Stupid Gas Price Defenders
April 19, 2006
This is very odd.
There are a lot of very crazy people, running around saying that we are going to be out of gas in a few years. Maybe next year. Maybe sooner.
I agree with them. Not because we are going to run out of oil, but because we are going to be denied access to oil.
Not because some country will not sell it to us, but because it became too expensive for the average Joe to buy.
It doesn't matter that gas costs my friends and me $2.85 or $3.30 a gallon. We couldn't afford it at $1.89!
And while I agree on most points with Rush Limbaugh, he is wrong on this one.
Rather than setting a reasonable, high per-gallon profit level, all oil companies tie their profit level to a percentage. After the purchase of the oil at usurous prices, each succeding step along the way adds only certain pennies per gallon, not a percentage. Taxes in some states also add via percentage. The retailers usually add fixed pennies to the price, though, admittedly, some add via percentage, too..
Let's do a little math. Let's say we buy a barrel of oil for 70 bucks. There are 50 gallons in the average oil can. That's about $1.54 a gallon. The cost of transporting the oil to the refineries can be anything - above the cost of the crew, discounting the ship cost per trip, insurance, and the price of fuel - and usually is. Remember who owns the ships and drills the oil - usually same company. Now remember who refines the oil. In Shell's case, they own it all, from drill to pump. And they charge the most for gas, historically. This is also true of other oil companies, but they seem innocent, because their people just sit on the same boards of the companies they outsource to, and control their prices accordingly.
Let's continue with the math. By the time the gallon of oil gets to our shores, it costs about $1.59 per gallon. Now it's pumped to the refinery (yes, pumped, not trucked), where the cost is 67 cents per gallon. The refinery has increased the price per gallon IN RELATIONSHIP to the price of the oil. Mind you, they can do it for the exact same amount and make the exact same profit as they did the day before, and STILL pass the cost of the oil on to you. All this does is give them a cover to increase the amount of their product by even more than the pass-a-long price. We call this, "usury." They get away with it by saying that the cost of oil is more, or there are fewer refineries and the demand is more, but that's crap. If their cost per conversion of a gallon were constant, it would make no difference. But their lie is discovered when they have to announce the billions more per year they make, because they have increased their RATE. Anyway, South Carolina gas is now up to at least $2.89, when it could easily be $2.28, which we can't afford either.
It is the one flaw of capitalism during a war. Any other time, the market would and should have sway. But this is war, and we are paying the enemy, to boot.
Take a Look at this:
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Do you understand, now, why honest merchants like Stew Spinks look like criminals when they raise the price? Remember, THEY ARE JUST ADDING THEIR USUAL FIXED PENNIES PER GALLON, like the state and federal gas taxes. It simply isn't fair to him or any other of the the screwed station owners who have to take the flak for the greedy oil companies and gas refineries.
And please don't tell me the oil companies don't do this. My 1st cousin was the No 1 lawyer for Exxon for years, and he told me how the pricing was done. I just never thought they'd do it during war time.
The point is, that if each step all along the way added fixed pennies of profit per gallon rather than percentages, the price would still be high, but not anywhere as high as it is.
The oil companies are blaming themselves, but we just don't make the connection.
We are in the industrial surge part of the economic cycle. We do not need consumer strength to prop up the economy, yet. But as the cycle matures, we will need consumer strength, and the real fear is that it won't be there, because it has been drained by the cost of gasoline.
What of the average Joe? How do we factor him into the mix? He can't just run out and get another vehicle. He certainly isn't capable of an expensive conversion on his existing vehicle. Certainly no government program to help people convert. Yet, manufacturers KNOW that there exists a car the size of a Rolls Royce that can go 100 miles at 220 miles an hour (or 230 miles at 90 miles an hour) on a single electric charge, and do nothing about producing one, then Joe has noone to help.
The ancillary positives of cleaner city air and quieter countrysides that you get with electric cars, not to mention reserving the gas for the armed forces mega-machines and more secure oil-free ports, is still an oil-pipe dream.
I like the idea of my wonderful black lab's ears flapping in the breeze as we fly along the highway without the gas smell. And Daisy does so love to fly!
See this article:
"JAPAN CREATES THE WORLDS FASTEST ELECTRIC SEDAN"
WAKARIMASU - KA?
It's expensive, but the point is, mankind has the technology right now. Can you guess who has talked Detroit out of mass-producing these electric miracles at an affordable cost?
Let's not always see the same hands, please...
Dick Anderson
