[/quote] I'll talk economics all day long. There's no anti-trust exemption on oil companies. Most are international entities and by and large aren't subject to the jurisdiction of some liberal wacko court in San Francisco. But they can be litigated against just like any company can. If there are anti-trust issues, why everytime Congress calls these oil execs up there, none of that is ever mentioned? Have you ever watched that crap Red? They ask each exec how much money they made.......they try to embarass them and start some class warfare crap.....rich vs. poor. Nothing about breaking the law, collusion......nothing. Because every senator in there knows full well why gas is this expensive.......they aren't stupid like these sheeple who believe this collusion crap. These senators know how the market works......but if they throw out the word gouging enough, people start to say it.
What you leaving out here Red is: The companies refining the oil, do not own all of the oil in the world. You can't leave OPEC out, see. They have the most oil on the market, see. So when supplies are low, which OPEC can effect, then the price goes up see. Then the refinery, let's say Exxon, has to purchase oil on the market like everyone else......because while you may think so, Exxon doesn't own all of the oil in the world. In fact, they actually own on hand very little. Oil companies have to purchase oil too at the increased price which is then passed on. The price of gas is the future price of purchasing the oil, refining the oil to gas, driving to gas stations, filling tanks.
I've already said it ! Geez, pay attention. It ain't what I want to do, it's what members of your Congress want to do. Republican members at that. 1. Congress is considering elimnating the anti-trust exemption from oil companies that allow them to collude instead of compete with each other in a free market. 2. Congress is considering a windfall profits tax to give oil companies some incentive to keep prices down on the factors they can control. I've explained this to you before, but I'll try to make it easy for you. I will use absurd models to make it easy. Say a gallon of gas costs $50 cents due to the price of oil. Say normal production costs add 50 cents. Say the oil company makes a 50% profit on this $1 gallon of gas (50 more cents). Tax is 25 cents a gallon. So that gallon of gas costs us $1.75. The oil company makes 50 cents a gallon over their costs of raw materials and production. Now, say that the price of crude tripled. A gallon of gas would now cost $1.50 due to the price of oil. Their production costs remain at 50 cents. The oil company makes a 50% profit on this $2.00 gallon of gas ($1). Tax is still 25 cents. The cost to us would be $3.25 a gallon. The oil company now makes $1 a gallon over the cost of the raw product and production. Do you see? The oil company has PASSED ALONG the increased cost of crude to the consumer. Their production costs remain the same, taxes remain the same, but they double their profit and who has paid for it? The consumer. He pays NOT ONLY for the increased price of oil BUT ALSO the twofold profit for the oil companies. This is where the rip-off come in. They take advantage of increased price of crude to double their profits. Better that they tie their profits to their production costs (50 cents a gallon) than to the fluctuating price of oil. In this fashion, a gallon of gas would now cost $1.50 due to the price of oil. Their production costs remain at 50 cents. And their profit remains at 50 cents as do taxes at 25 cents. Then the price to consumers would be only $2.75. The consumer still pays for the increased price of crude. The oil companies still make their usual profit but the consumer gets to keep that extra $50 cents a gallon to keep the economy moving.
OK, no getting through to you. You haven't exhibited one iota of proof of collusion or gouging....nothing. 2 things and I'm done with you commies: 1. You keep bringing up windfall tax on oil companies. Please explain how a windfall tax will lower the price of gas. 2. Next, the only way to lower the price of gas today is for government to drop the $.50 a gallon in taxes. Government, if they care so much much about us poor people, could save us a ton of money by dropping $.50 a gallon right now.........why doesn't your government do that Red? They could today. I haven't seen you call for this though. Just investigating companies windfall profits. Would you favor dropping the taxes today?
They would do that if that was the real world. But there is no fairy god-mother who delivers Exxon oil for free you see. Like I said before and you still don't get it......Exxon doesn't own all of the oil in the world. You can't remove the fluctuations of the oil market from the price......this isn't the North Pole Red. Oil companies, in order to make gas you see, has to purchase oil at the market price. If oil fell from the sky and Exxon had an unlimited supply, we could do that. But see, the EPA wackos over the last 30 years made it so hard now to drill for oil in the lower 48 that oil companies have to go offshore, OR PURCHASE OIL on the OPEN MARKET!!!!!!!!!!!!!!!!! AND THAT MEANS PAYING THE MARKET PRICE!!!!!!!!!!
Welcome to capitalism!:thumb: What should the price of gas be based on $75 oil? I keep hearing how it is too much, but no one says what it should be. If we don't like private companies making so much profit on energy, then why not have the government take over all our energy needs? There would be no built in profits to inflate the cost, so we would have cheaper energy right? People want private companies to assume all the risks and costs of providing energy, then complain it's too high.
The windfall tax would take away the oil companies incentive to artificially inflate their profit margin. As red demonstrated in his exmple they pass on the increased cost of crude to us anyway, but they also pass on their artificially protected profit margin.
