Solution to gas prices: Nationalization

Good point! In my area the price is very close to what it should be, given roughly 20% inflation since it was $0.28 CDN per Imperial gallon in the

1950s. However, wages have not kept pace in many jobs. The BC minimum wage then was $0.75 CDN per hour. That would equate to $15.00 per hour now, but in fact it's only $8.00 CDN. A person now has to work longer to get that gallon of gas.

Steve R.

Bingo!

In message news: snipped-for-privacy@4ax.com, Scott in Florida sprach forth the following:

From the annual report:

Expenses: $2.4 million Fares: $0.5 million

Operating deficit (expenses minus fares): $1.9 million

Average number of unique riders per day: 541

This is insane.

Depends on ones perspective I supose. When I was in college in the late forties, one of my jobs was pumping gas. The minimum wage in the US was 25c and gas I was pumping was 23.9c. Now teh US minimum wage is between $5.50 and $7.20, and gas is $2.90 to $4, depending on the state.

According to the latest information on the US Commerce Department site, oil companies earn an average of 17c a gallon, station owners an average of 6c to 8c a gallon. The federal tax is 18.4c and the average state tax is 38c a gallon. One state is 44c and some add their sales tax on top of the fuel tax. I wonder who is making the most 'profit' on a gallon of gas? ;)

mike

Bill Putney wrote in news:f3l8kt$duc$ snipped-for-privacy@aioe.org:

In true theory, if everything were adjusted for inflation, the price of everything should remain relative, except oil company profits of course. It is laughable that the only time you hear this crap is when people are trying to justify something that everyone knows both in their heart and mind is wrong. Not only are Oil companies using their total Monopoly to gouge consumers, but they share much of the blame for the policies in the Middle East. I am not speaking necessarily of the Iraq war, Democrat or Republican, but in policies carried out over the last several decades in which the interest of the Oil companies took preference and added to the current situation. I suppose you want farmers to suddenly raise their prices on food about 5 fold based on their costs compared to decades ago, and the same to all other goods as this inflation index is fair and such a great standard eh Bill?? I'm sure you think raising the minimum wage is inflationary as most people who make your idiotic argument usually state. Only salaries of management and CEO's has no inflationary effect. I'm sure these huge Oil company profits are the results of huge savings though out by Oil company executives who work hundreds of hours each weak for meager wages just to keep Oil prices in line with all other necessities based on the inflation index. LOL

Good points. Here in somewhat socialist Canada (definitely NOT communist), the government did nationalize one oil company quite a few years ago and the integrated oil company PetroCanada was born. It's a completely publicly traded company now, like Exxon, etc... I can't say that it had any effect on gas prices, then or now. What does have a large effect on price is taxes (of which we have lots more up here) and the silly price of crude oil as determined by those neurotic oil commodity traders who are driven by fears of shadows and other matters of doom and gloom everywhere.

That said, oil is a valuable chemical and it's selling well below it's "true" value, I think. If you want to bring down prices, then you have to demand less, and that means smaller cars, smaller engines, better fuel efficiency, more public transit, more bike riding, walking, etc. In other words, a change in the way we do things. Cheap gas and oil isn't a right.

Dave

Interesting subject for debate. What is the true value of oil? Who should benefit from any money when it is sold? Oil had been in the ground for billions of years as a natural resource. Who should divvy it up and take the money traded for it?

You can argue that the actual cost of a gallon of crude is essentially $0. Refiners should be able to recoup costs and make a profit on the processing of it, but what after that?

The survivors of those killed in Iraq should get a lifetime supply of free gas. ;)

??? You can say that about anything that is mined or grown (the only difference between mined or grown is that most of the time, for something that is grown, human effort has to be put into it before you can even access or process it). Somewhere, there has to be human effort put into it to turn it into an accesible and/or useable product. I guess I'm not sure what your point is there beyond the obvious.

Any commodity has actual costs above the $0 cost of actually having it sit in or on the ground. Above the actual costs (labor, materials, marketing, etc.), hopefully there's pure profit for someone willing to invest and take the risk - otherwise (short of slave labor or dictatorship, which sometimes are the same thing) it's just going to sit there.

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

Bread is a necessity. Toilet paper is a necessity. Housing is a necessity. You're going to tell me that inflation does not apply to those necessities? People would be really dumb to believe that kind of stuff, and perhaps they are that dumb. But you're pushing something you know not to be true.

Umm - but inflation is the conglomerate results of individual price increases. On average, you're paying more for a given commodity today based on inflation - not your buying power. Geeze! That's how inflation is defined. Yet people want to single oil out and say that it's price should be based on our decreasing buying power and not on inflation. That double standard with oil vs. the average of everything that goes into inflation figures is exactly the dishonesty I was talking about.

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

Those whose soil the pumps are located. OPEC was created so as to ensure that the low cost producers could control/manipulate prices to their collective benefit. I've often wondered what the result would be if the US decided that the Yanky dollar was no longer going to be an International currency (ie. could only be spent in the US) by issuing new script.

Well almost. The Middle East lifting cost was about $0.25 /barrel in the early '70's and on the assumption that we are still drawing from the same fields the cost shouldn't have changed much. However, new fields have have their own unique costs and are sustantially higher. Like all things, as prices rise, in this case crude oil, new sources become economically viable. In this sense we will probably never really exhaust our supply of carbon based fuels.

Richard

Right, but before that time, the oil is sitting there for a billion years. The cost of the oil itself is $0 as long as it sits there. The cost of raw material is the same in 2007 when we pay $3.30 a gallon for the finish product as it was in 1962 when we paid 19¢ for hte same gallon. Nothing has changed in the pool of oil. Sure, some is easier (cheaper) to get to the refinery than others, but above that cost, what?

The change, over the years, of the selling price is the cost of obtaining, converting, and delivering the final product. Add some profit and what should gas really sell for? The $3 we pay, the $6 in much of Europe, or the

25¢ Chavez is charging? Will we conserve at $8 and squander it at $2?

My point is, what should gas really sell for and who should be getting the money above processing cost. You hear some twit say gas should be $10 a gallon, other want it for next to nothing.

So, answer the question. What should gas be selling for? You must have an opinion.

IMHO, I agree with what you said earlier. The cost of the entire process (from ground to pump), plus a little extra for profit is enough.

But are people paying more for a given commodity in terms of percentage of income? To me the middle class is like a school of anchovies being herded by whales. More and more people shop at WalMart because they

*have* to. The single breadwinner is a thing of the past. There's another ticking time bomb in the free market fundie's policies of the last few decades and that is credit. Few have savings and most are in debt up to their eyeballs.

The people that control oil wield great power globally and are not generally trusted. Record profits for Big Oil at a time when consumers are paying sky-high prices for gas is bound to raise suspicions. Have you read Daniel Yergin's "The Prize" or seen the 8 hour documentary based on the book?

The reviews are interesting:

Interesting documentary on credit:

We're really having a disconnect here.

What about, say bread. The raw materials are in the ground sitting there. They're free. Add some seed, then a miracle occurs and you get wheat. Then another miracle occurs and you have bread. So - $0.10 a loaf ought to be about right.

What about a professional service - say a bridge design. The consulting engineer's out of pocket is maybe $100 for paper and ink. So how does he get to charge tens of thousands of dollars for something that, by your philosophy, only cost him $100?

What do you do for a living? Let's put your value added work to the same test as you want to put to the oil companies.

Like I've said, I'm not a fan of the oil companies, but let's be fair.

The engineer pays $100 for paper and ink that used to cost $25. Why isn't he only charging a couple hundred dollars for his services? Plug in any endeavor you want to - including whatever it is you do for a living. Your argument is ludicrous.

By the same general rules as any other for-profit endeavor. Again - let's put your job to the same analysis. I don't think we want to start telling each other what we have the right to charge. The market decides that.

I have no idea - I don't know enough about the business. I would not even venture a guess. I do know that if a competing viable form of energy were to be found, the price - by free market rules - will come down.

Fact is, they are making around 10% profit. Back to my original question - what's wrong with that?

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

Anyone is free to build a business to compete with WalMart.

That's by collective choice. Once both hubby and wife started routinely working, the whole financial game changed to where it is now pretty much a necessity. This falls into the category of "be careful what you ask for". We asked for it, and we got it - warts and all.

All done by freedom of will and the direction that society thought it wanted to go in, so who's fault is that? Again - we asked for it, we got it.

No. But I will look into it.

10% profit for a business is bad because...

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

Apparently the percentages aren't a problem, (although I imagine debatable) its the anti-consumer tactics that have come under fire:

My philosphy? I did not state what anything should sell for, but opened a discourse for everyone to contribute. You seem to think I'm saying it shoudl be cheap. I'm not against profit at all. I own stock in oil companies so I do want them to make a healthy profit.

Yes, let's be fair. They should make a profit. There are people that have stated that gas should be selling for $10 or more a gallon. What I'm asking is it they want to make a case for that, whee should that money go? The oil companies? The land holders? The goverment? There are others that think gas should sell for pennies. Maybe it should. The cost of raw material has not changed for a billlion years, only the cost of retrieving and processing it. Unlike you loaf of break, oils is just sitting in the ground whereas a farmer must plant and grow wheat at some expense.

What argument? I'm not arguing anything, I'm asking a question that you don't have the asnwer for. I'm not stating what I think gas should sell for at all. What I do for a living is ofer my services and knowledge. I get what I can for it. Gas is a product and the raw material itself, the crude oil, is there for the taking.

Hey, now you are catching on to the discussion here. I'm not suggesting anything. I'm soliciting opinions. Some have been brought forward over the past six months or so.. Some thing gas should be selloing for less, others for more. I'm just wondinering how they arrived at their conclusions. Especially from the poster here that said gas is not selling for its "true value". I'm asking what that "true value" is and how it was arrived at. Somehow you seem to have missed that part early on.

Nothing. As I said. I'm a shareholder. 15% would be better. Why do you think I'm against charging what it cost and a good profit? Rather than discuss a statement made by a poster here, you've become confrontational, or at least defensive when I never took a position either way. It still goes back to the OP and his "true value" of oil.

2006 Oil Profits 119 billion 2006 Election Cycle: Federal Campaigns: 18.9 million Federal Lobbying: 123.8 million State of California Campaigns: 91.6 million

March 06: Last month, the Bush administration confirmed that it expected the government to waive about $7 billion in royalties over the next five years, even though the industry incentive was expressly conceived of for times when energy prices were low.

"The big lie about this whole program is that it doesn't cost anything,'' said Representative Edward J. Markey, a Massachusetts Democrat who tried to block its expansion last July. ''Taxpayers are being asked to provide huge subsidies to oil companies to produce oil, it's like subsidizing a fish to swim.''

But on Aug. 8, Mr. Bush signed a sweeping energy bill that contained $2.6 billion in new tax breaks for oil and gas drillers and a modest expansion of the 10-year-old ''royalty relief'' program. [end quotes]

It will be interesting to see how and by whom *this* current bill is killed: