Oil's slide could push gas to $1.15

News & Observer ^ | 9/14/2006 | Kevin G. Hall

[SunTzuWu]

Gov will not allow it, think of their loss of tax revenue. That, is why no matter how much you make, the price never gets lower.

Federal and State gas tax is figured per gallon not a percentage of the price. Gas could be a .01 per gal. and you would still pay the full tax rate.

[IamConservative]

Crude oil prices have fallen about $14, or roughly 17 percent, from their July 14 peak of $78.40.

In this same period, I went from paying $3.05/gallon to $2.01 this morning. 17% drop in the raw material generated a 33% drop in the retail price of the final product.

[thackney]

Gov will not allow it, think of their loss of tax revenue.

Why did they "allow" it in 1998~99? Government does not control the price.

WTI Spot Price

U.S. Retail Gasoline Prices

[poobear]

"Just another opinion floating out there among the millions."

Agreed. It's got a long way to go.
http://custom.marketwatch.com/custom/earthlink-net/quote-news.asp?symb=XOM&sid=161455&time=8&freq=2&maval=60&lf=1&type=256&ClientID=46152&mocktick=1&country=US&doChartIV=0&style=1358&size=2

I heard some of the 'hedgies' are starting to short some of their crude stock. Keep the fingers crossed.

[PAR35]

With every energy expert spouting off, I'm sure someone's going to guess right.

Before the current speculator driven increases in oil, I predicted we would see oil in the high $20s with a rebound to the low to mid 30s before we saw it reach $100 a barrel. I've stuck with that, and I continue to do so.

As for gasoline prices, I wouldn't expect the refiners to let them fall to and stay at levels near $1, but I do expect prices to continue to fall well past $2.00 in the short term.

[xjcsa]

Well I was going to post a reply to make you sound like an idiot, but it looks like a few others beat me to it.

[thackney]

OPEC after all these years has learned that if they set production limits and all the member stick with then that they can control the price of oil.

They didn't know this in 1998~99?

[trumandogz]

You are exactly right. $50.00 oil keeps Texans employed, alt fuel research as an option and the Middle East slightly more stable.

[FFIGHTER]

We need an immediate congressional investigation to focus on the oil companies and their manipulation of gasoline pricing./s

[kevkrom]

In this same period, I went from paying $3.05/gallon to $2.01 this morning. 17% drop in the raw material generated a 33% drop in the retail price of the final product.

Gasoline prices also historically drop at the end of summer, even if the price of oil were constant, due to lower demand and the beginning of changining the types of fuels distilled from the crude oil as the seasons change.

Even so, it is still nice to see gas prices dropping faster than a French soldier's rifle.

[kinghorse]

Oh you'll see it. If these guys are good at anything it's protecting market share. This should put the kabosh on a lot of alternative energy plans. Won't be free of this until there is a national policy. Remember Lucy? She lives! She is the oil industry and OPEC to Charlie Brown's eager alt fueler. The football is profit. :)

[trumandogz]

Yes they knew but the OPEC states that needed cash broke or ignored production limits. When the price fell even the Saudis ignored production limits.

[thackney]

No they do not. Gasoline consumption does decline, but so does gasoline production as refineries start making less gasoline and more heating fuel.

[thackney]

Do you believe something has changed since then?

[edcoil]

How kind of you however a difference of opinion does not make one an idiot we can be mature and simply agree to disagree if you are mature enough.

I will still stand by my comments - government will do what it can to stop any loss of tax revenues it has realized in the recent run-up. Even going to a new tax scheme by bringing back the tax-per-mile-plan.

[Wristpin]

Actually there has already been one:

http://www.senate.gov/~levin/newsroom/supporting/2006/PSI.gasandoilspec.062606.pdf

[ArGee]

In this same period, I went from paying $3.05/gallon to $2.01 this morning. 17% drop in the raw material generated a 33% drop in the retail price of the final product.

That plus the effect of the refineries hit by Katrina coming fully back on-line plus the end of the summer additive requirements. Those two increased the supply opportunity for gasoline independant of the price of the oil. It wouldn't have mattered if there were oil supply problems, but since there was an oil surplus it reduces the cost of the gasoline.

Shalom.

[tx_eggman]

edcoil: Gov will not allow it, think of their loss of tax revenue.

That, is why no matter how much you make, the price never gets lower.

xjcsa: Well I was going to post a reply to make you sound like an idiot, but it looks like a few others beat me to it.

Allow me ...

This one's for you, ed ...

[trumandogz]

1. OPEC States failed to increase production capacity due to the low price of oil.

2. China the US and India demanded more oil.

3. Russia agreed to limit production in order to increase price.

4. Q8, SA and the other OPEC Doves began investing in the US economy and thus does not want to see the US economy fall.

[tx_eggman]

I will still stand by my comments - government will do what it can to stop any loss of tax revenues it has realized in the recent run-up. Even going to a new tax scheme by bringing back the tax-per-mile-plan.

Again, ed, the gov't taxes on gas are on a per gallon basis, not a percentage ... hence, no revenue loss.

Facts (not differences of opinion) are pesky little things, aren't they.