The cost of gasoline...

There's a pie chart at the local pumps in Ontario. Ill try to get another look at it, one day.

not facts yet

I don't have all the facts yet but can give you some good guesses and some quick research, as I follow these things a bit.

First, taxes are very high, and the true windfall profits being made right now are by the states who levy taxes as a % of prices. gasoline taxes by state This data includes the federal taxes. In 2002 those rates were between 30 and 50 cents per gallon. But, those taxes are actually much higher now IIRC, due to them not being levied as cents per gallon but as % of sales. What were gas prices in 2002, I'm not sure, but if it was near $1.60 per gallon that is 24% to taxes, at 38 cents tax, near the midpoint.

Profits on gasoline are pretty small, think it is something like 4% or so. I found article on retail margins which says that retail profit is usually 8 cents per gallon, though there was both profit and losses during the time after Katrina shut down refineries. 8 cents per gallon, on gas last year at, what $1.60 or so, is 5%, so my guess is pretty close.

Refined product prices bounce around a LOT, market forces are at play and there are Wall Street speculators who buy contracts at one price and hold them just to sell at a profit later (this happens is all commodities, pork bellies/bacon, orange juice, sugar, copper, uranium but only oil speculation gets people angry). Fortunately the investors do get burned from time to time, not always making a ton of money. This morning contracts are at $158 which I think is $1.58 per gallon. Down from something like $2.20 at the top I think.

Transportation to the pumps is probably not that big an expense, I'd guess you can get a delivery for a few hunderd dollars, and a tanker holds, what, maybe 1000 gallons of gasoline (I have no idea!) so you may add 20 cents to the cost, if that.

You know that the reason all the gas stations sell soda and junk food is that this is where they make the profit, with 100 to 200% markup, not in the gasoline. That 4 -5% margin on gas is no better than the grocery store makes on food, and the risks from robbery, explosion, and groundwater contamination are much higher.

Yes, I hear the drumbeats of legislators calling for windfall profits tax again. Just remember, if you want less of something, you tax it. Be careful where they put the taxes, additional taxes at the pump will discourage consumption, additional taxes at the well will discourage production.

I've long wondered when US fuel prices would approach a world norm--and it's not happening yet.

Of course, I am really ticked that local gas prices went up just as high as the prices in Colorado, where the tax is ~8 cents higher. Normally, we're 8-10 cents cheaper per gallon, but all the stations went right up to the same prices you saw in Denver. Ridiculous.

A little off topic from joes question, but the ploy carried out this summer has worked. With prices then getting up near $4 a gallon, now we see $2.50 and go "wow what a deal". I seem to recall quite recently when $2.50 was considered a rip off :huh:

:laugh: :laugh: Same thing here!

Last July, we were in Yellowstone. We refused to fill the truck up before leaving, because they were ripping us off--$2.35/gallon, diesel. We knew it would be closer to $1.99 just an hour away, so we put in $5 to make sure we made it to the next town over.

Now, we'd be thrilled to pay $2.35 for diesel! But, it's getting closer...Think $2.45 can be found if you look. Still absurd that diesel is higher priced than regular, though.

There is sumthin fishy ( ) about that isn't there?! I remember when I was about 16 and playing the original Sim City, you could get the "people" to cheer you by tripling the taxes, then lowering them slightly. I thought it odd that people in real life were fooled by the same trick with gas.

Now it has just become a yearly irritant. Not the hike in prices followed by the the slight decrease, but the short attention span of those who get up in arms about the hikes. Every summer, like clockwork, gas prices skyrocket, people get all angry, demand the government do something, whine about the "tax on tax" that results in a 2 cent per litre increase, and accuse the gas stations/petroleum people of collusion (of which I have no doubt). Then prices drop nominally in the fall to a level still well above the initial price and all's good again. People forget about the fact that the petroleum folks have effectively increased the price of gas another 10 cents per litre.

Kas, don't forget that "retail profit" (which I think is around 2% according to the little pie chart) is completely different than the profits made by the mother company. Also, percentages are misleading, they're relative numbers and have no real basis on reality or absolutes.

That said, I've no real objection to increasing gas prices. Despite the increase in gas prices, sales of SUV's continue to increase. I consider the cost of gas a necissary evil if one wants to drive. Yes, it also increases to cost of goods, which is unfortunate, but perhaps this is where the government should be spending some of those increased tax dollars from increased oil prices - supplementing the cost of transporting necessary goods like food.

It would also be nice to see municipalities (possibly in partnership with Provincial/State governments) begin to invest more in better public transit. Let's face it, if you choose to live outside the city, rush hour is a PITA. There's no good reason why we can't provide much better public transit from major suburbs into city centres. But perhaps I'm an idealist...

This summer has been an experiment in bike commuting for me. So far so good. I hate the days I have to drive now. But a bike lane sure would be nice so that I don't have to avoid almost getting run over each day. On the other hand my reflexs are getting better.

public transit

I would like to see a tax put on at the state or local level that went completely toward improving mass transit, adding bike lines, providing discount parking rates to commuter vehicles. As prices at the pump decline, as they will, it would be so easy to pump up the tax rate. Everyone will blame it on the oil companies and so the government gets off scott free.

Around here they started a "trial" express bus that only makes 3 stops between its terminal and downtown, has a dedicated lane and light, and has free parking for 200 cars. They expected that if all went well that they might have to expand the parking lot next year, they were wrong, after a few months they needed to start looking into acquiring more land. I'd really like to see more of the like, it's a very efficient way to get into the city, it's faster than driving, and less frustrating.