How much would the price of a gal. gas cost if the oil co. were only making normal profit?

Question

Oil companies are making record profits. If those profits were regualated and they made normal profits vs. historically high profits what would a gallon of gas cost?

Answer 1

It would be higher. Oil companies make only a small profit per gallon, but make more in volume as it has become a necessity.

Normal profit is an oxymoron. Bottled water is $1.10 in my vending machine. That is much higher than gasoline. Water from the tap is about $0.001 per gallon.

Answer 2

Adjusting for inflation I've calculated a price per gallon of $2.61 - $2.70 with a 3% inflation rate. *

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However, this doesn't account for the LOW supply of refineries. Typically a low supply results in higher prices, creating more demand, which then lowers the supply more. It spirals out of control until the people who demand cry "Uncle."

I do have deep seeded suspicions about politics behind this. The government, the upcoming Presidential candidates (Democrats & Republican) are behind this new "Corn" Fuel. 20/20 did a report about the "Corn" fuel. Well, it appears that Iowa (A major Caucus State & producer of corn) is the main lobbyist behind "Supplementing" new fuel with taxpayers $$$. So, why does it need to be supplemented? Well, "Corn" fuel doesn't travel down pipelines. We need Diesel’s to transport it to all areas of the country. So, we'll be using the same amount of refined gas to get gas. Second, the pesticides (which are killing the environment) needed to sustain the corn production are very high. Third, gas station owners need incentives to add "Corn" fuel pumps to their facilities. I don't see how this "Corn Fuel" will help the environment or ease our dependency on oil.

Since the Presidential candidates have all been sold on this and amazingly all agree on using this ... well, I can only put their desire on the faming lobbyist communities of Iowa. I'm also wondering if the politicians are aiding the spiraling gas prices so that they can blind sight us and get us to jump on board the "Corn" fuel. Lots of $$$ here!!!

Answer 3

Oil companies are making so much money because of the demand for oil being so high which increases the price. The high price of oil causes the price of gas to increase as well, but there are a lot of factors that go into the price of gasoline like taxes, supply, demand, weather..... So don't blame the oil companies for charging what the market will pay. If you had a house that someone wanted to buy for 400k would you sell it for 200k just to be nice?

Answer 4

If MicroSoft is making "normal profits" then your gallon of gas would be about $5.

If the store where you buy the gas were making "normal profits" on it, the price would be about $4 a gallon instead of the $3.15 US average today. Large volume gas stations make less than 2 cents per gallon -- which doesn't cover their staffing cost, so they sell beer and smokes to make their profit.

How can we lower the cost of gas?

Kill these foolish policies of Congress -- no drilling, no new refineries, use ethanol made from corn, use ethanol at all, require 17 different blends of gas for different regions [reduces competition], refuse to build nuclear power plants, tax driving for more than the repair cost of highways, and on and on.

Interfering in the free market almost always makes things worse rather than better. Government isn't smarter than the individual decisions of millions of people.


Guess this isn't what you wanted to hear, eh?