Jesse624 wrote:

I'm not a chemical or refining engineer but I've been told that out of a barrell of crude oil, many cuts of distillate and grades can be obtained. But only within a certain band range of processing. Meaning you can't get all gasoline or all diesel or all bunker fuels out of the barrel. At various processing pressures and temperatures (cracking points), various petroleum products are direvied. Diesel has it's cracking band limits, and gasoline has it's band limits as well. Some times these cracking band limits lap over one another and will allow a degree of blending to take place, but there are limits for gasoline and diesel recipes, with respect to octane, flash points, wax, viscousity, etc. So really, only so much diesel can be produced out of the barrel of crude oil. I believe much more gasoline can be obtained as compared to diesel. Also the world demand now for diesel is much more in demand than gasoline,based on availability, especially overseas. All of these factors, plus taxes levied on the fuel, contributes to the seemingly outragious prices we are paying at the pump. I can only be grateful that I don't live in most other countries where the diesel cost is much, much more that here in the U.S. It has been, and probably always will be "world supply vs. world demand". Diesel production is just not as plentiful as gasoline world wide. As I see it, for the last 40-50 years, we in the U.S. have most fortunite to have diesel as cheap as it was. It's only been in last 4 yrs or so that we now paying what the rest of the world has had to pay, more or less.
I don't like the high cost either, but demand is high, and until demand starts dropping, the costs will keep pace. I know my RV'ing is being cut back to a degree because of the diesel cost. TMTCW Hope to see ya down the road.

Dog Trainer wrote:

One statist that I heard was that about half of the profitt of the oil companies are being paid in state and federal taxes.

Daveinet wrote:

I've not been posting much, but this one gets me.

Its all very simple. There is a higher demand for diesel, as compared to gas. Why do you think we are buying gas from Europe??? Because their refineries are setup for a disproportionate supply of gas compared to diesel. They are selling gas to us somewhat cheaply because THEY HAVE AN EXCESS OF GAS. They are trying to sell off the excess, so it is driving the gas price down. If the world refining process was set up to match the market, gas prices would be nearly as high as diesel.

To go after big oil will only result in that punishment being passed on to the consumer. You can't bite the hand that feeds you. Creating an excess supply is the only way to drive prices down. Nothing else will work.

ThunderingQuiet wrote:


OK I'm pretty clueless about things like this, but aren't taxes taken out before you total up your profit?

david_42 wrote:

Refiners are exporting seven times as much diesel per month than they were four years ago. Also, they can add tiny amounts of biodiesel to a tanker, get a US tax credit for the whole load and export it!

Nomadac wrote:



Gross Sales minus Cost of Goods sold equals Gross Profitz(which is before all taxes are deducted), which is what the media reports. Gross profits minus all of the expenses equals Net Operating Income. The Income Taxes are the last thing deducted to arrive at the Net Income.

"Congress scapegoats oil profits. In reality, according to Ernst & Young, from 1992 to 2006 the U.S. oil industry spent $1.25 trillion on long-term investment vs. profits of $900 billion."

Truth is, oil industry profits are in line with the rest of American industry. In 2007, a record year, they earned 8.3 cents per dollar of sales. Beverage companies and cigarette makers, by contrast, earned 19.1 cents. Drug makers, 18.4 cents. Indeed, all manufacturers, 8.9 cents on average, made more than “Big Oil.”

Another theme during the Senate Hearins of Oil Company Execs.was that, if anyone is “gouging” consumers through the high price of gasoline, it is federal and state governments, not American oil companies. On the average, 15% percent of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits. These figures were repeated several times, but, strangely, not a single Democratic Senator proposed relieving consumers’ anxieties about gas prices by reducing taxes.

If you are upset with the cost of gasolene or diesel why don't blame Congress and those that have not done anything to develop an Energy Policy? The Environmentalists oppose every Refinery construction or expansion, so where is your ire about their lawsuits?

It seems to me that the General Public should do some research into the subject before they blame Big Oil for all of the Problems. Supply and Demand functions, accounting principles, etc. are not understood by the average individual, IMO and buy into the Media and Politicians propaganda.