Who Profits Most at the Pumps?

The gross profit margin for a gallon of gas in America today, is what it has always been, on average, .08 cents per gallon, (2.5% at $3.00 per gallon). Though retail gas prices fluctuate with crude prices and supply vs. demand, the gross profit margin per gallon remains roughly the same at all times. (No evidence of price gouging here.)

However the federal government profits approximately .59 cents per gallon through gasoline taxes, 7 times (or 750%) that of the oil producers themselves and 20% of the price at the pumps. Pay attention here, Washington liberals are attacking oil companies for their 2.5% gross profit margin, while Washington is profiting 20% per gallon. Democrats answer? Tax some more!

If oil companies cut their profit margins by 50%, it would drop the price of a gallon of gas by only .04 cents per gallon. If Washington law makers cut their take by 50%, gasoline would cost .30 cents per gallon less. If the federal government didn't tax gasoline at all, the price per gallon at the pumps would be $2.40 per gallon instead of $3.00 per gallon and the oil companies would still be at a respectable 2.5% gross profit margin. Who is gouging whom?

Are Americans specifically being gouged by OPEC?

Quite the opposite. The most expensive places in the world to buy gas are The Netherlands, Norway, Italy, Denmark and Belgium, all of which are now above $7.00 per gallon at the pumps. Of course, all of which are socialist governments with even heavier taxes per gallon than America.

The least expensive places in the world are Venezuela, Nigeria, Egypt, Kuwait and Saudi Arabia, ranging between .15 cents and .95 cents per gallon at their pumps. That's because these are the largest oil saturated countries in the world.

America is the single largest consumer of oil products, yet our retail prices are very average in the world market, despite excessive federal taxation. Who is gouging whom?

Where does all the money go?

Based upon a $3.00 gallon of gasoline, the average break-down is as follows.

Gasoline Retailer $.01 cents per gallon
Oil Company $.08 cents per gallon
Refining $.29 cents per gallon
Marketing/Distribution $.32 cents per gallon
Taxes $.59 cents per gallon
Cost of crude $1.71 per gallon (delivered)

State to state, additional gasoline taxes and refining requirements as well as distance from the closest refinery are the largest factors. California is particularly high due to their excessive taxation and environmental blend requirements as an example. These added refining requirements also means that California experiences more shortages than any other state. When they run low on supply, they can not import from a neighboring state without violating their more stringent state environmental codes. So who is gouging whom?

The Democrats answer to every problem, tax it some more!

But the real problem is that corporations don't pay taxes! They do collect and remit taxes. But every penny of taxes placed on corporate income is passed on to the consumer in the form of higher retail prices, just like the .59 cents per gallon of federal taxes being collected on behalf of the federal government at the pumps today. And this is also why Senator McCain's proposal to increase gasoline taxes by as much as 30 cents per gallon to "send a message to Big Oil" will ultimately hurt everyday Americans.

So will electing Democrats who hope to tax gasoline (or any corporate entity) even more help curb prices at the pump, the supermarket or anywhere else? If so, I'd sure like to hear how?

How do you think gasoline got to be .59 cents per gallon higher than need be? How do you think our government got to the point of consuming nearly 60% of GDP in the first place?

You show me where the problem is and who is doing the endless gouging of average Americans?

Is it the oil companies at .08 cents per gallon? Or is it the government at .59 cents per gallon, for producing absolutely nothing?