Looks Like The Gouging Is About Over

Tunanut

Ten Pointer
I learned a long time ago that trying to explain how the gas business really works to emotional folks is a lost cause. Gas is a cash business and priced in two ways, if the wholesale price is going up, you are charged not based on the cost of what you are buying but based on what the next load will cost so they have the $$$ to pay for that refill. If it is falling then you are charged based on what that load actually cost. They will always rise faster than they fall.

I have often asked but no one has ever answered - what is the Profit Margin on a gallon of gas? What is the profit margin for the evil oil companies? (Not Profit, but profit margin) and finally the $10,000 question.... what should it be???? what do folks think is an acceptable profit margin.. 1%, 2% 10%

I am glad to see the price coming down, but I am far more ticked at the tax per gallon than I am at the speed with which it falls. We will see a penny a gallon increase in the tax on Jan 1.

I own a gas station and can promise everyone that the credit card processors make more off of a gallon of gas than I do. The government @ 60 cents a gallon is making more than anyone. The margin on a gallon for me depends on market conditions. A rising price market can see margins @ 1% or less, sometimes negative. During a falling market is the only time we are able to make any margin, sometime I make up to a nickel a gallon.
 

BarSinister

Old Mossy Horns
I believe the profits from an average station in a stable market to be about 14% gross and about .05 net per gallon.
 

Eric Revo

Old Mossy Horns
Contributor
OPEC can't flood the USA market at all, we would be just fine without the incoming oil that they produce as we and our northern neighbor actually produce all the petroleum products that we can use. The OPEC connection is strictly political and was strengthened by the last few Presidents. Our current POtuS is the reason that our relationship with most foreign leaders has deteriorated, and (I hate to admit it) but this has worked in our advantage in this petroleum situation as well as other imports.
With the China markets trying to maintain and not going nuts like they were just a few years ago, their dependence on other sources of power will begin to take shape, as they need sustainable energy to keep them moving forward.
You can be assured that we will not let our neighbors to the north suffer needlessly, so our petroleum issue is in great shape, no matter what kind of spin that they have on this current situation. A direct pipeline has been delayed for many, many years due to political pressure from our other petroleum producing countries. Can anyone say "jobs" and economic growth for our country and theirs for years to come ? It will be a reality in the near future as will cheaper forms of green energy. The stranglehold of the OPEC nations has come to an end as we knew it had to.
 

Dan Apple

Old Mossy Horns
Exxon profit margin, 5 year avg(corporate wide I assume) is 8.15%.

Apple is 22.9%, IBM is at 14.51%.

http://ycharts.com/companies/XOM/profit_margin

sent from wherever i is

Yes.... point is that the oil companies aren't banking the same profit margin.... most people don't know that, understand that, or care, but it is a fact,,,,

Verizon has a higher margin than that too.... and these days most folks spend almost as much on a cell phone plan per month as they do in gas.... and never fuss and complain about the communication companies getting "rich"...
 

QBD2

Old Mossy Horns
I understand Dan. I always laugh when folks throw out the profits for a major corp, without giving a lick of thought to margins.

'But but but they made 50 billion! They're screwing us!'

Well when you're selling over half a trillion dollars worth...

sent from wherever i is
 

Firedog

Old Mossy Horns
Contributor
That was the point I was trying to make Dan. Everybody screams about record profits at oil companies, but they do not understand the difference in profit and profit margin or seem to realize those record profit numbers are associated with record sales... duh.
 

Wanchese

Twelve Pointer
The gas price here is still $2.87, it had been higher until this week. I paid $2.67, 75 miles away over a month ago.
 

GrizzlyBear

Old Mossy Horns
I understand Dan. I always laugh when folks throw out the profits for a major corp, without giving a lick of thought to margins.

'But but but they made 50 billion! They're screwing us!'

Well when you're selling over half a trillion dollars worth...

sent from wherever i is

Don't forget, those oil companies are publicly owned. So the owners get the gargantuan profits.
 

mekanizm

Old Mossy Horns
Contributor
The conspiracy theory in me says that the US and the Saudis have colluded to drop the price of oil for National Security reasons. ISIS is financed by oil profits and Putin is supported by oil profits. IDK.
 

Wildlifepro51

Guest
Had the Vice President of BP on Fox News last week and he made that comment stating that OPEC was no longer a factor in the world oil market due to the US being too far ahead already on fracking and exploration. OPEC's reasons for not cutting production as they have for 30 years is an attempt to make us oil production less than cost productive. Essentially, they are hoping the US will abandon oil exploration in preference to buying cheaper OPEC oil.

Songdog You made some good points, I follow futures markets and based in current pricing per barrel if it were to decline rapidly as it should be ??? we would be at $2.04 per gallon here in the middle of the state . But we all know decline is slower in government than rise is. Good info SD Thank you
 
Last edited:

GrizzlyBear

Old Mossy Horns
The conspiracy theory in me says that the US and the Saudis have colluded to drop the price of oil for National Security reasons. ISIS is financed by oil profits and Putin is supported by oil profits. IDK.

That wouldn't be a conspiracy it would be a well thought out plan. Maybe bush is pulling obamas strings. Lol
 

chef

Ten Pointer
The conspiracy theory in me says that the US and the Saudis have colluded to drop the price of oil for National Security reasons. ISIS is financed by oil profits and Putin is supported by oil profits. IDK.

keep in mind it costs somewhere around $30 per barrel for us to get it out of the ground and about $1 for them to do it. opec knows what it is doing.
 

chef

Ten Pointer
;) something else most people don't want to hear, forget, etc.....

lots of folks retirement plans "banking" on that money....

my favorite are the "99%'s" who protest against the insurance companies and oil companies but then complain that their pensions aren't high enough.

newsflash: your pension is not a giant collection pot filled with money
 

Buckshot1

Twelve Pointer
paid 2.15 a gallon in Tega Cay, SC yesterday.........not sure how long it'll last but just gonna enjoy it while its here. And, OPEC is actually trying to cripple the US's production by forcing prices so low it will be unprofitable to practice Fracking. OPEC is only trying to ultimately to increase our need for their oil, by reducing our output.
 

pcbuckhunter

Old Mossy Horns
Contributor
When I was little I remember my parents and everyone else complains that gas was $2 a gallon. The day I got my license it was $4.07 a gallon. I'm paid $2.47 yesterday and was tickled

Dang you are young!!!! LOL!!!

My first tank of gas cost me $0.79 a gallon. the fill up was $6.50, i paid for that, a can of Copenhagen, and a 20 oz Mtn Dew, and still got a little change.
 

dpc

Old Mossy Horns
Contributor
Yep $20 would get you through the weekend. might have even been able to venture to the back seat of the old mans car.
 

nckeith

Ten Pointer
I paid 2.07 toward gafney SC yesterday. I have mixed feelings. In one regard its fine for now. The other part of me wonders if the boom towns of SD, Texas and WV will be hurt, and then spillover to the national economy in the pain of layoffs etc. The saudis know what they are doing and what they want is to drive a competitor out of business.
 

NCST8GUY

Frozen H20 Guy
Yeah I think the Saudi's are have a heavier hand in this than we do.

I also think it's a tad late. Many cars and the mentality of many purchasers now is focused on higher mpg's. The only people that hurts is the politicians whom tax by the gallon.
 

Buckshot00

Guest
I can only see good things with lower gas prices. Wish it was summer time so I could fill up the boat and the car.
 
Top