Begle1

Okay,

So WHO exactly is profiting off of gouged Diesel prices?

Or are oil prices actually gouged?

edwinsmith

This is such a common question but people don't stop to think about the presupposition that profits are somehow evil.

The answer literally is, everyone who handles the crude oil and refined fuel profits. That's the reason to be in business is to profit. If you're in business then you charge the highest price you can get for whatever you're selling. The price is only limited by competition. Competition is usually limited by government action of one sort or another. Whenever competition is limited then the price will be higher than it otherwise would be.

These facts are obvious to anyone who isn't blinded by the prejudice that profits are evil.

Economics 101

Edwin

infidel

One thing that isn't real fair to the consumer is that the oil company's profits increase incredibly as the price of fuel increases since they tack on a certain percentage for profit.
If they would keep their profit the same dollarwise instead of doing it by percentage then fuel prices would be lower.

This is why the Windfall Profits Tax Act was passed last time fuel prices soared in the '80s, but the bill has expired. The bill has been reintroduced to congress again but doesn't stand a chance of passing with the republicans in control.

Redleg

The oil companies are loving it. They still pat the guy the same an hour to pump the stuff weather it's $1 a gallon or $2 a gallon.

The gas stations are lovign it, don't let them tell you they are the innocent victim. What's the standard mark-up on retail, 30%? $1 a gallon they make 30 cents, $2 a gallon they make 60 cents. One could conceivably keep his profits down to the 30 cents a gallon and get extra business flowing in or create a gas war right? Why isn't this happening? Maybe corporate agreements?

The states are loving it. How many of your states out there are operating in the black? Higher prices = more sales tax coming in. Same with the Feds.

infidel

If I'm not mistaken the tax is a fixed amount per gallon, the only amount that increases with fuel price is state sales tax if there is any.

edwinsmith

I've never has to pay a "sales" tax in addition to what's on the pump. If there is a sales tax it's already figured into the pump price. What's on the pump is what you pay and all taxes are included.

Edwin

Redleg

Yeah, it's figured into the pump, pump displays out-the-door price, 6% here.

FATCAT

The prices are high due to speculation on the commodities market. Investors are driving up the cost of oil on the stock market. OPEC has a target price for a barrel of oil at $30 somthing. But the speculators are betting the price of oil is just going to go up and they purchase future contracts at ever higher rates ... The world wide demand for oil has not doubled ... just the price.

Hint, hint ... this is very similar to the out of control speculation of the DOT.COM stocks in the late '90's ... then the DOT.COMs turned into DOT.BOMBs. The same will happen in time to oil.

doomgaze

This used to be true. It was either $25 or $30. However, within the last few months OPEC announced it is now targetting $50 or $55 a barrel.

durasmack

Biodiesel is going to be the way to go here before long........

edwinsmith

Depending on the price of soybean oil, it's probably cheaper to brew your own. If you have a good source of WVO you can start now.

doomgaze

I would say its the way to go NOW!

I think that we're nearing the tail end of the oil reserves in the world to be honest. China's consumption is growing exponentially. I would not be one bit surprised if all the oil is dried up in 10 - 20 years.

Now is the time to be investing in alternate forms of energy. Soybeans are a no-brainer. Support American farmers and reduce emissions. Makes me furious that there is a PERFECTLY viable energy alternative sitting right in front of all of us with nothing but positive attributes and yet so few people are doing anything about it.

edwinsmith

Oil won't be gone in 10 or 20 years but it WILL be a lot more expensive. What isn't well known is that the so-called "known reserves" are reserves of oil which are ecnomically recoverable. If it costs to much to get the oil out of the ground and refine it into fuel to sell at the current price then it isn't counted as a reserve. When prices go up however those previously "un-recoverable" resources become economical to produce.

For example, oil shale and oil sands, are difficult to get crude oil out of and largely unprofitable but there is enough oil sands in the Athabasca fields in Canada to supply North America at current rates of consumption for 300 years.

It's true that we will probably eventually run out of oil and coal and natural gas but not for a very long time yet. (However there is some theories that oil is produced by the action of heat and pressure on deep deposits of carbonates with water and is nearly inexhaustible.)

We aren't running out of energy anytime soon, we're just going to have to pay a little more.

Biodiesel is attractive to me because I can get some land and grow my own fuel. I think there is more than enough extra cropland in the USA to grow all the oil we'll ever need.

Edwin

infidel

A Chinese company was in the process of buying a large US biodiesel company a month or so ago.
The Chinese are no dummies, they know which direction things are going.

Chinese scientists have also developed a new type of nuclear reactor that is totally safe, inexpensive and can be mass produced on an assembly line. Many nuclear scientists say this new design is so safe that even massive operator error or equipment failure will release no radiation into the environment and the design will render older nuke designs obsolete.

In this country too many of the politicians make their fortunes off of oil, that's why we are so slow to develop alternative energy when we are totally capable of doing so. The US used to hold the technological edge on the rest of the world. I'm sad to say those days are over due to an administration that doesn't believe in science and spends large amounts of money to fight change.

edwinsmith

I don't know that that's true or not but we do have an irrational phobia concerning nuclear power. To many baby-boomers went through to many "duck and cover" exercises in school so we're scared to death of anything "nuclear." In fact, nuclear power is much more safe than coal or oil and much less polluting. Coal releases much more radiation into the atmosphere than nuclear plants but is totally unregulated in regards to radiation.

Natural uranium is hardly radioactive at all and even enriched uranium is only slightly more radioactive. People have the irrational belief that the longer the half-life the more radioactive and more dangerous it is when in fact just the opposite is true.

In China, they have a totalitarian government which dictates what will be used so they don't have a bunch of tree-huggers filing lawsuits over every little technological advance. They just go ahead and use it, shoot the tree huggers and bill their families for the bullet.

Edwin