posted on Jul, 2 2008 @ 08:46 PM
Ah Mr. Anonymous, You beat me to the post. Although I have not had time to check this thread as I worked, I just read through the thread to see if
anyone would mention the dollar value falling and you were the only one.
I highly doubt oil companies "control" the price of oil, or gouge it, but in a way they are making a very nice profit margin (roughly 30% profits on
There are MANY reasons why oil is increasing in prices and in turn increase our gasoline prices shortly thereafter.
According to the U.S. Department of Energy, here's an approximation of where each dollar you spend on gas goes:
* Taxes: 11 cents
* Distribution and Marketing: 6 cents
* Refining: 10 cents
* Crude oil: 73 cents
- Price increases generally occur when the world crude-oil market tightens and lowers inventories.
- Crude oil - The biggest portion of the cost of gas goes to the crude-oil suppliers.
- Taxes - Federal excise taxes are 18.4 cents per gallon, and state excise taxes average 18.2 cents per gallon.
- environmental standards - Producing this cleaner-burning gasoline caused problems in refining, distribution and storage, which increases the cost
Just a short list taken from How Gas Prices Work
You also have to look at how the dollar has been falling due to lower interest rates in order to save the economy and housing market. The war in Iraq
is not helping us either in that area.
Companies who buy oil futures such as airlines are speculating on what the price is going to be in the future, such as a month from now, up to a year
from now. If they think oil will be $190 by the end of the year, then they will gladly pay $145 NOW to reserve that oil for themselves to buy it later
on at that price instead of inflated prices.
So whenever Israel and Iran open their mouths speculators run up the price of oil as they see a threat of having a low supply later on.
What we can do? Drive less? Blame China and India?
*shrugs* I think we should cut down on gasoline consumption by carpooling, buying a car that gets better mileage, not drive like a maniac, and
hopefully we can research an affordable alternative energy before gas prices become unbearable for us.
I always say gas is cheap! And that $6-7 is "fair value" for gasoline. People look at me like I'm nuts and actually get MAD at me. Heh.