The price of gas is obviously a pretty hot topic right now. Gas is about 3.92 for Regular Unleaded in Oxford right now. I spoke to a co-worker in central California and he's paying about 4.48 for the same thing.
I hear a lot of talk about how it's not really the oil company's fault, that they're just trying to get by like everyone else and it makes me want to puke. Sure there are economics involved, i.e. supply and demand, but if you honestly believe that's the only reason that gas is going up, you're crazy.
It's no coincidence that we're paying more at the pump than ever before and the oil companies are making more money than any other company ever in the history of the United States every year. 11.66 billion dollars every three months for ExxonMobil.
That's profit. That means after they paid all of their bills, employees, taxes, etc. they had over 11 billion dollars left over for a 3 month period!
To put that in perspective, that's roughly $38.30 per every person in the US.
If we looked at driving age citizens only and all of the oil companies' profits, I think we would find where that extra $50.00 towards gas we're paying is going every month. It's going in their pockets.
Now here's a little mystery that makes me think the oil companies are screwing us pretty good. Will someone explain to me why if I drive 90 miles away, I can pay $.15 less per gallon? In more populated areas, I can drive 4 blocks and get the same results. Why is that?
I thought there were no margins for the gas station owners. It's not their fault gas is so expensive according to everyone. They barely make any money from gas at all. I actually believe them on that, but I'm still left scratching my head.
A bag of chips costs the same amount whether I buy them in Mississippi or Alabama. So what makes gas so special that the price fluctuates so greatly? And it's not just taxes, unless there are city taxes on gas. To my knowledge, there isn't other than regular sales tax.
The reason that this is perplexing is because the price of gas goes up when something global happens. An oil field gets bombed in Kenya. Gas prices go up for everyone. Yet, I'm getting charged at a very local level. So if everyone is paying the same thing for oil, shouldn't the prices be the same across the country (minus state taxes)? Why is CA so much more expensive? What does this all mean? That gas prices are more arbitrary than the oil companies will admit. They say it's a set figure and they can't help it, but they can charge less in one area and much more in another. Seems to me that they're deciding how much it costs, not the "global market".
Oil people are sitting there yelling at the screen going "of course you idiot! It's all about supply and demand! Free market, free market, free....!!"
So let's look at a free market. What's a key factor in a free market. Low barriers to entry. What does that mean? It means that when oil companies become to monopolistic, someone can come along and start an oil company and undercut them. This stops the oil companies from over charging out of fear that an upstart will take away their business.
Anyone want to start an oil company? It's a free market after all. Oh wait. Nope, the barrier is ridiculously high, which means this idea that's it a free market is bullshit. So if it's not a free market what is it?
It's a monopoly. The oil companies are controlling the price of gas. Plain and simple. They raise the price on speculation and lower it only slightly when we complain loudly enough. Once the bitching dies down, they raise it again. Do not trust them.
Here's another nice fact about oil companies. They're complaining that if oil was cheaper, they would be able to provide cheaper gas. So please let us drill in protected wilderness. We'll do it without harming the environment.
Why is this bullshit? First off, they have consistently harmed the environment and shown no regard for the environment. Remember Exxon Valdez? Guess how much they paid for that mess? Umm, nothing. It happened in 1989 and Exxon is still appealing.
Second, they haven't drilled in all of the spaces they have available now. Why? It costs too much. So they want easier targets, like national parks.
Third, this is the same company that tried to drill protected wetlands in Florida because there was a drought and the land was no longer "wet". What a bunch of assholes.
The list goes on, but this post is long enough already.
In summary oil companies suck. They're proven liars and greedy bastards. Do not trust them.