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What am I paying for in the price of a gallon of gasoline?
Exxon Mobile Perspectives ^ | January 27, 2012 | Ken Cohen

Posted on 01/29/2012 9:11:53 AM PST by w4women

I’m asked this question a lot. And I know a lot of drivers ask themselves this question when they pull up to the pump.

The answer is based on the economics of supply and demand and how products are manufactured and sold – along with what the government takes in taxes. Let’s take a look, based on the U.S. Energy Information Administration’s breakdown of the estimated average price of a gallon of gas in December 2011, which was $3.27.

(Excerpt) Read more at exxonmobilperspectives.com ...


TOPICS: Business/Economy
KEYWORDS: gas; profits; taxes
Business profits rise and fall, but the government take remains.
1 posted on 01/29/2012 9:12:03 AM PST by w4women
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To: w4women

You are paying for Obama’s failures/bribes/reelection funding in the Green energy sector.


2 posted on 01/29/2012 9:31:58 AM PST by Red_Devil 232 (VietVet - USMC All Ready On The Right? All Ready On The Left? All Ready On The Firing Line!)
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To: w4women

So, EXXON makes 7cents /Gal of Gas. & US Govt makes 39cents/Gal....but their convoluted explanation of the ( “-7 “)will never be understood and EXxon will still be blamed.

tip to “big oil”, simplify your explanations - get rid of the
“-7” on your graphs.


3 posted on 01/29/2012 9:36:13 AM PST by urtax$@work (The only kind of memorial is a Burning memorial !)
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To: w4women
So, EXXON makes 7cents /Gal of Gas. & US Govt makes 39cents/Gal....but their convoluted explanation of the ( "-7 ")will never be understood and EXxon will still be blamed.

tip to "big oil", simplify your explanations - get rid of the "-7" on your graphs.

they must have hired the same PR people who explain my cell billing

4 posted on 01/29/2012 9:37:51 AM PST by urtax$@work (The only kind of memorial is a Burning memorial !)
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To: w4women

*


5 posted on 01/29/2012 9:51:57 AM PST by PMAS
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To: w4women
This article is quite deceptive in that it fails to identify the true amount of money that government steals from each gallon in taxes at every level of operation. There is no mention of the 41% corporate tax rate on the majors and there is no accounting at all for how much, in general each phase is taxed.

Why mention the tax per gallon at the pump at all if the other taxes along the way are not individually broken down? Typical propaganda from the U.S. Department of Energy. I'd bet that half the price of each gallon is government related cost, possibly more.

6 posted on 01/29/2012 9:55:21 AM PST by Uncle Sham
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To: urtax$@work

Does anyone know why there’s that 9/10 after the price of gas?


7 posted on 01/29/2012 9:56:07 AM PST by Mmogamer (I refudiate the lamestream media, leftists and their prevaricutions.)
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To: w4women
They could have mentioned the plight of the retailer who is basically an unpaid tax collector for the Gov.
8 posted on 01/29/2012 9:59:47 AM PST by fudimo
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To: w4women
Some pumps in my state have the tax to state and federal broken down on the stamp attached. I wish they all did, to educate. Keeping the gas prices higher means more to the "state" and "federal government". However, ironically we are said to be using less because it does cost more, more gas conservative vehicles have flooded the market; so they keep the price of gas high for obvious reasons. The third listed tax posted on the sticker are automatic increases under the "the environmental tax". The states could reduce their tax, if not for the bad times facing every state. I did ask.

We cannot just resume drilling in the Gulf as the President in his Address so cheerfully offered up, for the rigs have moved out and may take months to return, if at all; just as Obama knew when he chirped the reduced numbers of illegals crossing our southern borders, but in truth the government directed officials to stopped counting those illegals turned around.

We are greatly dependent on oil from other countries, not friendly to our own which effects our national security through terrorists acts which can bring a country oil dependent as we are, to its knees financially by the twisted action of an enemy. I don't care what we have in reserves-the "fear" of what could happen would scare the market, and of course gas/oil goes up further.

The President takes the oath in fulfilling the constitutional requirement:

"I do solemnly swear (or affirm) that I will support the Constitution of the United States.

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

I guess those words can be loosely interpreted according to this sitting President.

9 posted on 01/29/2012 10:01:22 AM PST by fight_truth_decay
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To: Mmogamer

That used to be the old tax. Back in the day you would see 7/10. America was once an honest place.


10 posted on 01/29/2012 10:04:50 AM PST by eyedigress ((Old storm chaser from the west)/?)
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To: w4women

Yeah! Wish we could get an excess government profit tax rebate at the pump!!!


11 posted on 01/29/2012 10:06:58 AM PST by SierraWasp (I'm done being disappointed by "He/She is the only one who can win" and being embarrassed later!!!)
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To: w4women

Above all else, remember this. Etch it in your mind. Braze the outline of the figure. Pass it along. Gas was $1.85 per gallon on Obama’s Coronation Day. ONE DOLLAR AND EIGHTY FIVE CENTS!


12 posted on 01/29/2012 10:07:37 AM PST by Gaffer
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To: fudimo

All retail businesses are unpaid and unreimbursed tax collectors for government!!!


13 posted on 01/29/2012 10:09:42 AM PST by SierraWasp (I'm done being disappointed by "He/She is the only one who can win" and being embarrassed later!!!)
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To: w4women

It is also important to look at how much it costs to buy a (ethanol free) gallon’s worth of miles if you can only purchase ethanol tainted gas.


14 posted on 01/29/2012 10:15:13 AM PST by sportutegrl
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To: w4women

Not included is the increasing impact of environmental regulations. Refiners have to make numerous special blends of gasoline for different parts of the country and different times of the year solely for EPA compliance. The ethanol boondoggle also adds costs as ethanol cannot be shipped by pipeline and must be blended with gasoline as close as possible to the point of distribution.


15 posted on 01/29/2012 10:16:13 AM PST by The Great RJ ("The problem with socialism is that pretty soon you run out of other people's money" M. Thatcher)
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To: Mmogamer
Well was going to say it just brings u in to buy the gas as you see the last number generally and looks better overall then rolled over to the next highest full number in cents--that 9/10ths of a cent than the added 1/10 over to 10/10 = 1.

Then there is said station competition across the street..

BUT will go with the experts:

What is 9/10 of a cent worth?

So the gas companies take an extra 9/10 of a cent for every gallon of gas we buy--what is that actually worth?

According to the U.S. Energy Information Administration (EIA), "prime suppliers" of "motor gasoline" reported sales of 372,833.5 thousand barrels sold in February 2007 [in this case]. Each barrel represents 42 gallons, and to determine the value of 9/10 of a cent for each gallon, we did the following calculation:

372,834 x 1000 x 42 x .009 = $140,931,063 That means that in February 2007, gas companies collected an extra $141 million USD because of their unique pricing practices. Assuming Februrary is a rough average for the year, that's $1.7 billion USD in additional revenue!

wisegeek

16 posted on 01/29/2012 10:19:46 AM PST by fight_truth_decay
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To: Mmogamer
Does anyone know why there’s that 9/10 after the price of gas?

For the same reason you never see something advertised for $40. It's always $39.99.

Mark

17 posted on 01/29/2012 10:20:49 AM PST by MarkL (Do I really look like a guy with a plan?)
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To: MarkL

Read my post above..there is more to it on why it is there.


18 posted on 01/29/2012 10:35:41 AM PST by fight_truth_decay
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To: fight_truth_decay
“..;.Assuming Februrary is a rough average for the year, that's $1.7 billion USD in additional revenue!”

Oh come on! If the price didn't end in 9/10th the price would be rounded to the next higher penny (1/10th increase) not the next lower penny.

19 posted on 01/29/2012 10:41:38 AM PST by garyb
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To: w4women

when-0-when will we ever learn to stop asking questions—questions are not good for anyone concerned !!!!!

Shhhhh !!!!!


20 posted on 01/29/2012 10:45:09 AM PST by gunnyg ("A Constitution changed from Freedom, can never be restored; Liberty, once lost, is lost forever...)
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To: w4women

Negative 7% cost for refining? OK, then direct more of your raw materials to refining and turn petroleum into a real cash machine!


21 posted on 01/29/2012 10:49:28 AM PST by ProtectOurFreedom
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To: garyb
That's what I said..9/10ths add the 1/10 equals to the next whole number [obviously higher]..am I missing something Correct me to see.

Then the price goes up at the next higher 3.45 9/10 becomes 3.46 which jumps again to 3.46 9/10 and so on. But then you get into the formula estimated of cost of the # gals that make up one barrel of oil, the # of barrels, per month, per year, revenues, estimates etc in the present year.

22 posted on 01/29/2012 11:20:25 AM PST by fight_truth_decay
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To: w4women

A few years ago, I think it was 2006 or 2007, I read a report on the rise in the average annual cost of a four year college education, from 1978 to 2006/7.

I backed the dollar amount of the increase into an “inflation rate” for college tutition for the period covered by the report.

I went and found the national average retail price for gasoline, as of 1978, and applied the “inflation rate” for college tutition to it.

The result was what a gallon of gas would be costing at the pump if that cost grew as much as did college tuition from 1978 to 2006/7.

The answer was $12.93 a gallon.

Yet, due to the Liberal/Progressive/Marxist hold on the educational industrial establishment, and the political class’s partnership with it, the oil industry is evil and all we need to do about education is spend more money on it.


23 posted on 01/29/2012 11:20:43 AM PST by Wuli
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To: urtax$@work
So, EXXON makes 7cents /Gal of Gas. & US Govt makes 39cents/Gal....but their convoluted explanation of the ( “-7 “)will never be understood and EXxon will still be blamed.

tip to “big oil”, simplify your explanations - get rid of the “-7” on your graphs.




Reading can be fun as well as informative, as evidenced by the following quotation from the article:



"As the EIA figures show, however, refining doesn’t always produce a profit. In December, the data indicate that the U.S. market price for gasoline coming out of refineries was on average about 7 cents per gallon (-2 percent) below the refiners’ cost of crude oil alone, and before accounting for their costs of upgrading the crude into gasoline. In other words, refineries faced a market where domestic gasoline prices were very weak relative to global crude prices."



This is written about as straightforwardly as one might need to grasp the concept. They're saying that in December, 2011, at a time of relatively high crude prices, retail gasoline demand was weak, which limited the pricing power of refiners. Instead of the refining process adding value to the product, it was adding costs they could not recover from the retailers. At that time, it was costing them an average of 7 cents per gallon to refine crude oil into gasoline. The refiners were eating that increment of cost, not the retail customers. Hence, the cost associated with refining the gasoline, at least for the period they're talking about, was not being passed along to the consumer. But there are always costs associated with refining (wages, utilities, equipment, etc.), and those costs were paid by the refiner instead of being passed along as they would be normally.

That is why the graphic shows that the cost to you for refining crude into gasoline is shown as a negative. They paid the cost during the specified period, not you, the customer.

Gasoline refining hasn't been a very good business for the last few years. The good money has been found upstream (exploration/production) instead of downstream (refining/marketing.)

XOM's overall point is that for December, 2011, they paid 7 cents a gallon for you to have gasoline by eating the cost of refining. As opposed to the state and federal governments, which collect 39 cents per gallon for adding ZERO value to the process.
24 posted on 01/29/2012 11:26:29 AM PST by Milton Miteybad (I am Jim Thompson. {Really.})
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To: Milton Miteybad
this week my son turns 40...

and when he was born our gas cost .36.9gal..thirtysix cents.9

and none of us know when or at how much it will stop...

DRILL HERE AND DRILL NOW AND GET RID OF HUSSEIN AT THE WHITE HOUSE..

25 posted on 01/29/2012 11:39:14 AM PST by haircutter
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To: Gaffer
President Clinton's two terms average weekly gasoline prices ranged from a low of $0.88 per gallon to $1.66. Then down lower to $1.04 [ low follows election year]

"Wartime" President George W. Bush, prices ranged from a low of $1.04 to $4.05 per gallon then down to the low of 1.79 when Obama took office.[election year]

Obama $1.79 - highest USA Average so far was $3.96 [reg] but some states felt the hurt even more than "the reported average"

Does this mean gas prices will drop following the same path of other decreases before elections come around ;)

NewsBusters had a great article: Media Pump Up Obama, Despite High Gas Prices

26 posted on 01/29/2012 11:54:17 AM PST by fight_truth_decay
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To: Wuli

Not to mention you still get the same amount of work out of the gas in 2007 that you did in 1978 (assuming no ethanol). Can’t quite say that about the college indoctrination centers today.


27 posted on 01/29/2012 12:01:03 PM PST by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
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To: All

"THE WASHINGTON TIMES Gerson Lewis of Lorton gets ready to fuel his car at a Mobil station on New York Avenue Northeast in April 2001. The lowest price of President Bush’s term came in December of that year"..then the Washington Times 2009 article goes on to say: " but prices are lower now than in 2001 in today’s dollars".


28 posted on 01/29/2012 12:02:31 PM PST by fight_truth_decay
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