Krauthammer on Oil
It comes down to three major issues, supply, demand, and fear. Supply and demand are easy, we produce less oil in the US, and Congress continually agrees to keep it so. We want more oil for our huge SUV's, but China and India want more for their industrial expansions also. So Demand is up. Supply is also limited by problems in Iraq, and Nigeria. The fear comes from Mullah's in Iran rattling sabres, and whacko's like Hugo Chavez constantly threatening to cut supplies. Those factors add up to a cost of $70 per barrel of oil, or $1.70/gallon of gas just on the raw end.
Now add in transportation to the US, refining and blending, more transporation to get the product to the pump, and you get an industry with under a 10% profit margin. On top of what they paid for their "product pipeline", you get to add state and federal taxes, and then as in the case of Wisconsin and many other states, required profit margins. Check with your state and see what the "minimum markup law" says the gas station is required to charge you over their cost.
While on the subject of 'Big Oil', since everyone was shocked that Exxon Mobile made an $8 billion profit last quarter, they should get the companies tax bills. Here's a link to their 2004 4th quarter report, (last one I could find online). Go down to page 9 and read the total tax line, $86,779,000,000. That's right, ~$86.8 BILLION in taxes for the company's FY 2004, or about 30% of gross revenue.
Granted, not all of that was paid in the US, but it shouldn't be, since they made over 75% of their money outside the US.
That's the reason I find congress looking at tax records laughable. Yes, they should cut some of the loopholes that are out there, but at the same time, while oil companies are making large profits, congress is getting fat tax checks from them already based on those profits.
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