Feb 07 2009
Gasoline Prices
Weighing me Down!
Can somebody explain what the H is going on with gas prices. Yes, they are lower than they were and I should be soooo happy and grateful!
But oil barrel prices peaked at $147 a barrel and the most I paid in California was $4.97 a gallon for REGULAR leaded gasoline. (Taxes are included at this point CaliforniaGasolinePrices.com
Barrel prices have gone as low as $32 or so and I have paid as little as $1.79 per gallon of regular gasoline in California.
But since December low barrel prices have fluctuated between $32 and $45. But gasoline is up to $2.27 for regular today 2/7/09 (According to Bloomberg: WTI Cushing Spot is $40.17/barrel. Spot is what we pay today not for the future price (Nymex Crude Future), which by the way is currently priced at $40.17—the same)
So, help me out here, we will round off and use simple numbers and calculations to be able to do this in our heads.
The price of a barrel of Oil at its high was $147 which translated into $4.97 / gallon gasoline prices (what I paid for it.)
If the price of a barrel of oil goes go down in half, say to $75/barrel, then the price of gasoline should be cut in half—to say $2.50 a gallon. Makes sense.
And by that rationale if $75/barrel price goes go down in half again to $37.50 (which it did and then some) the price of gasoline should be cut in half again—to say $1.25 a gallon.
Well, that certainly didn’t happen, of course you have to consider that the state and government taxes add around $0.64 per gallon which includes federal excise taxes of $0.18 per gallon! Taxes are a pretty significant addition and is overlooked when we start looking at how much big oil is making…
What’s interesting to me at the moment is that from the recent low of $1.79 (including tax) when barrel prices were $35, to now when barrel prices are fluctuating between $35 and $45 and gasoline is fluctuating between $2.10 and $2.27 for regular. So I’m saying (speculating) that the service stations who have claimed to be the innocent victims of gasoline price outrage only making a measly 5 cents per gallon are playing around with the margin of about 35 cents. Raising the prices immediately in step with oil barrel prices and then lagging behind to reduce the prices when oil barrel prices go down.
I am taking into account that the supply purchased needs to be recovered before the change is reflected into the price at the pump.
I’m thinking that the sheeple are so happy we’re not paying $5 a gallon that they are willing to overlook the small potatoes.
I say we are getting bent-over at the pump and we need to scream over it! I say the governement taking 64 cents for every gallon sold of every car, boat, motorcycle, lawnmower, etc is very wrong!
The government is taxing gasoline at almost 40% with gas prices of $2.27! Are you telling me that this is okay? And California is billions of dollars in the deficit hole! How many gallons of gasoline are sold in california in a day? How much tax revenue is collected in a day? Where is all that money going?
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Other Articles:
Gas prices drive up sales tax revenue in state
Higher gas prices mean increased tax revenue for California
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Additional information:
Current Gas Prices and Price History
Why Gas Prices Rise as the Dollar Falls
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Other Voices:
Why Gas Prices are Rising Again
California is billions of dollars in the deficit hole! How many gallons of gasoline are sold in california in a day? How much tax revenue is collected in a day? Where is all that money going?
If we could answer that, we’d solve everything. California is so screwed economically they could throw the entire DC stimulus package at it and it would barely make a dent.
I hear you Sister!
I just heard that they signed something after throwing out the minority whip who supported higher taxes! I need details!
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