View Single Post
Old 09-17-2006, 08:06 PM   #1 (permalink)
ASU2003
immoral minority
 
ASU2003's Avatar
 
Location: Back in Ohio
Are the gas prices being controlled to change the outcome of the midterm elections?

Unless you have been under a rock, you have noticed that gas prices have come down a lot recently. On Aug 21, I paid $3.499 for a gallon of gas (true it was in the middle of the AZ desert, I only bought 2 gallons in order to get to where it was $3.20). Today, I saw gas for $2.059/gal in Ohio.

Now, I know that the price of a barrel of oil on the commodity market has fallen from ~$75 -> ~$63. But why would a ~15% drop in the price of the barrel cause the price of a gallon of gas to drop -33%?

I'm not sure if these numbers are accurate or not, but someone else quoted them on another forum.

Percentage breakdown in the cost of a gallon of gas:
47% crude oil market price
18% refining costs
23% taxes (I don't think taxes are that much, and aren't they a fixed amount)
12% distribution costs
?% profit

But, I'm sure the percentages change when the price is $3.50 versus $2 versus $1. And the auto gas part is only ~19.5 gallons out of 42 gallons of crude.

Last time the prices were this low, a barrel of oil cost around $50 (March 2005 by my records)

http://en.wikipedia.org/wiki/Image:O...Short_Term.png
http://en.wikipedia.org/wiki/Image:G...Short_Term.png

So, were the oil companies just charging us more money for the past two years because they could (would it really be $90 -$100/barrel that would cost $3/gal, and they were taking the extra money in profits)? Or do the politicians worry about the challengers using the expensive gas argument against the people in office right now? And what has really changed in the world in the past 3 or 4 weeks? The Iran situation hasn't really changed, Iraq hasn't really started to produce too much, they have to shut down the BP pipeline in Alaska for a while to fix it, the demand for gas hasn't changed, there is no competition from alternative fuels yet, refinery costs haven’t changed, and taxes haven’t changed. The oil companies might be taking a lot less in the way of profits though, we will find out when the next quarterly statements come out. The only positive thing that might reduce the price is that they found some more oil a long way down in the Gulf of Mexico, and the summer driving season is slowing down.

(Just to clearify, I am complaining about lower gas prices , and it probably is just the normal market forces at work, but it always seems to benefit the right people at the right times)

Last edited by ASU2003; 09-17-2006 at 08:09 PM..
ASU2003 is offline  
 

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360