Oil prices have been this high before

[edhopper]

But gas was at least a $1 lower.

How are there not hearings about oil companies price gouging?

It's clear as the nose on your face.





You can compare the same years in the two charts.

[drray23]

1. it's not exactly that simple.

The main difference is that we are coming out of a pandemic. During that pandemic, gasoline consumption was down so oil companies shutdown some of the refineries.

That's why President Biden is calling for them to restart refineries as well as stop using that opportunity to tack on extra profits.

[edhopper]

2. But it doesn't cost them more to refine oil because of that

and there is no shortage of oil, except one they are manufacturing.

One only needs to look at their soaring profits to see that.

So yes, it is that simple.

[TheRealNorth]

4. Exactly

[jimfields33]

9. Are state taxes the same? Nope! That's the answer.

State gas taxes have gone up significantly in the last decade. Pennsylvania 50 cents a gallon in state tax. Indiana is going to be 61 cents on July 1st. Add up all 50 state who raised their gas tax the last decade and their is the reason.

[edhopper]

11. Penn went up 20 cents

doesn't account for the $1 more when oil was $20 more. And doesn't account for the $1 more nationally.

Why are people making excuses for Oil Companies?

[In It to Win It]

18. It can cost them more because they don't produce all of their own oil. They buy a lot of it also

The big companies do some exploration and drilling, but they also buy a lot of production of other E&P companies and midstream companies. I haven't look at their financials or public records if they have revealed how much they purchase so I can't attest to how much is produced from their own wells versus how much they buy from others.

When I did energy financing, 100% of my E&P clients were private independent, relatively unknown companies. There are a ton of them. All of these smaller private individual unknown companies sold their production to the big boys that we all know (Shell, Exxon, etc) because that's what we, as the bank, required. We required them to have contracts in place to offload their production. They will often sell it as a slight discount off of market price because the big boys are usually buying 100% of their production.

There are tons of exploration sites that are considered "too small" for the big billion dollar oil companies but are extremely profitable for smaller companies. These independent companies are not necessarily small but they are a fraction of the size of the big known players.

[Bettie]

13. Then why are there no shortages?

I've heard of exactly zero in the US. Never gone to a station and found nothing.

They are simply testing to see how much they can charge before we stop driving, then they'll drop the price permanently to a few cents below that, until they figure they can raise it again.

[Liberal In Texas]

17. Exactly. I keep hearing that Biden is responsible for the prices because the refineries are shut

or something. But I have yet to see a shortage at ANY gas station. I lived through the oil embargo in the 70s and know what shortages look like.

We. Aint. In. One.

[Bettie]

20. It's an excuse to raise prices

they are figuring out how high they can go.

Gouging. This is what it looks like.

[maxsolomon]

3. Crude has, but has RBOB?

Reformulated Blendstock for Oxygenate Blending - it's a speculative Commodity.

https://www.investopedia.com/articles/investing/030516/4-factors-you-didnt-know-about-rbob.asp

It was over $4/gallon recently, it's down around $3.75 today.

[muriel_volestrangler]

5. European demand for diesel used to help keep down the price of US gasoline

More diesel used in European cars meant it was worth shipping refined gasoline from Europe to the US, which kept US gasoline prices down. Then it turned out the car makers had been lying about the diesel consumption figures, and European purchases of new diesel cars fell off a cliff. So gasoline demand in Europe has been increasing, driving up the worldwide price of gasoline relative to crude.

Example for UK, but some mainland European countries were keener still on diesel cars: https://www.statista.com/statistics/299031/fuel-types-of-new-cars-registered-in-the-united-kingdom/

[edhopper]

6. That was 2017

5 years ago, doesn't account for the sudden surge in prices that coincided with the Russian invasion.
Which gave the oil companies their excuse.
$4 a gallon? Sure. $5 a gallon, profiteering.

[muriel_volestrangler]

7. Yeah, so since 2017, European diesel demand has been decreasing

(end of new diesel cars doesn't mean a sudden drop in diesel demand at that point; it means the diesel demand starts to go down from that point, as old diesel cars end their lives, and few new ones replace them). So that is why the US gasoline price reached a new peak compared to 2008, when the previous crude peak was.

[edhopper]

8. No

because oil was $20 a barrel more in 2008 and gas was cheaper by $1.

But if you want to keep defending the oil companies...please proceed.

[Bettie]

14. Right? Who knew there were so many fans

of the oil industry here.

[Chuuku Davis]

10. Less gasoline is being refined while usage is going up

Seems more of a supply and demand thing I was taught in economics.
I am sure it is more complex than that though.

[edhopper]

12. There is no shortage

Gas is much more priced by oil prices. That is where the supply and demand comes in. And oil prices have been this high before, without these prices.

[Chuuku Davis]

15. Then why does Joe say we need to reopen the refineries?

I really don't understand.
I have four diesel vehicles by the way so I am hurting.
Our personal vehicles are a Prius V wagon and an old Honda Insight Hybrid.

[Amishman]

16. Several factors explain part of it

We've lost refining capacity, and what we have is still tooled for the heavier crude we imported 10-20 years ago.

Gas taxes are higher now.

Also a change in gas station business models. Pay at the pump becoming nearly universal reduces the in store impulse buys that long were the bread and butter profit source for gas stations. They are making up for it with a higher margin on fuel.

But greed and profiteering is part of it too, just look at corporate margins for the big companies.

[edhopper]

19. Exactly, not saying gas prices wouldn't be high

but we are looking at 20% to 25% pure greed.