I think the government enjoys portraying "Big Oil" as the bad guy - it help keep some of the heat off of them.

Truth be told, even Exxon-Mobil's $40 billion annual profits aren't that unreasonable, percentage-wise. There are a LOT of other big companies in other industries (like banking, pharmaceuticals, and technology) that have higher profit margins. They're just not as big as Exxon-Mobil, so the actual dollar amount of their profit is smaller and as a result, people aren't (as) outraged. But when you start talking about "$1300 in profit per second", people that don't understand the sheer amount of money that Exxon-Mobil has to spend each year automatically start thinking "price gouging" and "collusion", and it's easier for the government to target the oil companies.

 

God you guys have it good!

At the moment, the cost for our premium super unleaded is circa £1.15 a litre, which is roughly $10.50 for a gallon.

 

I saw a show on either Discovery or History channel about the drilling rig Shell built to drill in the gulf that's over 1000' feet tall. I don't remember all the numbers, but it cost a bloody fortune (threw in "bloody" since we drive Mini's ). They spent all the money and don't know until they are drilling if it's really going to pay off. They make a lot, and spend a lot.

 

$4.40 at some places on Maui

 

Cousins in Greece paying 1.82 Euro per liter

 

Does it make anyone feel better that they pay $950/second ($29.864B) in income taxes? (though only $5.1B is US income tax, and another $9.2B in other US taxes - note that of total sales of $390B, only $121B (31%) is made in the US) They spent $200B ($6,300/sec) on crude oil.

See details in their EDGAR filing. (financials start on page 50)

 

Hey, whoever's in charge of collecting taxes:

"You're doing it wrong!"

see below

 

29.864/390 = 0.076574...
5.1/121 = 0.042148...
So their tax bracket is 7.65% total worldwide and 4.21% in the US alone ???
Boo Hoo, ... I wish I was in that tax bracket !!!

 

$3.51 for premium today.

While I don't like the rate that gas is going up, I just have to remind myself that most of the world has been paying this much for gas for decades. We used to fill up 2.5 gallon tanks with gas from the Air Force base to take with us driving around Europe in the mid 80's.

While we were paying $1.10 a gallon, or whatever it was at that time, a gallon of gas on the German economy, using the current exchange rate, would have cost about $6. And the exchange rate wasn't all that bad at the time.

 

That is because the government taxes it to deah. The cost of the GAS is relatively similar.

My father tried to use that argument on me during the 80's and 90's, and it still is like comparing apples to oranges.

 

Nope - $121B was sales, not EBIT - I didn't look up what their US profits were. You can't look at tax/sales, as income taxes are based on profits, not sales. You don't pay taxes on your gross income, you pay on your taxable income. Cost of doing business (including the cost of extracting/obtaining oil) differs drastically depending on locale. It's quite possible that other countries impose higher taxes though. They paid 42.4% on their $70.5B in profit.
In addition to the $200B for crude oil, they paid another $72B in 'sales and other taxes/duties', ~$60B in production/sales/etc. Costs of $334B on $404B of total revenue - hence the $70B profit.

 

Regardless of who is bilking the others around the world, I'm just glad we're not getting similarly bilked. That was my point. I wasn't trying to say we should be thinking US gas companies.

 

I think comparing business taxes to personal taxes is sort of "apples and oranges". If you compare E-M's tax burden to their gross revenue, it's going to seem pretty low. But the same can be said of personal taxes, if you use gross income before any deductions or adjustments.

Taking my total tax bill and dividing it by my gross unadjusted income, the ratio is 7.8%, or in the same ballpark as E-M's.

 

Taking my total tax bill and dividing it by my gross unadjusted income, my ratio is 20.08%
(Fed + State + Local income tax --not counting FICA, sales tax, occupational tax, gasoline taxes,
additional taxes on insurance, lodging, etc.)

 

Ah - in an effort to compare fairly to the E-M numbers posted above, I was just using my federal tax bill, not federal + state (no local income tax for me).

If I include my state income tax bill, the tax-to-gross income ratio goes up to 10.2%. I'm pretty sure the E-M numbers in post #130 didn't include state taxes, though.

 

Ok, 15.52% for Federal income tax alone for me.

To be fair, if we look at page 50, they did pay 42.38% of their taxable income on income taxes,
but they get a lot of breaks that I don't in adjusting their taxable income.

On our return we paid 33.54% of our taxable income on income taxes (Fed State Local Medicare SS)

and on page 78 it shows state taxes were also included.

 

Finally, Someone esle who understands. If only the other 99% of the US could see this clearly. Maybe Congress will finally wake up to.

 

What do you Big Oil supporters say when you come across an intersection with three competing gas stations and everyone of them has the exact same prices for all octane's of gas ? And this isn't an isolated case. In fact, I'd say it's most often the case.

No collusion going on here ?

Of course, you can guess how I see it... "hey, let's all jack up the price the same so we ALL make a killing".

 

You're complaining about being in the 15% bracket? I remember those days...and probably will again when I become a Wally World greeter.

Or am I missing something here?

 

As I may be a perceived 'big oil supporter', I'd say that all the prices being the same would indicate competition. Otherwise, why wouldn't they all be a dime higher than <insert current price at the pump here>? Why? Because then you'd drive down the street.
That's not to say that there hasn't been collusion, but similar pricing just means that they can see the same signs you do, and if they price a penny lower (actually, I see this all the time) their competitor will do the same thing if they think that will get them marginal sales.
If there was collusion, why did gas prices ever come down from their (until recently) 1982 historical highs?

We actually had a local case where a man who owned a Shell franchise died during a hunger strike WRT high gas prices. He didn't claim collusion though.

The oil companies are no saints, but at 11% profit margins, they aren't making egregious returns, either.

 

The problem is with the government not let more oil to be drilled around the United States and more refineries.

 

Gasoline and oil are fungible, where the product is easily exchanged for another. Most gasoline stations of competing brands are getting the gasoline from the same transfer station or refinery anyway, and thus paying the same price. There is no incentive to compete on price.

Gas stations only make about 1% profit on the gasoline itself, so there is no reason to compete. Unless they can get you in the door and sell you cheese doodles and sodas, there is your profit motive.

Most people don't understand what $10 bbl oil did to the oil and gas industry. It caused the closure and consolidation of refineries and oil companies with years of slim profits. This causing massive underinvestment in infrastructure and is part of the reason we are at the prices we are at now.

Gasoline is $.21 a cup (at $3.50 gal). What other product can you buy for that price (besides municipal water)? Possibly milk depending on where you live...

 

I would greatly disagree.

The USA is the most drilled country in the world. 50% of all O&G wells are in our territory. This country is a veritable pin cushion of wells.

Now certainly there are some small known finds (small being less than 100 million barrels) in areas that are not allowed for environmental or similar good reasons. Frankly, these fields are not big enough to sway prices a world market level anyway.

US oil production has been in terminal decline since 1970. (see chart)

I don't work for the oil industry, but am a civil engineer who has worked in the oil fields. I had well and pipeline projects stalled for 10 years since the infrastructure costs did not justify production, until oil crested $30 bbl. Then we could not hire people fast enough to get the work done.

The markets are in check, except demand is winning and supply is loosing.

 

Be glad you are not filling up a 30 gallon SUV tank.... = >$100

 

Yeah, my next-door neighbor just brought home his new Hummer. The big one.

Idiot. Environmental butcher. Too bad a gas station can't selectively change the pump price to $10 a gallon, just for him...

Are they still giving tax credits/benefits/deductions for the Hummer, when it's used for business?