Blah Blah Blog

9.03.2005

Gassed Up


$40.80. I can't believe it. I mean, I drive a Ford Focus. But before making a purchase at Gung Ho Bikes, I should at least make some comparisons to be sure this really is as alarming as it seems. How much would 12.75 gallons of other frequently consumed liquids cost?

12.75 gallons of soda machine soda = $68.22
12.75 gallons of Sweet Baby Ray's Barbecue Sauce = $114.75

Gas isn't so bad I guess. But why are the prices so high? I checked How Stuff Works to get the complete scoop on gas...

First off:
  • Americans drive more than 14,000 round trips to the sun per year in automobiles, light trucks and SUVs.
  • In the United States, something like 178 million gallons of gasoline is consumed every day.
  • The world oil supply acts like an asymptotic value, which is just a mathematical term for a value that gets closer and closer to another value, but never actually gets there.
Where our money goes:
  • The biggest portion of the cost of gas - about 45 percent - goes to the crude-oil suppliers.
  • The refining of crude oil makes up about 13 percent of the price of gasoline.
  • Distribution and marketing account for about 13 percent of the price of gasoline.
  • Taxes, including federal and local, account for about 31 percent of the total price of gas in the United States.
  • In order to stay in business, service stations have to add on a few more cents to make a profit.
Why the prices fluctuate:
  • Taxes are probably the biggest factor in the different prices around the country.
  • Competition among local gas stations can drive prices down.
  • Distance from the oil refineries can also affect prices - stations closer to the Gulf of Mexico, where many oil refineries are located, have lower gas prices due to lower transportation costs.
  • Military conflicts in parts of the world with lots of oil supplies can make it difficult for oil companies to drill and ship crude oil.
  • Hurricanes have damaged offshore drilling platforms, coastal refineries and shipping ports that receive oil tankers.
  • If a tanker itself is lost or damaged, or leaks its oil into the ocean, that will put a dent in the market as well.
Importing Oil:
  • Crude oil inventories have the single biggest effect on gas prices, and the United States depends heavily on foreign oil supplies.
  • In December 2003, the United States imported approximately 300 million barrels of oil.
  • The Organization of the Petroleum Exporting Countries (OPEC) is a consortium of 11 countries: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
  • These 11 nations are responsible for 40 percent of the world's oil production and hold two-thirds of the world's oil reserves.
  • When OPEC wants to raise the price of crude oil, it simply reduces production.
  • In April 2001, OPEC decided to reduce its collective production by one million barrels per day.
Domestic Supplies:
  • The United States is the world's second largest producer of oil.
  • In 2003, the United States produced about 5.7 million barrels of crude oil each day.
  • The biggest production region is around the Gulf of Mexico.
I think that just about covers it. It sounds like the prices should drop, but they never really drop back to where they were before a big spike, so the prices will continue to be higher than what seems reasonable. So what can we try? Hybrids or diesel engine cars? Car-pooling to work? Seeing how many hands are in the pie, its unrealistic to imagine an alternative fuel source being introduced to the mainstream anytime soon. I guess I'll grin and bear it - and be glad my Focus doesn't run on cans of Dr. Pepper or Sweet Baby Ray's Barbecue Sauce.

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I'm as discouraged by the rising gas costs as everyone else, but to call an oil supplier crude..that isn't going to make them go any lower.

Let's stop with the name calling and think of alternative means to get your gas. Anyone still have a syphon?
 
Try filling up a 2005 Dodge Ram with a 26 Gallon Tank. At Sheetz the gas pumps stop at $75 and it wasn't even full.
 
2001 Jeep Cherokee here. And at Hess, the pumps stop at $50. Ugh!
 
45%+13%+13%+31%=102% where is the room for the gas stations to add a few cents? Something is wrong with the math here, but what would one expect from a Web Designer?
 
Old Man... another nice attempt at a call-out, but you'll have to re-read the post: "I checked How Stuff Works to get the complete scoop on gas..."
 

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