What other variables are in play from the line of oil to gasoline?
2007-08-02 07:53:31 · 5 answers · asked by ztim21 2 in Business & Finance ➔ Investing
There are other variables and I will get to them. Oil hasn't been $40/bbl in several years now. We have seen a similar rise in gas prices to oil prices, but you are right that they don't move exactly the same.
Some reasons for that:
Gasoline responds to it's own supply and demand economics. Gasoline can vary in price a decent amount just because of it's availability or not. Gasoline is just one of many products made at an oil refinery. Oil is converted into gaseous products, naptha (gasoline), diesel, aviation fuel, heating oil and asphalt. There are supply and demand drivers in each one of these markets as well.
A certain amount of the price of gasoline is taxes. In some areas these taxes are a fixed amount per gallon and in some areas there is a sales tax that is based on the purchase price. For fixed amount per gallon the taxes are a larger percentage of a lower price and a smaller percentage of a higher priced product. (Simplified explanation, if $1.50 gas had 50 cents of taxes and the price of gasoline doubles, the taxes are still 50 cents on a 2-dollar gallon so the new price at the pump is $2.50, not three dollars).
Hope that helped!
2007-08-02 08:03:02 · answer #1 · answered by Rush is a band 7 · 0⤊ 0⤋
It takes time to refine it and bring it to market. With the current schedule, should make for a very expensive heating oil season. Has a colder than normal winter been predicted? The market manipulators (Goldman Sachs and their cronies) are predicting $100/bbl.
2007-08-02 08:19:01 · answer #2 · answered by Andy 3 · 0⤊ 0⤋
Gasoline expands in the heat of the summer, therefore you are already getting ripped off at the pump at this time of year.
2007-08-02 08:27:47 · answer #3 · answered by Anonymous · 0⤊ 1⤋
A HUGE factor in this that no-one has mentioned is that gasoline is only half of what you get out of oil....
2007-08-02 11:34:40 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Its all based on supply and demand and REFINING capabilities NOT COMMIECRAT BS EVAPORATION!
Hey you idiots voted these morons in and this is what you get just think if you get your QUEEN in the White House see what happens to this county.
2007-08-02 11:56:55 · answer #5 · answered by Anonymous · 0⤊ 0⤋