Hard Being Right

My fiance has been inundated with email complaints about the gas price. She decided to take a minute and silence this faceless email mass with one fell swoop.

To answer your question JoAnn, gas companies actually don’t charge so much. The profit margin for the major retailers like Chevron Texaco is only around 9%. That’s the average profit margin for discount stores that most consumers consider cheap, like Walmart, too. Compare that to other companies that usually have a 15%-30% margin for base consumer goods on average.

The reason gas prices go up is not because the gas companies are gouging us, oil is a question of supply and demand. When political issues arise in countries that are major suppliers of the US or the world’s oil happen, like when Venezuela basically said they wouldn’t sell oil to the US anymore because we are NOT a communist country, prices go up.

Keep in mind that as other countries in the world begin to industrialize, their consumption of oil increases increasing the world’s demand for oil. Of note right now is China’s massive consumption of oil as they become a world wide production leader.

But really what you’re looking at being responsible for the rise of $0.20+ in the past two weeks is a result of the weakening dollar. One dollar is only worth about half a Euro right now when it used to be worth 75% of a Euro. Economically speaking, we’re having to increase how much we pay just to compete with the actual worldwide value of gas.

But if you’re looking to get upset about something, like the fact that in many states of the US you have to pay more as a result of fees and taxes that environmentalists lobbied to get tacked onto the consumer price of gas. It’s about $0.20 more per gallon because of these fees and additional costs and the gas companies have no control over it because the government implemented these requirements based on environmental lobbyists.

And if you need another reason to get mad at the high gas prices, keep in mind that the US has it’s own oil reserves on in North Dakota, Alaska and the Gulf of Mexico totaling billions of barrels of high quality crude oil that no company is allowed to touch in order to lower the cost of gas because the Democratic senators, like Ed Markey, don’t want us drilling for oil in the undeveloped areas of the US. WTF.

Wonderfully done babe