Hi Gang:

Gas prices are near or at $4.00 a gallon.

How come none of our elitists Presidential condidates are doing a damn thing,as active Senators,about lowering the high cost of gasoline, RIGHT NOW ???

Why are none of our congressmen and women doing anything ,RIGHT NOW,about lowering the high cost of gasoline???

I'm not talking about all their blue sky B.S. about super fuels of the future,I'm talking about taking some action,RIGHT NOW !!!

hippolips

P.S. I don't give a damn how much gas costs in other parts of the world...I live in the U.S.A.

The price of crude oil and the variations in it are beyond the influence or control of your government.In the US that is the big element in price rises at the pump.

The tax on gas must be within its control. In fact, you could look locally. As at July last year, California imposed a total of 44.4 cents per gallon in State taxes, of which 18 cents was the State gas excise tax. Those taxes are above your national average, which is but 28.5 cents per gallon in State taxes.

Your federal tax is 18.4 cents per gallon. So the US average of all taxes on the sale of gas is 28.5 + 18.4 = 46.9 cents per gallon.California's figures are 44.4 + 18.5 = 62.9 cents.

Knocking all the specific gas tax out in California would save 18 cents.You may not think that much of a help.

Someone here can explain how, and to what extent, Congress or your State could ensure that taxes on fuel were lowered.It may be that, for some reason,either or both are reluctant or unable to change the taxes.

(It would, of course, be wholly wrong to think that the adventure in Iraq had anything to do with your government trying to secure oil for the USA. As we all know that was no part of the Administration's thinking. There were other reasons, some changing with events, but that was not one of them).

PS You live in the USA. You don't care about gas prices in other countries. Quite right, too. We don't notice price rises so much because we tax our fuel at an appropriately high level 'Petrol' (gas) prices here are not a political issue.

Oil is running out, and the demand for it is increasing (much of this increasing demand - I'd better whisper it - comes from other parts of the world).

Oil is inevitably going to get more and more expensive, and there's nothing anyone can do about that, in any country.

quote:

Originally posted by newnickname:


Oil is inevitably going to get more and more expensive, and there's nothing anyone can do about that, in any country.

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Hi NNN:

Since oil companies in the U.S. posted the highest profits in history,it would seem that the costs they posted at the pumps had to have something to do with their profits. No???

It wasn't because they were selling more gasoline ,because the higher the cost at the pump ,the more people were looking for alternate solutions to reduce their driving.

People were cutting down on their driving ,it doesn't make sense,yet pump costs continued to skyrocket.

Looks like greedy oil companies knew they had us by the gonnads and took advantage of the situation.

hippolips

I echo all of the sentiments expressed above.

Further, I am a bit cynical about government's interest in reducing the price of petroleum products. Mr. Obama has an advertisement on television right now about oil. In it, he reminds us that Exxon Mobil earned $40 billion last year.

What the ad does not say is that Exxon Mobil paid $30 billion in income taxes. The additional taxes Fred mentioned above are higher yet. My point is simply that government has substantial income from the sale of gasoline.

Mr. Obama's ad is effective at a time when gasoline prices are as much an emotional issue as they are an economic issue. He suggests a windfall profits tax, which (see the link) was nothing more than an excise tax and which failed to be productive.

He also fails to mention that Exxon Mobil's net profit margin has remained approximately 10%. This is a nice, healthy margin, after taxes, but one which would be considered appropriate within a few percentage points one way or the other, by any analyst.

If you honestly feel that oil companies are ripping everybody off...wait, let me rephrase that, because most everyone (including myself) feels that way. If you have strong financial evidence to suggest that oil companies are fleecing us, and believe this will continue at your expense and to the advantage of their stockholders, then become a stockholder.

Another factor, of course, is the weakening dollar. In the United States, we express oil prices in terms of US dollars per barrel.

Let's say a nation is selling us oil at a price of 75 bumbershoots (their currency!) a barrel, which also happens to be 75 dollars per barrel. The dollar weakens such that 75 bumbershoots become worth 100 dollars. At that point, they can still be selling oil at 75 bumbershoots per barrel - no price increase whatsoever - yet it costs us one hundred bucks.

There are some benefits that accure to a weakening of one's currency; this is not one of them!

quote:

Originally posted by coldfuse:
Another factor, of course, is the weakening dollar. In the United States, we express oil prices in terms of US dollars per barrel.

Let's say a nation is selling us oil at a price of 75 bumbershoots (their currency!) a barrel, which also happens to be 75 dollars per barrel. The dollar weakens such that 75 bumbershoots become worth 100 dollars. At that point, they can still be selling oil at 75 bumbershoots per barrel - no price increase whatsoever - yet it costs us one hundred bucks.

There are some benefits that accure to a weakening of one's currency; this is not one of them!

Happily for the US, nations don't trade oil in their own currency. Oil is priced and traded in US dollars. The OPEC producers get dollars for it.It doesn't matter what happens to the dollar, it's dollars they get and dollars we (France,Britain) pay for it.It's not traded in euros or GBP (or the Saudi riyal).

Trading in dollars makes a difference to OPEC. OPEC did talk of switching to the euro from the US dollar but that's not happened.

One small benefit we in Britain and the eurozone get from the dollar being weak against our currencies is that we pay less for the oil we import. That offsets the increase in the dollar cost of our exports to the US.The oil component in the price of those costs us less when the dollar is weak

Anyone know the price of oil in real terms, i.e., adjusted for inflation, from, say, 30 years ago?

quote:

Originally posted by juanruiz:
Anyone know the price of oil in real terms, i.e., adjusted for inflation, from, say, 30 years ago?

Your wish is my command

(through December of last year)

Today, Bloomburg.com gives an oil price of $116.69, which is a 40% jump over the December 2007 oil price, as given in Fuse's link. I really don't think that inflation has been that bad in the US in the last 4 months. Whether in real dollars or adjusted dollars, oil prices now are higher than ever. The highest adjusted price in Fuse's link was $104.06 in December 1979. Oil prices are currently 12% higher in adjusted dollars than the 1979 price. So, rather than things now not being as bad as they were in 1979 (with regard to oil), they are actually worse.

I definitely remember in 1978 or 1979 being shocked at seeing gas at 55¢ a gallon.

Thanks, cf. Some talking head on CNBC mentioned that oil prices today have not kept up with the inflation rate. Just wondered how accurate that was.

The data are a moving target! The talking head would have been correct only weeks ago.

Oil prices are such that they permit anyone to "cherry pick" data from any given date (especially since the Arab oil embargo of 1973) to make a point.

What, in anyone's opinion, may happen to encourage the current spike to mirror the drop of the early 1980s?

quote:

What, in anyone's opinion, may happen to encourage the current spike to mirror the drop of the early 1980s?

A major change in investors' psychology. They are now viewing oil as analogous to gold, a place to put their cash in the belief that it will continue to appreciate. When equities become attractive again, money will flow into them.

As a footnote: Sen. McCain has proposed that the US government suspend Federal tax on gas, but not permanently. He envisages this being done for this Summer, a time of peak demand. That's a whole 18.4 cents a gallon.As the industry predicts that gas will hit $4 some time this year, that might not be noticed. (The British government has been almost as generous.It's thinking of deferring an intended increase of two pence on fuel tax. We won't notice that, either, with fuel at over one hundred and nine pence a litre, fluctuating in price by over two pence at frequent intervals and a difference of two pence being obtainable by shopping around town )

"As a footnote: Sen. McCain has proposed that the US government suspend Federal tax on gas, but not permanently. He envisages this being done for this Summer, a time of peak demand."

Does he explain what source of income will replace the gas tax when it comes to maintaining roads? That's the problem with supporting reduced taxes to solve economic problems: What replaces the government's source of income then?

Are our roads and bridges in good enough shape to put off repairs for a year or two? Will any more bridges collapse?

Of course, we could always just say "Charge it." Those who advocate lower taxes don't seem to understand that taxes oil the machinery of our society. We are already charging a few billion dollars a week for an earlier stupid idea. Where is the fiscal responsibility?

"Oil prices are such that they permit anyone to "cherry pick" data from any given date (especially since the Arab oil embargo of 1973) to make a point."

Taking the most recent data from that chart and comparing it to today's prices is hardly cherry-picking, especially when the figures before the last prices were given on that chart and the direction prices have taken since that price. I'd hate to walk up a hill that had a rise like that.

quote:

Originally posted by DorianGreyed:
"As a footnote: Sen. McCain has proposed that the US government suspend Federal tax on gas, but not permanently. He envisages this being done for this Summer, a time of peak demand."

Does he explain what source of income will replace the gas tax when it comes to maintaining roads?

Of course not. Currently 60% of the tax goes to maintaining roads and bridges and 40% to miscellaneous expenditure. No wonder a) it would be temporary and b) the Senator professes no great understanding of economics

(Still better than in Britain. Apart from taxes on fuel,all of which are taken as part of general revenue, we pay an annual fee for each car. This, without any apparent humour, was formerly termed a 'Road Fund Licence', but none of the revenue was specifically allocated to roads It's now called a Vehicle Excise Licence, which is a bit more accurate )

quote:

Originally posted by DorianGreyed:
Taking the most recent data from that chart and comparing it to today's prices is hardly cherry-picking, especially when the figures before the last prices were given on that chart and the direction prices have taken since that price. I'd hate to walk up a hill that had a rise like that.

I didn't mean to imply that you were. However, even though there has been a significant increase since December, my impression is that folks in December felt about like they do now about gas prices. At some point a few short weeks ago, they were at December '79 levels and for much of the price crisis of the past several years they have been below those levels. That did not make is OK.

'The reality is that as far as the current run-up in gasoline prices is concerned, other factors are more to blame: shrinking oil output from such key producers as Mexico, Russia and Venezuela; internal violence in Iraq and Nigeria; refinery inadequacies in the U.S. and elsewhere; speculative stockpiling by global oil brokers, and so on. These conditions are likely to persist for the foreseeable future, so prices will remain high.' The U.S. and China are over a barrel

How do the major oil companies justify their incredibly high profits in view of the high cost of oil???

Profits are defined as the money left over after all the costs of doing business have been accounted for.What's left is profit.

The higher cost of oil is factored into the cost of doing business.Even the higher cost of transporting gas from refineries to the gas stations is part of the cost of doing business.

Profit is still defined as what is left over when all of the costs of doing business have been accounted for.

These oil companies profits are unconscionable.

hippolips