Are you aware that the government profits more from gasoline sales than oil companies?

Question

The government made more money from gasoline taxes last year than the oil companies made in profit from gasoline sales.

I heard it on the news, you guys can research it if you're in doubt.

Answer 1

It's funny to see all the morons who are so stupid that they say you must have seen it on fox news or something like that. Why can't people ever do any research on anything for themselves. It's a fact that oil companies make about 14- 17 cents profit on a gallon of gas,but most states make much more The state of New York makes right around 40 cents a gallon tax more then double that of the actual oil companies. Also as far as the smart guy who answered about the oil companies not using the money the government gives them for building new refineries, because of the enviromentalist nutjobs out there it is almost impossible for the oil companies to build a new refinery. Refineries pollute the atmosphere,and cause global warming...waaa waaaa waaa.

Answer 2

This is true in some cases. Not in others.

The government in nearly all states collect over 35 cents a gallon in gasoline. (It's usually a yellow sticker on the pump.) That's about 12% in todays prices, 20% a few years ago and 35% not so long ago. In some states such as CA or NY, its much higher than that. (That's a primary reason y'all have higher gas prices. Thank your politicians.)

For those companies that aren't in the oil drilling business, they are making pretty low profits (as a percentage). For those on both sides of the equation, they're doing pretty well. Of course a few years ago they were losing money.

Now, the big thing you have to realize is that they don't set the price. They sell it on the commodities market and it is bought and sold based on supply and demand as well as political news and fears. The *biggest* reason that oil (and gas) is so expensive is that China is buying every drop they can. Their booming economy requires a lot of oil. This is also why copper costs so much these days. And concrete.

The other reason is indeed the lack of refineries here. Congress has continually put so many rules and regulations on refineries and their construction that the only way it is profitable to build them is for the price to get high. Gasoline is also bought and sold on the commodities market as opposed to being a price set by the companies.

The fact is that the whole "price gouging bill" and "suing of OPEC" are nothing more than magic tricks to pacify the people into thinking that the politicians are actually doing something. Price gouging can occur from time to time, but it is actually pretty rare in the gasoline business and generally prosecuted under state law.

Answer 3

Oil companies are given a bad rep by the media and government as being greedy tycoons, when in reality they make 5-10% profit off of sales. Oil and Gas prices go up and down mainly dependent on OPEC and other suppliers selling to them. Also the government highly taxes gas and oil.

Answer 4

California dreaming! Better carefully check the wording on that obviously carefully crafted piece of BS. I already noticed the words "profit from sales". Companies get taxed on profits so they use all kind of accounting tricks to make the profit appear less for tax purposes. The "real" profit is never published.
There are also other profits not accounted for in that statment. If you found out the truth in the words you would be amazed on how misleading they are. Typical Media.

Answer 5

Oil companies use their money to re-invest into the business. You guys get so angry at oil companies for making a profit, the reason they're doing so well is because they invested millions into drilling equipment, buying land to drill in, taking out the oil, and sending it to refineries to make gasoline. What is so wrong about making a profit. If businesses didn't make a profit, then they wouldn't be in business would they? If you have a job, and the place you worked for wasn't able to make any money they wouldn't be able to keep you hired yes?

Answer 6

You really should stop listening to Fox news and had researched it first

At what point does profit turn into gouging?

Gasoline is the bloodline that keeps America moving. Our personal vehicles alone guzzle 140 billion gallons of gasoline and diesel fuel each year, up 3.2 percent from a year ago

Crude oil - The biggest portion of the cost of gas -- as of April 2007, that's about 50 percent

Refining costs - The refining of crude oil makes up about 28 percent of the price of gasoline

Distribution and marketing - Crude oil is transported to refineries, and gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transportation is passed along to the consumer. Marketing the brand of the oil company is also added into the cost of the gasoline you buy. Together, these two factors account for about 8 percent of the price of gasoline

Taxes - Taxes, including federal and local, account for about 14 percent of the total price of gas in the United States. Federal excise taxes are 18.4 cents per gallon, and state excise taxes average 18.2 cents per gallon. There may also be some additional taxes, such as applicable state sales taxes, gross receipts taxes, oil inspection fees, underground storage tank fees and other miscellaneous environmental fees. Add that to the state excise taxes, and it can average 27.4 cents. It could be worse. In Europe, gas prices are far higher than in America because taxes on gas are much higher. For example, gas prices in England have risen as high as $6.65 per gallon, with 78 percent of that going to taxes.

Station markup - some of the actual money you spend at the pump does go to the service station. Service stations add on a few cents per gallon

Source(s):

http://auto.howstuffworks.com/gas-price.htm

Answer 7

Your source for this fact is where again?

How much of those taxes did the government THEN GIVE to Big Oil in subsidies?

They have spent $0 in new refinery building, or even expanding the ones they already have. Thats what those subsidies are FOR.

BRING BACK WINDFALL PROFITS TAXES

Answer 8

the federal govt gets about 18 cents per gallon for tax.

as for the oil companies, on paper they might be showing less than 18 cents profit, but its called CREATIVE ACCOUNTING: write-offs, depreciation, miscellaneous expenses, tax breaks, salary bonuses, and a lot of other ways to hide income. the oil companies are fleecing the public.

Answer 9

i believe some states, like texas, had surpluses and were eliminating their gas tax for a set amount of time. this would be nice, although in reality those gas taxes are needed for new highways and existing highway maintenance. if we could privatize ownership of some highways, that would be great. additional revenue for the gov't and less gas taxes to be implimented

Answer 10

This why people look to the government to ring prices under control when they-the government -loves high oil prices.More taxes equals more of our money for them to spend............