (allegedly) what's driving the prices up is the lack of refining capacity, yet Big Oil has not built a single new U.S. based refinery in close to 30 years.

Do you really think that the oil companies don't want to build more refineries? Or could it be that our government and its environmental policies have prevented new refineries from being built? Do some research and I think you'll be amazed at what you find.

I think our government is more to blame for this problem than the oil companies.

[poohluva]

depending on where you go regular is between 2.99 and 3.05 and premium is up around 3.31

[pogo]

I think our government is more to blame for this problem than the oil companies.

I disagree with this. This is an International thing, not just the U.S.

There is a shortage of Crude Oil happening in the world right now as we speak. With the modernization of China and India, a lot of crude oil is being diverted to these countries for refining to meet their increasing need because it is worth more there than it is here. This puts the U.S. at risk as the crude oil supplies are spread out world wide.

I'm almost embarresed to say I only paid $3.04 just today.

[Ian]

I think our government is more to blame for this problem than the oil companies.

You'll get no argument from me there.

One other very interesting thing to mention here. Part of the reason for the increased demand is socialism and communism in South America and China.

The governments there subsidize gas prices so residents can buy gas for like 35 cents a gallon or something absurd like that. At those prices, and with surging populations, they're chewing through gas like never before. By monkeying with the free markets, those governments are causing shortages.

And who's paying the price? You guessed it ... us ...

[Brian]

I disagree with this. This is an International thing, not just the U.S.

There is a shortage of Crude Oil happening in the world right now as we speak.

There is no doubt that international supply and demand plays a part in the price of gas. However, the current problem isn't the international supply as much as its the lack of refining capacity in the U.S. If you take a look at the current price of a barrel of oil, it is lower now (~$64) than it was at the end of last summer (~$75). However, prices at the pump are much higher now than they were last summer.

[Scar]

Valero down the street from us (central NJ) just went down .02 yesterday from $2.899 to $2.879.

NJ has one of the lowest gas taxes in the country. Of course, everything else is the highest in the country