Who’s Greedy for Oil Profits?

Oil companies are the greedy ones. They make too much profit, right?

Well, let’s see. Assume the retail price is gas is $3.50:

$2.66 (or 76%) goes to the oil producers. This price is set in the global market for crude oil, moving up or down like any commodity according to world-wide supply and demand.

The next major cost is the refining of crude to extract gasoline, lubricants, and many other products. The gasoline portion costs 21 cents (6%).

Then comes another 21 cents (6%), for transportation, advertising, and retailer markup.

Out of the $3.50 retail price, we’ve got 42 cents left, or 12%. The recipient?

Government. The federal sales tax on every gallon of gasoline is 18.4 cents. The State taxes vary from 8 cents (Alaska) to 49 cents (New York and California), with an average of 23.6 cents per gallon.

For every gallon of gas sold in 2011, Exxon made 7 cents. Government made 42 cents. That’s six times greater. The biggest oil profiteer of all is government.