posted 09-25-2005 10:45 AM         

"With the recent upsurge in gas prices, who has increased their prices?
- Domestic & foreign companies that pump the crude from the ground and the tankers, pipelines or rail transport of crude to refiners - up 46%
- Refineries - up 255%
- Distributors and Retailers - up 5%
- Consumers - up 64% (on average our cost for gas has risen my this amount)

When the average price of a gallon of regular gas peaked at $3.07 recently, it was partly because the nation's refineries were getting an estimated 99 cents on each gallon sold. That was more than three times the amount they earned a year ago when regular unleaded was selling for $1.87.
The companies that pump oil from he ground wept in an additional 47 cents on each gallon, a 46% increase over the same period a year ago.
If motorists are the big losers in the spectacular run-up in gas prices, the companies that produce the oil and turn it into gasoline are the clear winners. By contracts, the truckers who transport gasoline, the companies that operate pipelines and the gas station owners have profited far less.
The spike caused by Hurricane Katrina (which heavily damaged oil production and refining in the gulf region) accentuated gains the refiners and producers already were enjoying over the past year. Exxon-Mobil Corp., the Irving, Texas behemoth that produces and refines oil, reported in July 2005 that its second quarter profit was up 32 percent over last year, to $7.64 billion. Analysis expect Exxon's profit to soar again this quarter.
For a company like Exxon, producing a barrel of oil from an existing well costs about $20, according to analysts. When the selling price rises above that, the increase is almost all profit, they said. After Katrina bore down on the Gulf Coast, the price of oil set a new high, approaching $70.
Refiners processing the oil into gasoline faced lucrative market conditions. They may have had to pay the producers more for the oil, but they were able to sell their gasoline for higher prices as a result of the short supply and the spike on the mercantile exchange. In their view, the increases were justified because the market dictated that their final product (gasoline) had risen in value.
Refiners, particularly those with most of their facilities outside the past of Katrina, cashing in. Analysts predicted a windfall for companies such as Philadelphia-based Sunoco Inc., which continued operating normally during the hurricane.
After gasoline leaves the refineries, the profit market becomes narrower, even when prices are high. Many motorists direct their anger at gas station owners, but the bulk of the increase at the pump typically is not making station owners rich, analysts say."

Boy, I'm sure glad this Congress and President gave the big oil companies a massive tax break in July 2005 so they could make through these difficult times....

posted 09-26-2005 08:59 AM         

The truth:
In the distribution chain -
Distributors, retailers and consumers are getting hosed. Consumers worse than any segment. Retailers have a slightly higher margins than normal, but increased driveoffs &/or thefts are taking this away. I have one dealer who has to have security 24/7 to prevent driveoffs. By law in his county he can not impose pre-pay.

Traders, crude extractors and refiners are TONNING it!
I am on a distributor council for a major oil company and at a meeting last week they told of how capital intense the business is (smoke screen BS), but that they are having high profits and would love to invest in more refining capacity, but can't get clearance on over 30 proposed expansion projects.

posted 09-26-2005 09:15 AM         

I have heard of one proposal for the government to offer tax credits to property owners curently using home heating oil to swicth over to some alternative heating method. This would free up more refining capacity for gasoline/diesel.

I agree with Randy that more conservation is needed as well. I'm surprised we are so far behind europe in acceptance of the newer diesel engines for everyday driving.

posted 09-26-2005 09:58 AM         

I certainly can see an advantage in keeping refining capacity for gasoline/diesel fuel.

posted 09-26-2005 10:04 AM         

He will always tell you the way it REALLY is...unlike the biased and ALWAYS depressing media.

posted 09-26-2005 10:29 AM         

I'm also pro-business; of all sizes. They are the engine that has powered the US for well over 100 years. It just seems to me that when we the public and industry are getting screwed, we should be able to rely on the federal government to look out for our interests, rather than making the problem worse...

posted 09-27-2005 10:16 AM         

I will give you the honest scoop. I have no reason to do other than that, plus I'm too dumb to lie!

I forgot another biz segmant that is loving the high gas prices. The credit card issuers/processors and banks.

With these price increases the percentage of credit card usage for gas transactions has risen from approx. 70% to appox. 80%. The credit card fees are on average at 2.5% of dollar sales. Their take on sales have increased proportionatly along with gas price increases without extending any effort (overhead).