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HIGH GAS PRICES GOT YOU DOWN?

I recently read this article and it reminded me of something I wrote a year ago but is extremely relevant to Coherent Thought. So some of the information may be relevant at the time like the info on China and the CEO, but it is still a good read.

Here are some interesting graphs to look at and I want you to look at them with common sense!

HIGH GAS PRICES GOT YOU DOWN?

Well you won’t get any sympathy from me. People that make a lot more money than me come and complain to me every day about the high price of gas and I’m tired of it.

The oil companies are making lots of money but their profit margin is only about 10% which is not good for any business regardless of how much money goes into the business. It’s about margin people not dollars.

The price is not dictated by the oil companies. They have to pay certain amounts for each barrel of oil based on the market. The price per barrel is very high right now because China and India are buying lots and lots of oil. They are using more than they ever have which is sending the price up. This is common economics. When demand is greater than supply the price goes up. Exxon and others like them can do nothing about that because they make up a VERY SMALL percentage of the oil industry world-wide.

The few million that Exxon gave it’s CEO for a retirement package was a small amount on the grand scale and if he gave it all back wouldn’t bring the price of gas down one penny!

Thoughtful Insight
Banks charge a hight interest rate to those they think are a higher risk. That is how they make money. Every business has intrinsic risks in it. So (and this is only speculation and not necessarily happening) why wouldn’t the gas companies raise prices right now due to the current unrest of some of our oil suppliers. It makes sense from a business point of view.

Also, why are we mad at companies for making profit. It helps dramatically stabilize and strengthen our US Market. If a farmer that harvested corn (keep in mind his cost is set up months in advance) took all this corn out of the ground at the same time some great discovery was made about corn that made everyone want it. Would be mad at the farmer for making more money than he would have originally. NO because the market dictated his price not the farmer. The same is true for the oil industry.

For many years now gas prices have not kept up with inflation. What does this mean? It means we’ve been making more and paying less for gas than we should be compared to everything else.

Another interesting fact about gas is that the Government makes a lot more per gallon on gas than the oil companies do. Their taxes on the gas is more than the oil companies make per gallon. So when you hear the news media or a politician blame the oil companies keep in mind the Government could greatly take some of the burden off. They would rather take the money away from the oil companies though who actually produce the oil, and if they don’t make a profit they won’t make fuel. Then we’re in big trouble!

I could go on and on with my explanation of the way things work but I hope this enlightens you a little. If you have any questions feel free to ask. Snide remarks, lay em on me!

I too wish we were paying less for gas, but even at the current price gas is a BARGAIN! for what you get out of it and compared to the rest of the world.

This entry was posted on May 16, 2007 at 11:09 am and is filed under Gas Prices, Jeremy, Coherent Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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10 Responses to “HIGH GAS PRICES GOT YOU DOWN?”

  1. RBuffordTJ says:
    May 16, 2007 at 11:29 am

    Agreed, but you will never get the average person to agree with you on this one bro because the brain washing, leftist media is blaming it on the wrong people. Just look at the whole “man made” global warming hoax, it’s crap with no scientific evidence to back up the claim we are causing any type of warming…but the media has the average person convinced.

    The current Clinton idiot (no a party jab, just a personal one, she is an idiot) running for President said “I will take the profit away from the oil companies”. Oh really? Hmmmm, seems the government is already a large part of the gas problem, now she is talking about full out communism to fix our problem. What problem you ask? The one that our country is a Republic of the people, by the people, for the people! She wants to fix that for you.

    Wake up America!
    Bufford

  2. Jeremy says:
    May 16, 2007 at 1:06 pm

    Bufford,
    That is so true! Let’s take the average price of gas around the country right now. It’s $3.10 and the average tax on gas is 19% so that means that the government is getting $.59 for every gallon of gas we buy. That is way more than the oil companies.

    People need to start asking the government to give up some of its revenue to help bring the price of gas down!

  3. sbrammer says:
    May 16, 2007 at 10:38 pm

    I know this list is long, but it puts some things in perspective as it relates to one gallon:

    Liquid Size (ounces) Per Container Per Gallon
    tap water 41708928 $120.00 $0.00
    Folgers Coffee 998.6 $5.50 $0.70
    unleaded gasoline 128 $3.059 $3.05
    Kool-Aid 256 $3.69 $1.85
    Clorox bleach 128 $2.20 $2.20
    lowfat milk 128 $3.79 $3.79
    automotive antifreeze 128 $4.19 $4.19
    Coffee Mate 64 $2.77 $5.54
    Carlo Rossi blush wine 135.6 $5.99 $5.65
    egg (chicken) 2 $0.09 $5.76
    Evian spring water 33.8 $1.69 $6.40
    Coca-Cola syrup 640 $40.99 $8.20
    Budweiser 12 $0.83 $8.88
    Windex 67.6 $5.39 $10.21
    Pentrex plant fertilizer 128 $12.95 $12.95
    Hershey’s chocolate syrup 24 $2.48 $13.23
    Kikkoman soy sauce 40 $4.79 $15.33
    latex house paint 128 $16.50 $16.50
    Jamba Juice 22 $3.75 $21.82
    Liquid Nails 10.5 $1.97 $24.02
    Soup Peddler Soup (delivered) 32 $7 $28
    Red Bull energy drink 8.3 $1.99 $30.69
    Armor All 16 $3.99 $31.92
    Head & Shoulders shampoo 25.4 $7.49 $37.74
    Rain X 16 $4.99 $39.92
    Absolut Vodka 59.3 $26.99 $58.26
    Roundup herbicide 320 $158.00 $63.20
    grapeseed oil 30.4 $16.50 $69.47
    Renu contact lens solution 12 $7.69 $82.03
    Tabasco sauce 5 $3.69 $94.46
    Robitussin DM 12 $10.29 $109.76
    fresh squeezed wheat grass 2 $1.95 $124.80
    vanilla extract 8 $7.99 $127.84
    Liquid Paper 0.6 $0.93 $198.40
    scintillation cocktail 132 $216.00 $209.45
    Penicillin 8.47 $19.95 $301.49
    Punky Colour hair dye 3.5 $8.95 $327.31
    patchouli oil 8 $50.40 $806.40
    Cover Girl nail polish 0.4 $2.79 $892.80
    human blood (processing fee)
    16.9 $200.00 $1,514.79
    GHB 1 $20.00 $2,560.00
    black ink from an ink cartridge
    1.42 $29.97 $2,701.52
    mercury 11.52 $309.00 $3,433.33
    insulin (Humulin L) 0.34 $25.00 $9,411.76
    Chanel No.5 perfume 1 $200.00 $25,600.00
    LSD 0.125 $120.00 $122,880.00
    Thailand cobra venom
    0.67 $800.00 $152,835.82
    scorpion venom
    0.0067 $2.034.00 $38,858,507.46

  4. amyjo says:
    May 17, 2007 at 11:29 am

    I just get confused because I had several classmates who lived out of town and drove to classes everyday. They complained all of the time about the gas prices, yet they still drove their big trucks and SUVs to and from class. I know that Jeremy and I don’t have fuel efficient cars by far, but we are not complaining about the prices being high. I do not see the reasoning behind the complaints. The points you both bring up are interesting. How much do Americans spend on gallons of milk per week or alcohol. What kind of profits are those companies making? I don’t know, that is why I am asking…

  5. DRUM57IX says:
    May 23, 2007 at 12:43 am

    I have an idea for you to add on to the whole “the government could help us out at the pump” thing…

    I do not like the UN…mainly because not a whole lot gets done in there…One place wants to do “x” in country “y”…but country “y” doesn’t want country “x” in their country…so they fight, bicker, and nothing gets done…

    The US gives the UN more that 75% (the figure is waaaay higher…) of its funds…and for what..for communist countries to take that money to commit autrocities in Rwanda, and Darfur, and for those countries to be protected…its all a political game in there…and I’m sick of the UN. Period…

    I say that we cut our billions of giving to the UN to match that of the 2nd highest giver…which I believe is the UK….We still hold a lot of authority and power in the UN then, and we get to keep a lot of money within our own economy…

    I say we distribute that money to the governement that money on a yearly basis to function better…lower taxes to a flat tax of 7-10%, give some to look for better fuel efficient “alternatives”, and give whats left back to the tax payers…

    The only way we’re going to be able to lower gas prices is if we use our own gas…i.e. USE THE ALASKAN PIPELINE…but other than that, I don’t think there is much we can do against oil companies themself….

    simply…don’t give so much to the UN…and use the billions within our own economy, government, and research labs…

    I dunno…maybe I’m just crazy….

  6. Jeremy says:
    May 23, 2007 at 12:42 pm

    I wouldn’t mind getting out of the UN but I don’t think that money would do anything to bring the price of gas down. It would take some interesting funneling of the money in order to do that.

  7. Ways To Increase Gas Mileage says:
    August 2, 2007 at 3:56 pm

    Ways To Increase Gas Mileage…

    Just driving to work eats away an hour’s worth of work for some of us. Fortunately, there …

  8. DangerousNate says:
    April 14, 2008 at 9:24 pm

    Thanks for the insight on that, I guess insurance companies are doing the same thing as the oil company then.

    So it seems anyway.

  9. DangerousNate says:
    May 21, 2008 at 1:18 am

    Actually, its not the oil companies who’s messing up the prices (though they’re not exactly doing everything they can to help them) its those future market traders!

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