More Distractions

Obongo is tossing up something shiny to distract the public from the skyrocketing price of gasoline. The truth of the matter is this; the federal and state governments make more, much more on every gallon of gas than the producers.

The federal tax on gasoline is 18.4 cents per gallon. Then tack on the state taxes ranging from 8 cents a gallon in Alaska to 47.7 cents in California (which includes state sales tax), then add the federal tax of 18.4 cpg for a total of 67.1 cents per gallon for you Californians. It's even worse for diesel, 76 cpg. The US average for state excise/sales taxes on gasoline is 29.7 cents per gallon.

As I live in NY, the state grabs 47.2 cents for every gallon I pump. With federal tax it comes to 65.6 cpg. Then my county tosses another 4% sales tax on the mix. Yesterday I spent $3.859 per gallon to fill my SUV. It took 12 gallons of gas so I gave $2.21 to the feds and $5.66 to NYS for the privilege of gassing up my Ford.

So how much did the evil Sunoco, Exxon, BP corporations make on that gallon of gas? Between 8 and 10 cents per gallon (excepting refinery fees if any). They made, tops, $1.20 from yesterday's purchase. The gas station makes between 7 and 10 cents a gallon also - but their costs have to come out of that.

Gas stations do not make money selling gasoline; they make it in convenience store sales or auto repair. As a grad student back in the early seventies I worked at several gas stations. Pumping gas just about paid the bills (gas was 33.9 cents/gallon back then) but the auto repairs/oil changes/etc. put steak on the table. For more information on what goes into the price of gasoline, go here.

Not only that, there hasn't been a new oil refinery built in the US since 1976. Thirty-five years! The last one built was in Garyville, Louisiana. In 1975 there were 137,912,779 vehicles on the road in America. By 2008 this number had grown to 255,917,664, an increase of 85%, yet no additional refineries have been built. In fact, there are only 149 oil refineries in the US today, down from over 300.

Self-serving statements from the National Petroleum Refineries Association say that American oil refinery capacity has increased. "With the amount of new capacity U.S. refiners have added at existing facilities since 1994, it's as though the industry has been building a new, world class refinery each year," said Charles Drevna, executive vice president of the association. He says refining capacity has increased by 177,000 barrels per day.

If that is true, shouldn't the price of gasoline and heating oil be lower? The U.S. Department of Energy tracks oil refinery output. While the amount of gasoline supplied by American refineries is about 285 million barrels per month, the amount of refinery capacity devoted to gasoline production has fallen by 10 percent from 1983. The amount of fuel oil produced by American oil refineries has fallen by five percent since the record high production of about 135 million barrels per month in 2001.

So the dipstick in the White House wants to appoint a Task Force to see what going on with the price of gasoline? I'll save the taxpayer a few million right here: less refining capacity, higher demand and a weakened dollar is the cause. And two of the three are directly attributable to the US government. Oil refineries are anathema to liberals who resist fiercely any attempts to poison Mother Gaia with hydrocarbon combustion byproducts. And the weakened dollar? Lay that one right at the doorstep of dems and RINO's.

This is going to get worse before it gets better. Republicans have been no friend to the consumer either. Bush 43 waited until the final months of his two terms in office before moving to end a twenty-seven year ban on new off shore drilling imposed by his father.