Are gas comanies really gouging us?

Question

With the government (State and Fed) earning anywhere from 26.4-68.4 cents per gallon, and oil companies only earning 10 cents, can you honestly say that the "Big Oil Companies" are gouging us?

http://www.conocophillips.com/newsroom/other_resources/energyanswers/oil_profits.htm#Make_on_a_gallon_of_gas

http://www.ncseonline.org/NLE/CRSreports/04nov/RS21521.pdf

http://www.energy.ca.gov/gasoline/statistics/gas_taxes_by_state_2002.html

http://www.taxfoundation.org/news/show/1139.html

http://media.corporate-ir.net/media_files/NYS/VLO/presentations/Market_Fundamentals.pdf

Granted, the oil companies raise and lower their prices through out the season, but so does any other industry. Do you think that a surf board and body suit costs as much in December as it would in July? no, that is business. Even locations make a difference. I personally cannot condemn them because they are companies in a capitalistic society.

Answer 1

I have always wondered why everyone forgets about the government's share of gas prices. If there was anything the government could do to lower prices it would be to lower the tax they tack onto the price.


It is perfectly logical for the price to go up over Memorial Day Weekend. The demand has gone up. There is the same amount of gas available. Simple economics states that an increase in demand with a limited supply results in an increase in price.

Answer 2

What people fail to realize or purposefully choose to ignore is that Oil companies cannot set or change the price of gas or oil.

The price of oil and gas, like many other commodities is set by an exchange. Oil and Gas prices are set by the New York Merchentile Exchange - wherethe price is determined the same way stock prices are determined - by traders.

Traders set the price of oil by buying and selling it based on what they think it will do in the future. It is estimated that up to 20% of the price of oil is due to hedge funds speculating on oil.

And yes, prices go up before Holdiays because traders expect demand to increase and so demand a higher price for the oil and gas.

Note, these are Traders, not Oil executives!!!

Yes, Oil companies can effect the price of gas by changing the amount of supply, but that is a long term pricing tactic not a short one. the reason that gas prices change aily is becuase the price on the exchanges changes daily.

Lastly, there have been numerous congressional investigations over the last 20 years into whether the oil companies ar gouging, and not one of them has ever produced evidence of this practice.

The reason the oil companies make so mich money is a basic business principle - Verticle integration.

Instead of jsut making money on oil, or refining or at the pump they make money at all three. This is not some conspiracy as all major industrial companies vertically integrate because it cuts costs and increases profits.

People jsut dont want to accept that they are responsible for high gas prices - its not the oil companies, its the millions of americans who insist on driving SUV's and insist on driving just to go a few blocks.

Answer 3

there are a number of steps the government can take to shrink oil agencies income or shrink the fee of gas for clientele yet none are distinctly environmentally friendly and a variety of of alternative have undesirable consequences. the fee of gas is what this is for the reason this is a comparatively acceptable commodity and there's a limited furnish which will grow to be greater obvious in the close to destiny. Caps on expenditures will in basic terms produce a scarcity of gas and long strains on the pump. greater taxes may well be levied yet this may not shrink the fee. quite the government might desire to concentration on making option capability sources much less high priced which will save the pocketbooks of clientele who embody those selections.

Answer 4

To some degree, yes.

Do you honestly think the price of oil automatically goes up over Memorial Day weekend, or is higher in the summer than in the winter? No, it's because they know people will pay for it, because they're going to travel.

All your info told me is that it's not only the oil companies who are taking advantage of us.

Answer 5

I think they are! Tell me is this right.......yesterday I went to get gas and the 87 reg unleaded was 3.48 and superunlead 89 was 3.38 a gallon. How is that possible? They were prob selling bad gas.
Then in one town gas is 3.23 a gallon and the next town (6 miles away) it is 3.68 a gallon. How can that be? I do think they are sticking it to us and sticking it hard

Answer 6

My wallet thinks so.