Why is Gas so CHEEEEEP???!!!

Not when you consider the average Iraqi income.

 

There are 42 gallons of crude in a barrel at ~ $70 per barrel. However, after refining & processing, that 42 gallons becomes a little more than 49 gallons due to additives and processing changes (cracking, etc). Also, the other components that aren't gasoline (diesel oil, heating oil, jet fuel, kerosene, etc) also have a high value per gallon.

The spot price for processed unleaded gas is ~ $2.00 per gallon. So $70/49 is $1.43 for the average cost per gallon of all the various petroleum products, so the difference of $0.57 represents the transportation, refining costs, refining profits, cost of additives, etc. Relative differences between the $/gallon of the various petroleum products would be determined mostly by the demand for that product at that time of year (heating oil in winter, etc).

The difference between the pump price of $3.35-3.50 and $2.00 is the transportion/distribution costs, taxes and distribution profits.

http://www.energy.ca.gov/gasoline/whats_in_barrel_oil.html

 

I had no idea the Iraqis crossed the border into Iran to buy gas. jk...

Speaking of the std of living, my dad said he saw Toyota SUVs and Nissan Muranos for sale in showrooms for $80K USD (eighty thousand). They like to tax the crap out of imports apparently. Mercedes decided to build a plant there to make some cars instead of being taxed. My dad said he saw a few Ferraris there (sorry NNO, no serial numbers ). He said a few TRs and like a 308.

Edit: He also said some of the housing in Tehran is kinda expensive considering the low avg income over there. Condos are easily $250k+ He says he has no idea how they afford their stuff. They don't even have credit cards there! No cable internet either because no coaxial cable anywhere. All either dial-up and maybe DSL, not sure about that.

 

Heck, I'm gonna start running my car on milk, it's cheaper!

You know you can do that, right? I read it on the internet! ROFL

 

So then, how were these same costs allocated when gas was at $.99, or even at $1.29? They couldn't have been using the same margins for transportation, refining, etc.?

There's some big-time swindling going on by the big boys. I mean, why not bump up the pump price to $7 a gallon? I'll bet demand in the U.S. would only drop by maybe 20%; then they can measure quarterly profits in 50 billion dollar increments, and the stockholders will be happy.