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10th Amendment: The powers not delegated to the
United States by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively, or to the people. |
Is Gasoline Really That Expensive?
Americans around the country and fed up with high gas prices and have demanded answers. So Congress responded by launching investigations into price gauging by "Big Oil". To the dismay of Congress the investigators found nothing, but yet consumers grumble. Why, don't we look at a few other industries for perspective.
What if you were to fill your car with a gallon of...
Gasoline: $2.95
Orange Juice: $3.59
Milk: $3.99
Tomato Juice: $10.98
Bottled Water: $21.69
Miller Lite: $26.66
Haagen-Dazs Ice Cream: $27.00
Starbucks White Chocolate Mocha Frappuccino: $34.40
Doesn't look so bad now, does it? Now lets look at what the oil companies have to go through to get that oil to you the consumer. It's all quite a bit more then any of the others, ever heard of an orange grower having to dodge gun fire?
When was the last time you heard about the Miller Brewing Company using a supertanker?
1) With no guarantee they spend billions exploring
2) Drill in unstable countries or under thousands of feet of water
3) Deal with gun fire, civil unrest, hurricanes, and tsunamis
4) Build thousands of miles of pipeline that cost billions
5) Ship the oil around the world using $200 million supertankers
6) Refined into hundreds of different gasoline formulations
7) Piped to local holding areas where additives are added
8) Trucked to local retail gas stations
9) Pumped into your car with the government taking $0.58 per gallon
Gasoline Taxes by State
Global Gasoline Prices when the US was $2.30 a gallon
California Government Estimation of Industry Margins from
http://www.energy.ca.gov/gasoline/margins/index.html
reformated since the site is no longer available
NOTES FOR TABLE ABOVE
- Distribution Costs, Marketing Costs and Profits includes costs associated with the distribution from terminals to stations and retailing of gasoline, including but not limited to: franchise fees, and/or rents, wages, utilities, supplies, equipment maintenance, environmental fees, licenses, permitting fees, credit card fees, insurance, depreciation, advertising and profit. This component normally lags changes in the wholesale price of gasoline. This component includes the revenues to dealers, wholesale marketers, jobbers, retail and marketing divisions of integrated oil companies. The distribution costs, marketing costs and profits (not a dealer margin calculation) displayed in the table below are not representative of dealers who purchase their gasoline at prices similar to Dealer Tank Wagon (DTW). The component is calculated as the difference between the average retail price of gasoline from the U.S. Depart of Energy's Energy Information Administration's (EIA) weekly survey less taxes, crude oil costs and refinery margin.
- Crude Oil Cost is the Alaska North Slope (ANS) crude oil price per gallon. In order to report in a timely manner, this value is used as a proxy for California composite refinery acquisition cost.
- Refinery Cost and Profits includes all non-crude oil costs associated with refining and terminal operation, crude oil processing, oxygenate additives, product shipment and storage, oil spill fees, depreciation, purchases of gasoline to cover refinery shortages, brand advertising and profits. The component is calculated as the difference between the Oil Price Information Service (OPIS) average rack price of gasoline and crude oil cost.
- Estimated Components of Branded Gasoline are calculated using the average statewide OPIS branded rack price. Most branded franchisees purchase gasoline at a delivered price called the Dealer Tank Wagon (DTW) that is typically higher than the branded rack price.
- Estimated Components of Unbranded Gasoline are calculated using the average statewide OPIS unbranded rack price.
- Values reported by the Energy Commission are not directly comparable to EIA-reported margins because of differences in definitions and methodologies.
- Retail Price is the statewide retail price of gasoline from EIA's weekly survey.
- Federal Excise Tax decreased from 18.4-cents to 15.4-cents per gallon for gasoline blended with 5.7 percent ethanol by volume. Ethanol-blended gasoline is used in non-attainment areas in Southern California, the Sacramento Metropolitan Area, and the San Joaquin Valley, accounting for over 80 percent of all gasoline used in the state. The remaining 20 percent is subject to the full 18.4-cent/gallon federal tax.
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