Exxon/Mobile profit soars

[Dinner]

And which facts did I ignore? Please do enlighten me...

[Sava]

The only point I made is that gas prices would be higher if we did away with subsidies. Tell me how this is wrong?

[Giancarlo]

Sava, your beliefs are facts? You are right. You are here for comical cause. You are making me laugh...

[Ming]

CHILL FOLKS.

Remember... attack the arguments... NOT THE POSTERS!

[Sava]

Thanks Ming...

Fez: I believe that gas prices would be higher if we did away with subsidies. This is a fact. Prove it wrong. I'll wait for your answer.

[Sten Sture]

Sava - you might want to net the "subsidies" out from the taxes generated from oil sales - the taxes are significantly higher.


Gasoline in the EU should be about 10% higher than in the US because of transportation costs. The US gets most of its petro from closer sources.

Retail gas prices in California are higher than in the rest of the US partially because of additional refining costs to reduce pollution emitting. (smog results out today in the press)

Exxon's profit amounted to about $0.075 on every dollar of sales. Decent, but not that great of a business. $0.06 of the profit was from getting it out of the ground - the most volitile side of the business. Refining and retailing - making oil into gas and selling it at the pump generated about $0.015. Big whoopie!

I would prefer that the US jack it's gas taxes up to the moon, but it is considered a regressive tax - meaning that it would impact the poor more than the rich, so we don't do it.

[Dinner]

Originally posted by Sava
The only point I made is that gas prices would be higher if we did away with subsidies. Tell me how this is wrong?

No, I actually think you are right.

[PLATO]

Originally posted by Sava
The only point I made is that gas prices would be higher if we did away with subsidies. Tell me how this is wrong?

Sava, You are actually correct (Assuming that corporate profits stay at the same level).

Assumtions (feel free to provide evidence to the contrary):

1.)1 tank of gas per vehicle every 2 weeks.
2.)Average fuel tank size of 14 gallons.
3.)140,000,000 vehicles

This would equate to
14 X 26 X 140,000,000 gallons of gas per year or

50,960,000,000 gallons of gas

subsidies = $11.9 billion/year

11,900,000,000/50,960,000,000 = $.2335

Gas prices would be 23.35 cents per gallon higher.

[Giancarlo]

Originally posted by Sava
Thanks Ming...

Fez: I believe that gas prices would be higher if we did away with subsidies. This is a fact. Prove it wrong. I'll wait for your answer.

You are correct. Was I arguing that?

[Sten Sture]

XOM, directly and indirectly, paid more than $12B in taxes this quarter alone.

The subsidy figures are fine at face value, but only if you don't think about it critically. The govy buys fuel for Air Force One, and the safe housing inspector from the city of Roanoke. That is just a cost of operating a government. Not what should be refered to as a subsidy. The govy buys electricity to keep the lights on, but that isn't a subsidy - now is it?

[Sava]

It's so wonderful when we debate facts and don't attack opinions.

[JohnT]

I thought they were one and the same...

It's really a shame that people ignore fact because they don't agree with my beliefs...

[Adam Smith]

Originally posted by Tuomerehu Why? By reducing the amount of needless consume, we ensure that the devices which are important and won't work in any way without fossil fuels can be used in the future.

The fact that oil is a non-renewable resource is already taken account of in the price. Producers know they will eventually run out of oil to sell, and price accordingly. Gasoline taxes cover other costs such as road construction, congestion, pollution, and in many cases act as a general revenue source for the government.

GP:

Congestion is in a sense self-limiting. Eventually people stop driving on crowded roads, or drive on other routes, at other times, or take other forms of transportation. But if I drive on a crowded highway, I increase the travel time of you and everybody else. Unless I compensate other drivers, or the highway has control of entry (toll highways becoming more popular), then congestion is still an externality. Most recent estimates indicate that the cost of congestion in the US is more than $67 billion per year, approaching the approximately $100 billion per year spent on highway maintenance and construction. http://mobility.tamu.edu/ums/study/short_report.stm

Plato:

Good back of the envelope numbers, but actual US highway fuel consumption was 162 bil gallons in 2000, about three times your estimate. The reasons for the difference are that larger vehicles, such as trucks, have lower fuel efficiency, and many vehicles have higher mileage than you assumed. http://www.fhwa.dot.gov/ohim/hs00/mf21.htm

edit:
I have no problem at all with getting rid of favorable tax treatment for oil companies.

[JohnT]

Neither do I.

$.073 a gallon "subsidy" eh? That effectively makes the Fed gas tax just over a quarter a gallon.

[PLATO]

Thanks Adam.

In that case we would be looking at :

11,900,000,000/162,000,000,000 = $.0735

Making the actual cost per gallon of the "subsidies" at 7.35 cents per gallon.

The back of my envelope is now full!