Crude oil price as of last Friday was $75 a barrel, 42 gallons/barrel makes cost per gallon of crude oil at $1.78. Cost of refining California formular gas is estimated at 30 cents/gallon. Total cost per gallon of gas in California is $2.08 which is about 70% of retail for regular gas without tax. Federal tax is 18.4 cents, State excise tax 20 cents, sub-total so far is $2.464 and 7.75% sale tax on top of that: $2.65. Average retail in California is $3, so that total profits of producer and retailer and transportation is 35 cents.

The porfit margin is not so enormous as most people think, the price we pay for gasoline is so cheap compares with bottle water. Why nobody complain about 90-95% profit margin bottle water companies and retailers are making ?

 

Ok being in the business, i will try to explain a few things. First of all the NYSE sets the price on a daily basis. The futures guys on wall street set it, because oil is sold in dollars world wide,(Iran is making them very nervous by the way) All oil coming into the USA is "POE" (Port of entry), this means that what every the price is the day the the tanker arrives in one of our ports is what the buyer will pay. OPEC
(Organization of oil exporting countrys) decides how much crude is available on the market for sell. They pump more the price goes down, they pump less the price goes up. As far as the Exxons and Chevrons screwing the public they wont do it

Here is why, lets say Congess catches Exxon in price fixing scheme, the Federal Trade Commission would crusify them and fine them an awful lot of money. Secondly, these corporations sell the public. They have retail outlets to sell their products. Can you imagine how many cut up credit cards they would get back in the mail, not to mention their reputation. Congress invistigates the big oil cos everytime the price of gasoline spike's. They never find anything, and they wont this time either.

Bill

 

You can buy a lot of gas for the difference between a regular Toyota and a Prius

 

The $3250 tax credit for 2006 purchase reduces the sting to a couple thou. It won't take too long to make up that delta

 

FYI The tax credit is changing and will be considerably less in the year 2007 and thereafter. I'll post more when I know more.

 

After all the American lives that have been sacrificed in Iraq I always wondered what ever happen to the Idea of running a pipeline straight from Baghdad to New York. Oil prices should be about 35 cents a gallon by now!!