Saturday, April 30, 2011

Oil Producers or government: Who is "gouging" Whom at the Pumps?

J.B. Williams (Written during the previous administration, but an excellent lesson in economics.)  "But the fact is, the gross profit margin for a gallon of gas in America today, is what it has always been, on average, .08 cents per gallon, (2.5% at $3.00 per gallon). Though retail gas prices fluctuate with crude prices and supply vs. demand, the gross profit margin per gallon remains roughly the same at all times. (No evidence of price gouging here.)
"However the federal government profits approximately .59 cents per gallon through gasoline taxes, 7 ½ times or 750% that of the oil producers themselves and 20% of the price at the pumps. Pay attention here, Washington liberals are attacking oil companies for their 2.5% gross profit margin, while Washington is profiting 20% per gallon. Democrats answer? Tax some more?
"If oil companies cut their profit margins by 50%, it would drop the price of a gallon of gas by only .04 cents per gallon. If Washington law makers cut their take by 50%, gasoline would cost .30 cents per gallon less."
"Based upon a $3.00 gallon of gasoline, the average break-down is as follows."
Gasoline Retailer $.01 cents per gallon
Oil Company $.08 cents per gallon
Refining $.29 cents per gallon
Marketing/Distribution $.32 cents per gallon
Taxes $.59 cents per gallon
Cost of crude $1.71 per gallon (delivered)
"Who is gouging who? "
Political Cartoons by Michael Ramirez
http://townhall.com/political-cartoons/michaelramirez





 
 
 
 
 
 
 
 
 
 
 
 
  

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