|
|
May 5, 2008 |
May 12, 2008 |
May 19, 2008 |
|
Distribution Costs, Marketing Costs and Profits |
$0.13 |
$0.06 |
$0.06 |
|
Crude Oil Cost |
$2.86 |
$2.96 |
$3.03 |
|
Refinery Cost and Profits |
$0.24 |
$0.23 |
$0.19 |
|
State Underground |
$0.01 |
$0.01 |
$0.01 |
|
State and Local Sales Tax |
$0.29 |
$0.29 |
$0.29 |
|
State Excise Tax |
$0.18 |
$0.18 |
$0.18 |
|
Federal Excise Tax |
$0.18 |
$0.18 |
$0.18 |
|
Retail prices |
$3.90 |
$3.92 |
$3.95 |
_
So where in here is that absurd, price gouging margin put in by the evil oil companies?
$0.19 to operate a refinery is not a lot. A lot of the time we they make little to nothing, especially given all the complex technology need to make modern fuels that meet environmental and performance specifications.
This is from the California Energy Commission and their page has a brief definition of the different margins.
This is a continuation of this post on profit margins.
Note: I’m a little confused about what numbers their providing. The CEC says the numbers are supposed to be gross margins, but gross margins is supposed to be a percentage. So I’m going to assume that when they use the word “profit”, they mean net profit.
I’m not sure providing a three week snapshot of net profits provides an accurate representation of the money oil companies are making. Also, some companies (including Chevron) are vertically oriented, which means they make money on both the distribution and the refinement.
Since my last comment dealt with 2007 net profits, I decided to go back and look at those numbers.
Last year, the average profit for distribution and refinement was 75 cents/gallon. However, profits were as high as $1.35/gallon and as low as 35 cents/gallon.
When they were making $1.35/gallon, gas prices were $3.46/gallon.
Point being, oil companies don’t always make as little as 25 cents a gallon and based on historic values, it seems that they are making three times that amount on average.
I will still concede that OPEC is out of control and crude oil costs definitely need to come down. However, I haven’t heard American oil companies doing anything or putting any pressure on OPEC to do anything of the sort.
By: Andrew Ferguson on May 25, 2008
at 11:16 pm
[...] Start with $4/gallon and Pointing Fingers and then continue reading with Price Breakdown of Gas. [...]
By: Andrew Ferguson dot NET » Cost of Gas on May 25, 2008
at 11:24 pm
I’m also a little confused about the exact definition behind CEC numbers but it was the best/most reliable source I could find readily. Let me know if you see anything better.
I listed the most recent price breakdowns because it’s right now, not last year, that we’re having Congressional hearings. It is very true that oil companies have not always had such small profit margins, which is why I find it so humorous/aggravating that it now that the finger pointing is occurring.
By: audreyln on May 26, 2008
at 4:16 pm
Thanks for inviting everyone over for the fun from your blog Andrew!
We’ll try to stay away from the he-said/she-said… LOL :)
By: audreyln on May 26, 2008
at 4:20 pm
Hi, I’m Sumocat from Andrew’s blog (I don’t live there; I just visit) with a couple of points. First, people like to complain a lot, but these gas prices really aren’t so high that many are changing their lifestyles or workflows. When the oil companies start complaining about plummeting sales, then I’ll believe rising gas prices are really affecting people.
Second, the guys who should be complaining are the station owners. Once upon a time, station owners made enough money selling gas that they could hire people to put the gas in your car. Now, even without attendants to pay, they make no money on gas. Instead, they are forced to sell goods. Only problem with that is when people spend more money on gas, they have less money to spend on empty calories. A problem is brewing, and it will be interesting to see how it all pans out.
By: Sumocat on May 26, 2008
at 6:18 pm