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(CBS2Chicago.com)   Old and [not] busted: Blaming the oil corporations for the high cost of gas. New hotness: Discovering your state and local governments are soaking you for 20% of that cost   (cbs2chicago.com) divider line 250
    More: Asinine  
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11300 clicks; posted to Main » on 22 May 2008 at 4:04 PM (6 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2008-05-22 04:53:26 PM  
You would think they could use all of that extra tax revenue to beef up public transportation around the country.

Just based on %20 per gallon.

$1 = $.20/gallon
$4 = $.80/gallon

So where is that extra $.60/gallon going? I've paid for at least a new bus or two over the last few years.
 
2008-05-22 04:55:14 PM  
Old and Busted: Driving on paved roads
New Hotness: Driving through dense forest so you can keep your 20% and stick it to the man
 
2008-05-22 04:55:59 PM  

brap --
Tolls seem more appropriate, actually -- base on mileage and weight.


If I were driving a Tesla, I'd still be causing wear on the road -- even though it's purely electric. The road doesn't care how gas-efficient the engine is. The hybrid I drive presumably does about as much damage to the road as any other vehicle of its weight and axle count.

 
2008-05-22 04:56:31 PM  
Ditto: So where is that extra $.60/gallon going? I've paid for at least a new bus or two over the last few years.

You do know there's a war on, right?

Hell, it's not even close to keeping up at the rate it's at. Expect taxes to rise sharply in the next decade.
 
2008-05-22 04:56:48 PM  
OPTION 1: Troops already in place. Take over Iraq, Kuwait, and Saudi Arabia. Wall off production areas/refineries. Push natives out 50miles+ for free-fire zone. Profit.

OPTION 2: Drill in ANWR, oil shale areas in Utah, Colorado, N/S Dakota, and off coasts of CA, FL, & AL. Purportedly, our reserves as listed are as great as MidEast. Build refineries.

Which option is cheaper in the long run and gives us control over our destiny?
 
2008-05-22 04:57:17 PM  
I thought the new hotness was realizing the Federal Reserve is pumping bills of dollars into the market, causing massive inflation?
 
2008-05-22 04:58:14 PM  
Monkeypillow: wombatsrus: Perhaps only for purchases from oil companies that are behaving themselves and do not have excessive profits.


Define excessive.

Oh I'm sorry, I was under the impression that it was the goal of a business to turn a profit. These are not charity/non-profit organizations, and they have operating costs.

Plus, oil companies make significantly less (as a percentage) than a lot of other industries.


You'll never convince these dimwits. They are incapable of finding a balance sheet and actually looking at profit margin. They love their Steve Jobs and hate Exxon. Numbers are just fuzzy symbols that get in the way.

The U.S. is farking disgusting in it's hypocrisy. It was all well and good when oil was cheap and you could hardly make a cent on crude.

Now that the rest of the world is actually building infrastructure and using energy, our precious soccer moms are paying $4 a gallon to drive their kids to soccer practice.

Meanwhile the third world is trying to build schools, hospitals, and shopping malls. Problem is that drives up our price of gas, steel, copper, food.

The high price of oil is actually helping transform much of the former Russia and many south american countries. fark 'em though. We cannot hate on them. We'd look racist.

We want it all and we want it cheap. We don't give a shiat who benefits from high oil prices and how its transforming them into modern nations. Nope. fark em. Tiffany has to drag her fat ass kids to soccer practice.
 
2008-05-22 04:58:25 PM  
I don't believe that the common vociferous idiot is going to figure out that their congress/state/county is fleecing 'em.

Blaming big biz is so much more the zeitgeist
 
2008-05-22 05:01:30 PM  
SSP: So I can blame oil companies for soaking me for 80 percent of the high cost? It's not a mystery Subby, how do you think roads and bridges get built or repaired?

Or...If you are Phil Bredesen, you can use that state gas tax to build a dance hall in your home...and THEN you enact toll roads to pay for the road maintenance you blew away with the construction of said dance hall...

/TN FAILS
 
2008-05-22 05:06:51 PM  
Dark Overlord: OPTION 1: Troops already in place. Take over Iraq, Kuwait, and Saudi Arabia. Wall off production areas/refineries. Push natives out 50miles+ for free-fire zone. Profit.

OPTION 2: Drill in ANWR, oil shale areas in Utah, Colorado, N/S Dakota, and off coasts of CA, FL, & AL. Purportedly, our reserves as listed are as great as MidEast. Build refineries.

Which option is cheaper in the long run and gives us control over our destiny?


A third option where you don't base pretty much your entire economy on a single product that's supplied by a handful of companies.

Even if it doesn't involve petroleum products, I guarantee it uses oil in shipping it to market and in getting the customers there as well.
 
ZAZ [TotalFark]
2008-05-22 05:07:37 PM  
Kanyon: Someone correct me if I'm wrong, but doesn't the U.S. have one of the lowest tax rates on gasoline in the world?

No, the lowest rates are negative. The U.S. is in the middle. Tax rates here are lower than Europe, higher than China and some oil producers. (Google suggests that Chinese authorities wanted a tax since 2006 but are facing resistence and haven't introduced one. Maybe somebody can share more current data if this is no longer true.)
 
2008-05-22 05:07:48 PM  
And A Bit Else: Like, it's got bling and saves on gas fool! These high gas prices are crimping my style.

Wait....is that tinfoil?! Jesus........
 
kab
2008-05-22 05:12:50 PM  
degreeless: revenues

degreeless: I wonder where all the windfall revenues from gas taxes are going?

Not my pocket


Nobody is profiting man.. it's supply and demand!
 
2008-05-22 05:16:11 PM  
Korovyov I can see your point.

However, though I don't regularly drive when I rent a car I hate slowing down and I think maybe the focus should be on having a fiscal incentive to drive a Tesla or the like.
 
2008-05-22 05:16:32 PM  
JDerek: The government doesn't use the money they have NOW effectively. Throwing more money at a problem doesn't solve it.

Now, but it ensures a greater chance that the right amount is thrown at the problem.

Suppose education needs $1 billion a year. However, the Department of Education waste 50% of its money each year. The strategy is to give the Department of Education $2 billion a year and then enough will go to the right places. Instead, we give the Department $1 billion and scream about the inefficiencies. The goal is to get the money in the right place NOW and that's done quickest by pouring money in.
 
2008-05-22 05:17:02 PM  
You don't understand how things work.

The free market always adjusts.

Redistribution of wealth is communism.

Greed is good.

The invisible hand of the market.

Companies need a profit motive.

High taxation (on anybody but working shmoes) is bad so these taxes are justifiable.

/If you print these on a card and get some kneepads, you can probably blow most of corporate America and the bottomless bureaucaracy in one day.
 
2008-05-22 05:18:17 PM  
Thorak:

The price change reflects the higher taxes cities collect on top of the rural governments. Cities often have higher additional taxes.

You should be able to find a taxing break down online for your city.

For the rest of you: The biggest factor is the Futures Market

The producers of oil are often the same company, but there in lies something most people don't know or realize.

ALL the oil has to be sold on the futures market. Anybody can buy it from there, you or I, I think the minimum is 500 barrels. So, all the oil is sold there, and a broker buys the oil (often before it is loaded on the ship, 6 months or better) then tries to sell it later before it hits the market. In the process, companies are trying to buy it, from the broker.

The $xxx of the price per barrel is for the highest bid, on the highest quality oil. That price is what the refiner is paying for it. So, the biggest reason from the increase in the price of gas is the going rate of oil per barrel on the futures market.

The cost of producing the oil is often quite a bit less. It practically flows out of some spots. Or has to be cleaned and sorted, like the Oil Sands of Canada. The oil from Canada or Venezuela is often much harder to process, so it goes for a lower rate then the 'high' rate that makes the news. There are often only a few refineries that can process a certain type of oil, also.

Add to that oil prices have been based off the US dollar for quite a while, and hence with the sinking dollar, that has raised the price of oil in relation to this nation. And hence, the price of gas.

SO: any argument about how much a refiner is making should, to be even close to accurate, needs to include the actions of the Futures Market.

After that, refining the oil itself generally costs between $.25 and $.38 per gallon. Of that, the refiner makes about 8%-10%, so, about $.02 to $.03 per gallon is profit.

The profit for the oil companies comes from the producers. Those that have a production facility, platform or otherwise, are the ones making coin right now. Often those facilities are not owned by large corporations though, and are 'State' owned, like it is currently in Venezuela, or in most of the middle east, though they also lease the land to corporations for a percentage of the oil profits.

It is a very complicated system though, barely understood by most people, and ignorance sure makes for some curious conspiracies.
 
2008-05-22 05:19:37 PM  
Il Douchey: To EARN their profit, oil companies must license, find, extract, refine, transport and sell the oil. And, they can't force anybody to buy it. To get their oil revenue, gov't does nothing but issue a tax -and nobody can refuse to pay it.

What do you want, toll booths on every street corner? Those streets gotta be payed by someone.

Also, of note: we Europeans pay lots of taxes on oil. Bridges aren't collapsing, roads aren't full of potholes. Seriously, maintaining roads cost a lot of money, and you can't put it all on the credit card, Bush style.
 
2008-05-22 05:21:43 PM  
We should remove the gas tax and just take that money from poor people instead to make up the difference.

That's precisely what we're doing already. I'm dead set against removing the tax without an appropriate offset, but if you cut this regressive tax and replaced it with a comparable increase in the far less regressive income or property taxes and a separate tax on commercial use of fuel or the roads, that would make a great deal of sense. That is, assuming you're that interested in giving the poor a break.

Still, Thomas Friedman had it right:
If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage - gasoline consumption and gas-guzzling cars - and you want to lower taxes on the things you want to encourage - new, renewable energy technologies. Dumb as we want to be (Fark won't take a NYTimes.com link here - Sorry)
 
2008-05-22 05:23:12 PM  
Today was the finally blow for me, I just discovered that a Wendy's Frosty is now $1.49!!

Damn you big oil!
 
2008-05-22 05:23:14 PM  
Too bad the whole idea of using some of those exorbitant taxes on petrol can't be used to fund bedrock, actual results research and manufacturing of alternative fuel vehicles can't possibly work.
 
2008-05-22 05:23:14 PM  
SSP: So I can blame oil companies for soaking me for 80 percent of the high cost? It's not a mystery Subby, how do you think roads and bridges get built or repaired?

The Construction fairy?.
 
2008-05-22 05:25:02 PM  
diesel3: Subby, the oil companies make about an 8% margin on their products. The media fear-mogering around record profits is misleading. To put this into perspective for you public-school types, 8% of $100 ($8) is a far lesser amount than 8% of $1M ($80k) so of course the profits are record setting but their margin is still the same.

Funny how most folks don't balk at $2 for a red bull of $9 for a martini but $4 for fuel is a disaster that needs politicians to correct. Supply and demand, folks, compounded by a weak dollar results in a higher commodity price. Pretty simple. Open an economics book instead of tuning into your "Friends" and "Seinfeld" reruns.


If I hear a comparison one more time between gas/oil and some trivial item that you don't propel your fscking car with I think I'll go nuts.
 
2008-05-22 05:25:03 PM  
THAT can't possibly work.

/Long day
 
2008-05-22 05:26:48 PM  
I hate when companies make money when they can.. Im going to pay 5 bucks for a Gin And Tonic!!
 
2008-05-22 05:27:41 PM  
gretzkyscores: I wouldn't have a problem with this argument so much if the government would actually, you know, fix the goddam things instead of blowing the money on earmarks and pork. Plus, I'm less concerned about the salary of oil company bigwigs than I am of dying as I cross some shoddy old neglected bridge:

That bridge was under construction when it failed. It WAS being worked on, it did have money spent on it.

Winters suck in Minnesota. We spend an obscene amount of money repairing the damage they do to our roads every year. They definitely aren't neglected...you're hard pressed to drive anywhere here between spring and fall and not have to go through a construction zone or two.
 
2008-05-22 05:28:20 PM  
this pic was in the Red Eye the other day. BP station at Fullerton and Ashland (just down the street from me) in Chicago.
i271.photobucket.com

Ouch. Good thing I take the train (yeah, yeah, I get that it adds to everything else).
 
2008-05-22 05:28:33 PM  
Monkeypillow:
Plus, oil companies make significantly less (as a percentage) than a lot of other industries.


Oil companies are also more honest and would never hide profits or inflate operating costs.
 
2008-05-22 05:28:40 PM  
mediaho: You can refuse to by gas. If you can't, then it should be a public utility.

It should be anyway -- and be regulated as such. I don't see how it's significantly different from an electric utility. You can refuse to buy electricity, too. . .
 
2008-05-22 05:29:12 PM  
liberalish:
Oh, and I get a kick out of the 9/10th of a cent.
 
2008-05-22 05:30:51 PM  
chi_tino: SSP: So I can blame oil companies for soaking me for 80 percent of the high cost? It's not a mystery Subby, how do you think roads and bridges get built or repaired?

So after reading the article, can you explain to us how, when gas prices double, there are twice as many roads and bridges being built? The beef is a tax system in Illinois/Chicago that bases gas taxes on a PERCENTAGE, whereas most other states base their taxes on a PER GALLON basis.

RTFA, mmkay?


A.) While not double, there are more roads being maintained than ever.

B.) See all those construction vehicles? Each takes a LOT of diesel fuel to run. Asphalt, concrete aggregate, and steel are all also at record prices. Inflation impacts that side of the equation, too.

The states that aren't basing it on a percentage are getting raped with construction cost overruns, and they'll either be raising their taxes soon or deferring even more maintenance. From my observation, the latter seems to be winning.
 
2008-05-22 05:31:32 PM  
Just remember, none of you are paying enough taxes.
 
2008-05-22 05:32:05 PM  
I have nothing against companies making money.

I get more than a little annoyed when they just shove it, by the billions, up their own asses and invest it into dying industries that will do nothing but make them more money and prop up a recursive economy without looking towards anything but their next Gulfsteam and two teenie uptick for the shareholders.

If we stay bent over the table for oil concerns, they're just gonna keep banging away.

I wanna plug my car into the 110 VAC Edison outlet, once a night and wait for electrical utilities to raise the rates 39057838945894% because of some, theretofore, unprecedented occurrence that demands that they do so.
 
2008-05-22 05:33:50 PM  
pbjosh: The price change reflects the higher taxes cities collect on top of the rural governments. Cities often have higher additional taxes.

You should be able to find a taxing break down online for your city.


It wasn't just the city. The rural areas just outside the city limits, a little bit cheaper. A couple counties over, cheaper. Same tax rates between the two counties.

Also, see how prices at the pump rise immediately with the rise of the price per barrel, but don't automatically drop in the same way.

Again, I'm not saying that the pricing here is immoral, but the way the gas companies are portraying it IS dishonest.

However, I'll admit I moved out of Nova Scotia a couple years ago, and they were just putting in new legislation regarding gas pricing because it had gotten so bad. The new laws went in in 2005, and, I quote here from the main site, were put in because;

"For the general motoring public it will mean more stable gasoline and diesel fuel prices where, except for extraordinary circumstances the price you pay when you go to work in the morning will be, give or take a penny, the same price you can fill up for when you drive home later that evening.

In fact it won't be unusual for the cost of gasoline and diesel fuel available to the general motoring public to remain unchanged for up to a week at a time. In the event of disasters like Hurricane Katrina the price may change more rapidly but other than that the days of two or three price changes in a day are over."


Because prior to this, we honestly DID have every gas station in the city suddenly drive prices up 8 cents a liter the friday before a long weekend, only to drop them back down by that evening. Solely because they could.
 
2008-05-22 05:34:23 PM  
diesel3: Subby, the oil companies make about an 8% margin on their products. The media fear-mogering around record profits is misleading. To put this into perspective for you public-school types, 8% of $100 ($8) is a far lesser amount than 8% of $1M ($80k) so of course the profits are record setting but their margin is still the same.

I'm the subby. Look for a post from my handle a little further up to see where I'm coming from on this - which isn't too far off from your post. The bracketed text on the headline was a sacrifice to get the thing greenlit and not turn this into a complete flame war. The emphasis is definitely on the second part of the headline.

/Took several econ courses
//Big fan of "Seinfeld"
///Not "Friends"
 
2008-05-22 05:37:57 PM  
anti-nescience: Oil companies are also more honest and would never hide profits or inflate operating costs.

My issue is when they control the entire process, from extraction, to refining, to distribution, to point-of-sale, and ensure they make that margin of profit at every single stage.

They've got to make a profit on the extraction, and then "sell" it to themselves, using that fictional "sale" price to establish how much it costs to refine, which they then make another profit on, setting yet another price they charge to their stations to sell it, which they make yet more profit from.

Not because they shouldn't make the profit, but they only ever mention the final stage when they talk about profit, ignoring the assumptions they've made along the way which are a "hidden" profit, since they assume it as part of the "cost" of doing business. Despite the fact that it's a cost they pay straight into their own coffers.
 
2008-05-22 05:39:19 PM  
*shakes magic 8 ball*

"F*ck you, give us more money because we say so".

That's about the thrust of the economic principles in place, here.

And since when do we have to hand the same, no bid road maintenance contracts over to the same wankers who will come up with the same, huge overruns, year after year and just line their pockets with state funds? Oh, yeah. Since forever. Tammany Hall is alive and well.
 
2008-05-22 05:42:27 PM  
Remove all Republicans: JDerek: The government doesn't use the money they have NOW effectively. Throwing more money at a problem doesn't solve it.

Now, but it ensures a greater chance that the right amount is thrown at the problem.

Suppose education needs $1 billion a year. However, the Department of Education waste 50% of its money each year. The strategy is to give the Department of Education $2 billion a year and then enough will go to the right places. Instead, we give the Department $1 billion and scream about the inefficiencies. The goal is to get the money in the right place NOW and that's done quickest by pouring money in.


do you use that strategy when you ask your boss for a raise? Sir, umm...I know i waste a lot of my money on porn and cheetos, but if you pay me double i promise and pinky swear that i will fix my car to get to work on time and buy more appropriate work apparel.
 
2008-05-22 05:43:19 PM  
jimbo44311: They have a responsibility to the shareholders to make money, and they're being asked to defend that?!

Or, in other words, rape is a good thing when you're one of the rapists.
 
2008-05-22 05:44:28 PM  
Speaking of fuel taxes, I predict that before plug-in vehicles make up even 1% of the US fleet, states and the Feds will be forced to find a way to charge the drivers for road use in lieu of fuel taxes. The smug end-run around taxation will end, pronto.
 
2008-05-22 05:45:01 PM  
liberalish: Ouch. Good thing I take the train (yeah, yeah, I get that it adds to everything else).

Me too. That $75 a month 'el' pass is starting to look sweeter and sweeter isn't it?
 
2008-05-22 05:47:07 PM  

Thorak --
One, you can't make a profit selling anything to yourself. Doesn't matter what the price is.


Two, most of the money is going to the owners of the oil fields -- which is usually the national government (or completely state-controlled company). ex. you want Russian natural gas, you have to deal with Gazprom and the Russian government. High prices are funding the Kremlin's ambitions. Same thing goes for pretty much every Arab oil exporter -- vast public employment and public largesse with government primarily funded by oil royalties. Ditto Venezuela for oil, ditto w/ Morales' Bolivia for natural gas. Mexico has Pemex. Those who have the resources have little reason to sell 'em cheaply, especially when an Iraqi-vs-Kuwait-style annexation is not particularly likely to be tolerated.

 
2008-05-22 05:47:41 PM  
HulkHands: Last time they gave a tax holiday the gas companies increased the price of gas and reaped the profits.

What if they gave a tax holiday and nobody came?
 
2008-05-22 05:47:49 PM  
honk: Or, in other words, rape is a good thing when you're one of the rapists.

When the only thing an economy values is value, when more money is the only goal, it ceases to serve the scoeity that supports it.
 
2008-05-22 05:47:55 PM  
No kiddin', of course the state and local taxes screw you over. We went to Mr Theologian's 40th year reunion in St Louis, and the gas was 20 cents cheaper than in Indiana.

/awaiting for crap to happen, Road Warrior style
 
2008-05-22 05:49:59 PM  
oneodd1: diesel3: Subby, the oil companies make about an 8% margin on their products. The media fear-mogering around record profits is misleading. To put this into perspective for you public-school types, 8% of $100 ($8) is a far lesser amount than 8% of $1M ($80k) so of course the profits are record setting but their margin is still the same.

Funny how most folks don't balk at $2 for a red bull of $9 for a martini but $4 for fuel is a disaster that needs politicians to correct. Supply and demand, folks, compounded by a weak dollar results in a higher commodity price. Pretty simple. Open an economics book instead of tuning into your "Friends" and "Seinfeld" reruns.

If I hear a comparison one more time between gas/oil and some trivial item that you don't propel your fscking car with I think I'll go nuts.


is the martini combustible?

/don't know how much alcohol is in a martini
 
2008-05-22 05:50:21 PM  
014789: Remove all Republicans: JDerek: The government doesn't use the money they have NOW effectively. Throwing more money at a problem doesn't solve it.

Now, but it ensures a greater chance that the right amount is thrown at the problem.

Suppose education needs $1 billion a year. However, the Department of Education waste 50% of its money each year. The strategy is to give the Department of Education $2 billion a year and then enough will go to the right places. Instead, we give the Department $1 billion and scream about the inefficiencies. The goal is to get the money in the right place NOW and that's done quickest by pouring money in.

do you use that strategy when you ask your boss for a raise? Sir, umm...I know i waste a lot of my money on porn and cheetos, but if you pay me double i promise and pinky swear that i will fix my car to get to work on time and buy more appropriate work apparel.


You beat me to this. So, Remove all Republicans, by your logic, if I give my kid an allowance, and he blows it all on drugs and alcohol, rather than punish him, I should double his allowance?
 
SSP
2008-05-22 05:50:54 PM  
WTFDYW: /perhaps we should double the tax of oil company profits because oil companies haven't doubled the number of shareholders...


Oh yeah, that's about as smart as the belief that ALL corporations should pay more taxes. Who the hell do you think is gonna pay those taxes? YOU AND ME through higher prices.

Lets face it, so called "big oil" makes 9% profit on their goods, no more no less. Now, lets look at any other type of business there is whether it is food, clothing, toys blow up sex toys or what ever. The profit margin of these company make the profit margin of oil companies look like a welfare check.

It's just that the oil companies move such an extremely much more volume that they are profiting so big a number of dollars from such a small margin.


If their costs to find, extract, refine, and distribute gas haven't gone up much from $25/bbl crude, then the jump from $25 to $130 in the last couple years is all profit.
 
2008-05-22 05:51:01 PM  
A third option where you don't base pretty much your entire economy on a single product that's supplied by a handful of companies.
Even if it doesn't involve petroleum products, I guarantee it uses oil in shipping it to market and in getting the customers there as well.


Excellent LONG TERM plan. Now, what's your plan for the next 12 months or so?
 
2008-05-22 05:54:05 PM  
JDerek: You beat me to this. So, Remove all Republicans, by your logic, if I give my kid an allowance, and he blows it all on drugs and alcohol, rather than punish him, I should double his allowance?

No, you should up your tax contribution in order to fund committees that will investigate the effects of alcohol sales to minors and fight the war on drugs.

This committee will meet in Oahu.

At the Hilton.
 
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