Posted on 12/16/2013 3:59:27 PM PST by Libloather
The flood of North American crude oil is set to become a deluge as Mexico dismantles a 75-year-old barrier to foreign investment in its oil fields.
Plagued by almost a decade of slumping output that has degraded Mexico’s take from a $100-a-barrel oil market, President Enrique Pena Nieto is seeking an end to the state monopoly over one of the biggest crude resources in the Western Hemisphere. The doubling in Mexican oil output that Citigroup Inc. said may result from inviting international explorers to drill would be equivalent to adding another Nigeria to world supply, or about 2.5 million barrels a day.
(Excerpt) Read more at money.msn.com ...
Just what we need, another Nigeria...
The feds and the states will increase gas tax if gas prices tumble just to maintain the taxes they’re getting now.
I’m not so sure that there will be as quick of a rush down to Mexico as they expect; this feels just like the bait and switch - come develop our fields, we’ll nationalize them as soon as they are producing so we can do this again in 20 years.
I think the tax is per gallon, not a percentage of the selling price.
This is Mexico’s main problem. They prohibit foreign investment.
The taxes are not a percentage of the price of gasoline, but an “absolute figure” and thus the taxes are the same - regardless. In other words, the revenue from taxes will remain unchanged even if there is a glut of oil. In fact a glut of oil will probably increase the “take” for gasoline, since people will drive a lot more as a result of the glut ... :-) ...
I’m not so sure that there will be as quick of a rush down to Mexico as they expect; this feels just like the bait and switch - come develop our fields, we’ll nationalize them as soon as they are producing so we can do this again in 20 years.
Or it is to get more payolla, ahem I mean contributions. They will either get more money from the existing players and drop their threat, er plans, or will invite in new better funded players.
Here’s a map for you ...
http://www.gasbuddy.com/USA_Tax_Map.aspx
I’d be willing to bet if gas prices dropped to say $1.50 a gallon the states and the feds will add enough tax to bring it back up to $3.50 a gallon.
Like I said. If gas drops to $1.50 a gallon the feds and the states will add enough tax to bring it back up to $3.50 a gallon or so. California complained that the electric cars weren’t using enough gas and the state was loosing gas tax revenue.
No doubt.
Time for some payback towards “our friends the Saudis”.
So what you’re saying then is: WA will still get its 55 cents per gallon regardless of gas price.
Those taxes have never been used as a “price adjusting mechanism”. They are simply not structured that way.
K - so the states will still get their tax per gallon regardless of selling price.
Yes ... that’s precisely the case.
Okay - see that now. Reason I wrote that I kinda remember a while back were some politico was talking about lost tax revenue when gas prices would go down. Guess he thought the same thing too.
That should then give the oil companies a good 17 years of profits based on a 3 year ROI.
Also, if you are smart enough to see that, I think the oil companies are as well and will protect themselves accordingly.
I remember when Tulsa, Oklahoma had the price of gas down to 99¢ a gallon, back at the end of 2008, going into January 2009. The gas taxes remained the same.
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