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Saturday, December 29, 2012

SO WHO’S 'REALLY' RAKING IN THE MOST MONEY FROM THE SALE OF GASOLINE?



Before you answer, I want you to think about something. The top 10 states with the highest state taxes on a gallon of gasoline also happen to all be blue states, that is they are all states that went for Barry "Almighty" in 2012, with the exception of two states that were blue in the 2008 election but then turned red this year. According to data analyzed by the Tax Foundation and provided by the American Petroleum Institute, the title of having the highest taxes (cents per gallon) on gasoline goes to New York. There the total state-level gas taxes equals 49 cents.

Coming in, in second place, which is actually a tie, are California and Connecticut, there the total gas-per-gallon taxes equals 48.6 cents. North Carolina comes in at number six on the list, with taxes of 39.2 cents – the Tar Heel state went red in 2012 for Republican challenger Mitt Romney but was blue in 2008 when Barry was elected to his first term. Indiana was the other blue-to-red exception, and has a gas tax of 38.9 cents. Florida rounds out the top ten list. There the gas tax equals 35 cents on every gallon.

The top 10 states with the highest gas taxes are listed below:
New York 49 cents
California 48.6 cents
Connecticut 48.6
Hawaii 47.1 cents
Michigan 39.4 cents
N. Carolina 39.2 cents
Illinois 38.9 cents
Indiana 38.9
Washington 37.5 cents
Florida 35 cents

So why does gas cost so much, and who is making the most money? Now you can blame high gas prices on rich oil company executives or greedy gas station owners if that makes you feel better, but that’s not actually the case. The truth is that governments rake in a much larger ‘profit’ at the pump than anyone, and sadly there appears to be no relief in sight. The fact is the price of a gallon of gas is based on the combination of four costs: that of crude oil, of refining gas, of distribution and marketing, and, of course, taxes.

Crude oil costs make up about 76% of the cost of gasoline, and that’s according to U.S. Energy Information Administration (EIA). Thus $2.66 of a $3.50 gallon of gasoline is set before the oil is even refined. Global markets, reacting to supply and demand, are what actually determine the cost of crude oil. Just like any other commodity, from gold to corn, a shortage in supply or an increase in demand leads to a rise in prices. And with Barry pretty much refusing to allow any new drilling in this country, we continue to be at the mercy of foreign suppliers.

Refining oil is the next step in the process—and the next expense for drivers. Gasoline is extracted from crude oil and additives, including lubricants and detergents to reduce engine deposits, are added. As of January 2012, the EIA found that refining was responsible for 6% of the cost of gasoline. Also worth keeping in mind here, is the fact that we have not been allowed to build a new refinery here in this country for over 30 years, we’ve been prevented from doing so by the same politicians who prevent us from drilling.

Distribution and marketing, the part of the process most apparent to consumers, constitutes another 6% of gas prices. That portion of the cost includes the shipping and transportation of the gasoline, a markup to cover retailers' expenses, and any advertising created to appeal to customers. I can only assume that many folks, when accusing, or in nodding in agreement as Barry talks about greedy oil companies, must think this all happens by magic, totally free from any investment of capital being needed. Those folks are, morons!

The remaining 12%, or roughly 50 cents per gallon today, goes directly to federal, state and local governments in an array of sales and excise taxes. The federal gas tax is 18.4 cents on every gallon of gasoline sold in America. State gas-tax, as pointed out earlier, rates vary from a low of eight cents per gallon in Alaska to a jarring 49 cents per gallon in New York. Other states where it's steep to fill up include California and Connecticut—each with 48.6-cent-per-gallon gas taxes—and Hawaii, at 47.1 cents per gallon.

Some local governments have even gotten in on the act. In California, local sales and excise taxes on gasoline average 3.1%, according to the Los Angeles Times. That works out to about 12 cents in local taxes for each gallon of gas, based on the state's current average of $3.80 per gallon. Skokie, Ill., a suburb north of Chicago, levies a gas tax of three cents per gallon. You'll pay an extra nickel per gallon at gas stations in Eugene, Ore. In Florida, Brevard County expects to siphon more than $15 million from motorists this year, according to the newspaper Florida Today.

Put this all together, and government makes far more from gas sales than all of the oil companies put together. Exxon, for example, made only seven cents per gallon of gasoline in 2011. That's a drop in the bucket compared to the nearly 50 cents per gallon that federal, state and local governments rake in on an average gallon of gas pumped in the U.S. For some families struggling to make ends meet, paying 50 cents per gallon in taxes may be the difference between driving to work and putting dinner on the table.

So the next time you feel the urge to, or Barry tries to convince you to, blame those evil, greedy oil companies, speculators or service stations for high gas prices, remember that no one makes more money off of gasoline than government. So what that means is, we have a government that does not spend one dime in bringing the product to market that is the very same entity that makes the most money off of the sale of that product. How insane is that? And what give any government, whether local, state or federal, the right to do so?

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