What would be a FAIR PROFIT on a gallon of gas?

One of the problems is people dont understand profit and profit margin- the profit margin for oil companies is between 5-9%, there profits may be in the billions- of course a lot of people think getting oil out of the ground is free and that when the oil companies are allowed to drill, the money appears out of nowhere- it doesnt. Also- who owns oil companies? Everyone with a retirement fund pretty much.

I will never agree with a CEO getting a $40 million bonus but the larger issue is radical environmentalist that have stalled refinery construction and new drilling- both which are needed. We need a short, medium and long term energy plan which looks at ALL sources of energy- oil short term and serious efforts for alternatives for medium and long term.

A better question would be, what would be a fair profit on a barrel of oil? The crude producers are the ones that are profiting the most from this insanity. The cost of obtaining crude oil has not really increase dramatically over the past 7 or 8 years but the price of a barrel of oil has increased some 600%! Talk about gouging.

Why do people assume that oil companies make most of their money on gasoline ?

Chevron just released it's first quarter financial numbers.

They made around 5.3 billion in profit.

But the profit they made from refining oil into gasoline, was just 220 million, down 84% since the first quarter last year.

People do realise, that the oil companies, have to BUY 65% of the oil they refine into gasoline, from other countries,

Right ?????

It's so funny how americans think they somehow or thier politicans control the worldwide price of oil.

Or that the american oil companies control the price of oil.

There is no notion in the science of economics of fair profit. When profit rises, there is an incentive to produce more. This increase in supply results in lower prices and less profit. When profit falls, there is an incentive to produce less. This decrease in supply results in higher prices and more profit. As you can probably figure out, if the government interferes with this naturally occuring market mechanism, such as by taxing high profits, the government action will be counterproductive.

Look at it another way:

I believe the oil companies need to be nationalized and the profits go back to the people in the form of lower taxes.Same with our communications systems.

Where I live in China as a transplanted American, both are nationalized and a gallon of gas costs about a buck less, and my cell phone bill is obscenely little. About $15 a month and I use it extensively.

Plus, I pay zero sales tax, and tax on a home is very small to non existent, plus I have no income tax, despite that I make considerably more then the average person.

Think about it.

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Life is so simple, but we insist on making it complicated

Confucius

551 - 479 BC

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Peace

Jim

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Beg pardon, that's voodoo economics... the oil in the ground costs nothing, just like the water flowing over our hydropower dams. The labor and equipment to pump it has increased but nowhere near the current price increase. Get the fanatic environmentalists out of the political mainstream and we (the U.S.) could be energy self sufficient in less than a year.... with fuel at a reasonable price ($2 a gallon). Then OPEC and their satellite hemrrhoids could wallow in their own oil.

I'm fine with market forces dictating gasoline prices.

What I'm against is giving millions (make that billions) in tax dollar subsidies to an already profitable industry. We must also ensure that no market manipulations occur such as intentional underproduction, etc.

p.s. - even if your stats are accurrate, 9% is significantly above the average profit percentage for nearly any other industry. That would mean roughly 10 cents on every dollar is just for yachts and mansions.

what proportion circumstances I actual have suggested the comparable difficulty. besides to the tax government places on the gas in addition they mandate formulation, an extra value and the EPA is throughout each and every thing that deals with oil. upload all that to the reality that we've not geared up a refinery in this united states of america in approximately 30 years. If the oil companies have been like Radio Shack you ought to triple the value of gas. as quickly as I labored for the Shack our gross income became fifty one cents out of each and every greenback and the middle guy had approximately the comparable mark up. are you able to think of oil companies doubling the value of production whilst the sell the product to the middle guy then having him double the value accompanied by ability of a save doing the comparable difficulty. gas ought to quite value $10.00 a gallon in the event that they took the salary that maximum companies take. EDIT: Then we've some rocket scientist in Washington DC who have not found out that the only individual who particularly will pay taxes is the perfect shopper. each and every of the taxes placed on organization (regardless of what's taxed) are surpassed directly to the patron. we've some actual geniuses in that 27 sq. miles surrounded by ability of actuality we call the nationwide Capital.

this business of every time someone shoots at a boat the price goes up is ridiculous.

It is good motivation for the middle east to stay unstable in the name of profit and thats where it is unethical to make huge profits in those circumstances.

If they were making more money for job well done is acceptable to me but they should be suffering like the rest of us because of conflict not making record profits. let them pay for the war and see how long the war last

Profit MEANS NOTHING....

I'll give you an example. I buy a business...I then create another business and hire business #1 to manage business #1. I pay myself a salary from business #2 and make sure business #2 charges business #1 more money than they make as the management fee...I just eliminated profit altogether and still get rich...

Halliburton does eliminates profit by buying more stuff.

and Oil companies can eliminate profit with similiar stategies, the easiest being, raise the salary of the the CEO