Just Who is Gouging Us on Gasoline?

[Geee]

American Thinker:

Americans are fed up with high gas prices, and some U.S. senators are getting disgusted enough to act. Appearing in front of an Exxon gas station last week, Charles Schumer and several other senators called for the elimination of tax deductions oil companies use in their business of finding, refining, and marketing the precious energy we use. It is time we are outraged by blatant greed at the gas pump, they implored. Some of us agree, but for different reasons. Let's have the courage to name those who are getting the biggest cut from our gasoline dollars, and put a stop to it.

Understand where our money goes when we fill up at our corner station. Oil company profit is one place: the after-tax profits earned by the most successful oil companies in America works out to about 8-9% of revenues. That's 8 cents of every dollar we spend at the pump, and it's been much lower in years when prices are squeezed by too much supply. Sometimes there are no profits, but rather huge costs, if mistakes that get nasty are made in exploration or transportation (e.g. Exxon Valdez and BP Gulf spills).

The senators standing in front of the gas station would have you think such profit is the biggest chunk of your purchase price -- but it isn't even close. The taxes on gasoline at retail amount to a national average of 47 cents per gallon (including federal taxes of 18 cents, state and local taxes of 18 cents, and sales/other taxes at retail of more than 10 cents). And before taxpayers have paid that princely sum (to people who haven't invested a penny to produce the product), the operating profits of the explorers are taxed at 34% -- which is always passed on to consumers in the form of higher prices. States get into the act here too, taxing the retailers' profits after taxing the product at the pump. And let's not forget the other costs that drive up the gallon price, such as drilling restrictions that force explorers 5 miles deep under the ocean, transportation regulations and taxes, refining regulations, licenses, leases, and myriads of others.