I would like to use this article as an opportunity to further address the idea that "Big O&G" is somehow "in the wrong" based on the idea that they make too much money, or that they "gouge" the public, and so forth. Bear in mind as there are very few absolutes in the real world, things like refining margins and who-knows-what-else play a direct role in this discussion and I would love to hear some of the professional's thoughts on the matter in this thread. Also if anyone has other information that has convinced them O&G companies are somehow immoral, or too subsidized, or whatever, from a source they think is at least as credible as the federal government, we can compare it's relative "truthiness" to the very simple case laid out in the article above.
One more thing I would like to say about this, every time we begin to get to the point of widespread support for increased drilling in general, for the last 40? years we always hear "it will take too long to help, it won't help at all because we don't have enough resources," et cetera. Well, we now have access to sufficient resources to make an enormous difference. If we're going to throw massive amounts of borrowed money at new technologies we should also be doing as much as we can on what we KNOW will work. Drill it all and drill it NOW. The world is starting to pass us by, as our buying power as a nation shrinks and overseas demand for O&G grows.
Here are some estimated values for 2010 for diesel:
Refinery Margin - 32 cents/gallon
State & Federal Taxes - 48 cents/gallon
Distribution - 30 cents/gallon
Crude Oil - $1.89/gallon
Values would be similar for gasoline except taxes would be ~ 41 cents/gallon. Crude oil price is established by world market. Only item not included is the service station profit which would vary significantly by location. Most stations are independently owned so margins are controlled by station owners.
Fuel taxes and where they go:
this link didn't make it through, but I googled "where does gasoline taxes go" and found it there.
Thanks sesport, the pdf is a long read but there's a lot of information included in it.
Maybe it's time for congress to start all over with the tax codes.
I watched Tiber Machan's interview last Sunday on C-Spans Book TV and his view was interesting, no taxes. I didn't agree with some of the things he put forth on how this would work, but, how well is the tax system working now?
this does include defunct portions of the code but the author discusses that in the link. also of importance is to note that the above chart's Y axis is set to a log scale.
oil really got smacked down today, almost $9.50 for cushing and over $10.50 for brent. NG got whacked too along with many other commodities with USD strength leading the way, along with many other factors at play of course.
maybe we should investigate?
Not if the price is dropping.
Maybe Big Oil lubed that squeaky door. lol
crude oil margin hike? big news for the sector. pretty broad implications esp for "weak handed speculators." it's a little interesting to me that the announcement comes on the heels of a slight bounce after an ~8% downdraft