Oil companies are keeping gas prices inflated to help Republicans get elected
Oil companies are keeping gas prices inflated to help Republicans get elected in exchange for maintaining ongoing tax breaks.
They are taking advantage of the pandemic and the war in Ukraine to price gouge the entire country on gas prices. It helps get Republicans elected, and in a vicious circle, the oil companies make a bunch of money, some of which they kick back to Republican candidates who enact favorable tax laws for the energy companies.
Link to tweet
= new reply since forum marked as read
in July 2008, the price hit a high of $128.08/bbl - https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=f000000__3&f=m
Yet the average price of gasoline at the time was $4.11/gal - https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m
(which had been floated before) about having a federal gas tax holiday and I expect that will happen at some point (which is ~18 cents/gal) if there's little or no movement.
Here in PA, we have been paying at least 58 cents/gal state tax since 2017 - https://www.revenue.pa.gov/Tax%20Rates/Pages/MFT%20Rates.aspx
There has been talk here as well about lowering that and/or a having a state "tax holiday".
My view is that there was a HUGE "Infrastructure" bill that was passed that included money for "roads and bridges" and one of the original points of the gasoline tax was to "fund roads and bridges". So until that federal money is expended, why not use up those federal funds for the time being?
Regardless, the oil companies are still gouging in cahoots with the speculators trying to make up for the Saudi/Russia price war that sent oil to almost -$40/bbl during the early part of the pandemic.
I post this often -
that again show that "gasoline profits" are NOT the same as "oil profits". The wholesalers and retailer realize those profits/losses, NOT the oil companies. And there is nothing at that link that says anything about ExxonMobil only having "6% profit", let alone some calculation looking at the price per gallon and then trying to compare that to the gasoline taxes. 
That link does say this -
Except you made this remarkable leap -
Revenue was $90.5 billion
Profit in % is therefore 4.5 billion/90.5 billion (x 100) = 5 % (Upstream operations profit )
If the average price of gasoline is $5 per gallon, a 5% net profit on crude oil would equate to 25 cents per gallon.
This is actually overstated since the retail price of a gallon includes other profits from refining, distribution and retail pus state and federal taxes. It should actually be based on the wholesale price of a gallon, so they are actually earning less than 25 cents a gallon from the crude oil portion of the business
You do know that a barrel of crude, which is what those "oil" prices are based on, is for the standard barrel of 42 gallons. And that 42 gallons is not "gasoline". The gasoline is refined from that at at a rate of about 20 gal/bbl crude.
So right there, you did a calculation fail, including conflating "upstream" with "downstream".
The question would be, after ExxonMobil sold their crude to some buyer - whether an investor/speculator or an actual 3rd party refiner (or they refined it themselves and spent some amount of money to do it) - then what was the price of that refined product to the wholesalers/distributors? And then how much did those wholesalers/distributors charge the individual retail stations?
The state of California really did a nice job defining all the complexities of this here - https://www.energy.ca.gov/data-reports/energy-almanac/transportation-energy/estimated-gasoline-price-breakdown-and-margins
This page details the estimated gross margins for both refiners and distributors. The term "margin" includes both costs and profits. The margin data is based on the statewide average retail and wholesale price of gasoline for a single day of the week. It is not a seven-day average. The margin provided here is an indicator for the California market as a whole and not for any particular refiner or retailer of gasoline.
The Energy Commission cannot estimate profit margins based on average retail prices and observed wholesale market prices. This is because detailed data on refining and distribution costs, costs paid by approximately 10,000 retail locations, hundreds of wholesale marketers, jobbers, and distributors is not available.
Refiner Margin
Refiner Margin (costs and profits) is calculated by subtracting the market price for crude oil from the wholesale price of gasoline. The result is a gross refining margin which includes the cost of operating the refinery as well as the profits for the refining company.
The price of crude oil is based on the daily market price for crude oil from the Alaska North Slope published in the Wall Street Journal©. The market price of crude oil also includes its own share of costs and profits. In the case of a vertically integrated oil company, the same company that owns and operates the oil field also owns and operates the refinery. Several vertically integrated oil companies operate in California including BP, Chevron, ExxonMobil, and Shell. For simplicity, the refining margins shown are based on producing one barrel of gasoline from one barrel of crude oil. No adjustments are made for other refined products.
In fact, they had a nice little table to show the breakdown -
June 13, 2022
Branded | Unbranded
Distribution Costs, Marketing Costs and Profits | $0.56 | $0.56
Crude Oil Costs | $3.00 | $3.00
Refinery Cost and Profit | $1.85 | $1.85
State Underground Storage Tank Fee | $0.02 | $0.02
State and Local Tax | $0.14 | $0.14
State Excise Tax | $0.511 | $0.511
Federal Excise Tax| $0.184 | $0.184
Retail Prices| $6.27 | $6.27
So no you can't make a direct comparison of "profits" from "oil" and then try to back-of-envelope calculate what that comes out to based on the price per gallon of gasoline.
The taxing of corporations is under the purview of Congress, but in this case, you are now broad-brushing different industries for such a tax without any type of analysis of how much that industry has an impact on the average consumer.
There was an article (and I think it was even linked to in this thread) that compares the oil company profits to Apple's profits, which was ridiculous, and is itself is a deflection from the fact that a corp. like Apple and its products, would be a discretionary purchase vs an energy company, would be a near-compulsory purchase (whether actively for heat/cooking/transportation or passively, through electricity from non-nuclear/solar/hydro sources) for an average consumer.
Yeah, the "most recent data" has nothing to do with the price of gasoline.
Yes that is exactly what needs to be looked at.
But then you fell down the rabbit hole of conflating gallons of gasoline and that price with barrels of oil and that price, and attempting to assign the "profit" across what are 2 different products.
It's just like me buying a silo of wheat at some cost and then trying to assign the profit to the grower because the processors (the flour company and then the bread company) are charging an exorbitant amount for a loaf of bread.
And in the case of the wheat grower and the oil producer - both products are "commodities" that get subsidized, but one manages to generate huge profits at the supplier side where the other often doesn't thanks to the "middle" industries.
And in the case of some of the oil companies you DO have the business jargon of "vertically-integrated" meaning they pump, refine, and even retail product, whereas in other industries (like grain), you don't generally have that as they stay in their own lanes (although it does happen for some of the boutique companies where they grow, process, and then create a finished product for sale and thus keep all the profits "in-house" ).
I suggest you watch this -
But I know you won't.
Look at all the oil price spikes over the last 20 years or so. Seems to always happen when Dems are in charge.
I'm sure it's just a coincidence.
Mississippi River Flows South
Democracy or the Planet only their Me Me Me Me Fucking Tax Cuts.
💙💛
in America and most developed nations. Corporations and the wealthy take profits from our purchases and mostly support right-wing anti-tax politicians, thereby stabbing us in the back with our own money.
If only capitalism was just, humanistic, rational and fair.....
KY....
