Why is Gas so CHEEEEEP???!!!

It does not cost Exxon $70 a barrel to drill, extract and refine crude oil... There is a certain fixed cost... $70 a barrel is way above the threshold of what it costs them to produce, refine and distribute it..

 

I guess you got a job with an oil company. ******* !

 

Re-run your numbers, there are only 42 gallons in a barrel of crude. And you know what? Gas IS cheap.

 

This is a fun little topic.

For what it's worth, a barrel is 42 gallons. And according to most of the sites I came across, a little less than 20 gallons ends up being gasoline, so that would bring the cost up even more!

I remember David Letterman saying (in 2003 or somewhere around there) that gas is a total bargain. Even if it cost $20/gallon, the fact that you can add this stuff to your car and drive anywhere you want makes it priceless.

Of course, that's easy to say when you're extremely wealthy.

 

Your logic fell at the first hurdle (!)

It doesn't cost them anything like $70 a barrel to get it out the ground - I believe/understand its in the $15-$25 range depending on the oil company & where the oil is being recovered from.

I.

 

Iain nailed it. It doesn't cost 70$ to produce a barrel ... it's around 6-7$ in the Gulf area, up to 15-20$ in the notoriously expensive canadian oil sands.

However prospection comes at a price. A 10mix10mi parcel in Alberta costs over a billion, or numerous wells (several million bucks each) to find the right drilling place.

This being said, I still do think gas is ridiculously cheap. I'm very curious to see how globalization will handle the increase in transportation costs ...

 

That's one hell of a racket going on there.

And YET.... everyone is ready to raise hell or go postal when ATM fees go up.

 

Oil isn't 100% gasoline. When they refine oil into gas, they also extract other byproducts that they can sell.

 

Should be interesting when Horsefly joins in....

 

Where i live in Australia at the moment,unleaded fuel is around AU$1.35 per litre. The premium unleaded fuel is around AU$1.40 per litre and Diesel fuel is around the AU$1.48 per litre. They say all the time on the news that by the end of the year,the fuel in Australia may reach around AU$2.00 per litre. Mind you,im not complaining at all. Just thought id chime in and lets ya's know what its like down under.
So.................if you quickly work it out,say AU$1.35x3.78 litres(1 US gallon) of unleaded fuel =AU$5.10 per US gallon. Convert the AU dollars to US dollars-
US$3.94 per gallon here in Aus. Just a little more $$$$ here

 

A gallon of gas is not pure gasoline either, its maybe 60% the rest are additives and fillers as well.

 

I thought the Federal tax was 18.4 cents per gallon in Jan 2005 (not 18.4%, just that much per gallon regardless of the price). Then States can add theirs and same with local gov'tsl. I think in my area, Orlando, FL, it's about 45-50 cents of taxes in the gallon of gas.

Edit: Federal tax is 18.4 cents per gallon as of August 2005. 18.7 is average State tax and 8.8 is average tax for other reasons. 45.9 cents is the average tax per gallon in the US. The South's average is about 38 cents/gal and the Wests is about 54 cents/gal. Florida is one of the highest at 49.8 http://api-ec.api.org/filelibrary/Gasoline-taxes.pdf

 

I think you might also have to take into consideration the fact that when you produce anything in mass quantities, production costs drop. What really pisses off consumers is the fact that gas prices have risen so rapidly lately it's a shock every time you go to refuel. Hell, I bought my GTO in February and gas prices have risen about $1 per gallon since then. When you throw in the fact that Exxon/Mobil showed a profit of 8.5 BILLION dollars not even a month ago it really pisses people off.

Now, that being said, I haven't changed my driving habits at all due to gas prices. I drive because I need to, and because I want to. If I have to pay $3.60 per gallon for premium then that's what I have to do. However, when gas prices get close to $5 per gallon I might have to make some changes.

 

Nothing hidden about the real data

http://api-ec.api.org/filelibrary/ACF146.pdf

http://api-ec.api.org/filelibrary/Making-Sense-Oil-NaturalGasPrices.pdf
Slide 4

 

The first link is something I need to print out to show people who don't understand gas prices. The people I'm talking about are the ones that want gas to cost a buck a gallon for the rest of their and their kid's lives while having a great interest rate in the savings accounts/CDs. Pick one or the other, you can't have both.

I really don't care about $3/gal for gas. I only use 120 gallons a year. When I put it in that perspective, I only use 3 barrels a year for my car. That's a pretty good deal to have something like that delivered nearby where I can get any off tap.

 

BTW, a friend told me that gas is currently $.30 per gallon in Iran. (it was $.10 until recently) Now that's cheap!

 

My mom went to Iran a couple weeks ago and she said 40 cents. I don't think it has been 10 cents anytime soon. My dad went a couple years ago and said it was ~25 cents. But it could just depend on location. This was in Tehran.

 

Thanks for the great documents.
I have a book that says in 1979 in Saudi Arabia, crude oil that sold for $18/bbl cost $0.15 to produce for a 12,000% return. I wish I could figure out an investment like that.

 

Cocaine produced in large quantities.

 

Insane returns! Damn Sheik's

 

we try to make as much money pap

 

We can only try young fella

 

From 25 cents to 40 cents in two years? That's a 60 percent increase! Outrageous!

Consider they pay less for a gallon of gas than we pay just in taxes on a gallon.......I guess they don't have a monopoly on being an oppressive government.

 

Gas is cheap...at least here in the USA. When you take into account inflation and increase of wages over the last 70+ years, at $3.00 a gallon gas is cheaper than it was in the 1930s! Its like when you first moved out on your own...living expenses seemed EXPENSIVE compared to your parents paying for everthing. We have just gotten spoiled by paying way too little for gas in the past that $3.00 per gallon seems high...it's not!