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Having seen the prices go into what I consider the realm of absurdity, I cannot be happier that I'm a cyclist. With all the normal upkeep of a vehicle, paying 1.03 a litre (Appox 3.92 Cdn/Gallon) seems utterly beyond the scope of reasonable. As a point of reference, that's a price I saw on my way home today, and it's -down- from where it's been the last week or two.
Get bikes! =)
The vulgarity of financial education in this country is highlighted each time any company, not currently in pop-culture's favor such as tobacco or oil, reports a profit. Coke and Pepsi can make more profit on a dollar of sales selling brown sugar water and it is always the oil company that gets charged with financial rape.
Here are some interesting profit margins that might help clarify.
Pixar 52.90%
Dreamworks 22.62%
Gannett Co. 15.37%
K-Swiss 14.80%
Abercrombie and Fitch Co. 11.99%
Exxon-Mobil 9.75%
Waste Management 9.04%
Conoco Phillips 7.44%
Chevron 7.11%
So for every dollar that a consumer hands to Pixar 52.9 cents is profit. Gannett keeps 15.37 cents profit and Exxon keeps only 9.75 cents. These are only a few examples but the list of companies that make more profit per dollar of revenue than the oil companies is extensive. Hell, there is a whole list of Financial Services companies with profits of over 1000% with some as high as 9000%.
Over the past 25 years, oil companies directly paid or remitted more than $2.2 trillion in taxes, after adjusting for inflation, to federal and state governments—including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period.
State taxes vary from 14 cents in Wyoming to more than 44 cents per gallon in New York. The fedreal tax is 18.4$ per gallon. Oil company profits can range from approx. .07$ to a disgusting .09$ per gallon of gas sold. So who the hell is screwing who?
One can look to the government and the liberal establishment as reasons for these prices as well. Look at the writings of such soothsayers like Al Gore. He and his ilk have been endorsing higher gas prices for years saying 'it's what America needs to force conservation on them out of necessity'. Dorks. Damnedest thing with all these higher fuel prices, OUR CONSUMPTION HAS INCREASED! We haven't built a new refinery in the US in about 30 years. You cannot drill offshore near 'my state', heavens forbid. Have we built a single new nuclear power plant in the US since the 'China Syndrome' & Three Mile? Could be wrong, but to my knowledge we haven't. Don't drill in ANWAR!!! It could upset the mating habits of the caribou in this millions of square mile emptyness. Even though the opposite effects have been studied near the Alaska Pipeline. The best gripe of all came from Miss America Hillary, quote "...it could take as long as ten years for this oil to ever make it to market & some experts don't believe the amount will have any effect on the global market..." So, if you and your husband had done something similar when you two where setting energy policy this oil would have possibly been flowing for a couple of years by now?
As an international commodity, crude oil is bought and sold 24 hours a day, so its price is changing constantly. In the matter of a day or two, crude oil prices can move up or down by several dollars, depending upon supply and demand factors. Especially everytime the nutjob in Tehran opens his piehole the price of a barrel jumps 3$.
This is slightly off-topic, but I would recommend people to read Future Imperfect - especially the last section entitled Environmentalism, Resources, and Why We Should Worry About Global Warming But Not Just Yet.
Allow me to throw in my lack of sympathy at your gas prices. I dream of gas prices that low. Here in England I pay 7.9 USD per gallon, wait until you're paying that and then talk to me.
The price of soda doesn't have an impact on the economy. You forget that when the price of gas goes up everything under the sun goes with it.Quote:
Originally posted by Dorain
The vulgarity of financial education in this country is highlighted each time any company, not currently in pop-culture's favor such as tobacco or oil, reports a profit. Coke and Pepsi can make more profit on a dollar of sales selling brown sugar water and it is always the oil company that gets charged with financial rape.
I know a lot of people are pissed at Exxon-Mobil for making record profits but I don't see it as their civic duty to give money away and beyond that, they are actually helping create supply.
I think its important to look at it from a business perspective.
If Exxon-Mobil tries to make 11% (just making up a number here) ROI then their profits should go up as the price of gas goes up.
I know this is way over simplified but, if gas is $1/gallon and cost 90 cents a gallon they make 10 cents for every gallon sold. If the cost to produce gas jumps from 90 cents to 270 cents gallon they make 30 cents for every gallon sold but their ROI didn't change at all.
So think of it as a machine. You put 90 cents in, you get 1 dollar out.
Due to the higher prices, they are putting more money into the machine but only making 11% profit. If they didn't put the money into the machine, there would be much less gas available and the supply & demand shift would move prices way up.
Admittedly I have no proof that Exxon-Mobil is adhering to an ROI model to set its pricing but if they are then this is basically how it works.
If they lowered their price and cut their profit margin, the lesser companies might not be able to make any profit because their ROI would approach 0 in order to sell at a competitive price. Those companies could face financial hardships which in turn could give the top players even more clout.
Additonally, if Exxon-Mobil decided to charge less for gas, at some point, they would drop their ROI so low that they would be better off investing their money into something other than their own business and this would create a huge drop in supply.
Excellent post, I'm curious if you know the actual profit margin for Coca-Cola. I found a lot of data but I'm having a hard time coming up with a profit margin number that I feel I've calculated accurately.Quote:
Originally posted by Dorain
Here are some interesting profit margins that might help clarify.
Pixar 52.90%
Dreamworks 22.62%
I think anyone who buys a hybrid is doing it for personal beliefs and not for the money. Most of them cost $10,000 more than the same model with a standard engine in it costs. It could take you a long time to make up that kind of money at the pump.Quote:
Originally posted by Aristotle
Even the tax breaks for buying a hybrid vehicle are grossly politicised. Some of you might remember a player here named Pazon. He's a RL friend of ours. He was looking into a hybrid vehicle because of the gas mileage. Then he finds out you only get the tax credit if you make UNDER a certain amount of money. So he didn't buy one on principle (and I agree with that - what the heck!)
What a pile of BS! If the purpose of the tax credit is to encourage people to use fuel efficient vehicles, then the credit should apply to everyone. Furthermore, those cars are more expensive than regular ones, so its less likely that someone who makes less money can even afford one.
I do a lot of highway driving and get 30MPG. In a Hybrid I might get 36. For me to get into the 40's I'd have to buy a tiny little car and I wouldn't feel safe in it nor would I feel safe having my son be in it.
I think when you get a deal like the one Arrgruff got, that's different but that was a mistake.
What makes you think this? Every single person I know who bought or considered buying a hybrid, did it for the savings on gas and tax break. The environmental impact was a nice little perk. The tax benefit is a couple thousand bucks. They get about twice the gas mileage as a regular car, and that translates to about another $1000-2000 a year. So it would only take about 2-3 years to make up a $10,000 difference in cost. Everything after that is profit.Quote:
Originally posted by Sebboe
I think anyone who buys a hybrid is doing it for personal beliefs and not for the money. Most of them cost $10,000 more than the same model with a standard engine in it costs. It could take you a long time to make up that kind of money at the pump.
What is more likely is some people buy it primarily for the environmental reasons, and some for financial reasons.
The point is, only giving the tax break to people who make under a certain annual income is totally retarded and is at cross purposes to encouraging people to use fuel efficient vehicles.
Let me rephrase. Everyone I know who didn't buy one after considering it opted not to because the overall cost benefits were not there so my conclusion was misguided. It was more that if my friends and family had bought a hybrid, it would have been for environmental reasons, not the financial benefits.Quote:
Originally posted by Aristotle
What makes you think this? Every single person I know who bought or considered buying a hybrid, did it for the savings on gas and tax break. The environmental impact was a nice little perk. The tax benefit is a couple thousand bucks. They get about twice the gas mileage as a regular car, and that translates to about another $1000-2000 a year. So it would only take about 2-3 years to make up a $10,000 difference in cost. Everything after that is profit.
What is more likely is some people buy it primarily for the environmental reasons, and some for financial reasons.
The point is, only giving the tax break to people who make under a certain annual income is totally retarded and is at cross purposes to encouraging people to use fuel efficient vehicles.
I do agree that the tax credit should be for everyone or no one.
Any idea what the income cut-off is?