Little Mr Mahatma

In which the middle-aged Peacenik mouths off about War Drones--and all the other things that make him cranky.

Mr Mahatma--who is a Mr in real life--lives in the valleys of Southern California with his wife, a herd of Dears, and an impressive collection of books. Pnorny!
He is reachable at:
littlemrmahatma@yahoo.com

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Little Mr Mahatma

Wednesday, May 03, 2006

Gas Pains
Yesterday I took out a third mortgage and filled up the car. Prices are getting stiff and will get worse. Though the Oil Execs are making out like bandits, they're not ripping us off. At least, that's what their ads are saying so it must be true.

Seriously. The Oil companies will be spending millions on advertising to show that they're not doing anythinig illegal. You see there are reasons that prices are so high. A couple of years ago the excuse was that too many refineries were undergoing repairs then along came hurricane Katrina. Now it's the simply the price of a barrel of oil due to foreign problems.

One would think that with the massive profits they've posted they would have fixed the refineries by now.

In any case, in the LA Times there was a full page ad with a chart showing where our gas dollar goes. Ready?

55% goes to crude oil

26% goes to refining, distribution, and service stations

19% goes to taxes

That's it - 100%. Notice anything wrong, anything missing? How about the profit? Sure enough, there's a little blurb at the bottom of the chart that says "In 2005 the industry earned 8.5 cents on every dollar of sales". OK, but where in the above chart does that 8.5 cents (or 8.5%) go? Under crude? Under refining? Under taxes?

So the chart isn't the most clear (or honest) about things is it? Better would have been showing by the cost of one gallon gas how the cost breaks down but good luck finding that out.

I did find some interesting numbers on the Department of Transportation site. This is comparing for January 2001 to January 2005 the number of gallons reported. Ready?

2001 January: 10,290,650,552

2005 January: 10,896,231,960

Neat huh? Our Consumption in 4 years went up 605,581,408 gallons or 6%. This tells us a few things. One that our consumption hasn't skyrocketed. That is, our demand hasn't changed all that much, less than 1.5% / year. Also, the refineries have seemingly kept up. If there were refinery problems you'd expect the gallons to decrease.

Now let's see some cost per gallon 2001 compared to 2005. Unfortunately it doesn't give a nationwide average so I'll be looking just at California. Ready?

2001 January: $1.433

2005 January: $1.798

That's a $0.365 hike or 25% increase. And now the price is over $3.00. It's not the taxes. In California the tax rate from 2001 through 2005 held at 18%. It's not the amount of fuel being refined. It's holding about the same as we saw above.

It's not the price of a barrel of gas as they would have you think. In fact, if you remember this is the second time prices went over $3.00 / gallon. The last time was before last summer and we were assured it was a hiccup, that more gas was coming but the price per barrel was at about $55 or $60. A 10% or even 20% in the cost of a barrel of gas should not result in a 33% increase fo us, especially when the increases happen the same day the cost per barrel goes up.

The truth is simple. If the Oil Companies are reporting these obscene profits and their Executives are getting these obscene bonuses and amounts then something is going on ESPECIALLY WHEN WE"RE NOT USING THAT MUCH MORE GAS. It's gouging and collusion. It's manipulation.

And with Bush as President it will continue and get worse. Now he wants to "fix" the crisis by loosening even more environmental regulations, and drill for more oil in Alaska. None of these proposals will do a damn thing except make more money for his buddies. But, thank George, we invaded Iraq. Maybe we can use that oil, after all it's ours now and who's going to take it away from us, right?

It's just a shame that to secure the Iraqi Oil we had to sacrifice America.

3:12 PM

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