Gasohol

"Matt Barrow" wrote:
http://www.redplanetcartoons.com/wor...7gasprices.jpg

It varies of course with location, but for a gallon of branded gas sold
in California the average values appear to be[1]:

$3.44 Retail price per gallon.
$0.62 Taxes (18%)
$1.61 Crude oil cost (47%)

Profit margins vary a lot by company and over time, but a mid-term (not
long term) average of ~8% seems a useful number.[2] Though Exxon managed
to get nearly 11% last year.[3] So for the above $3.44 gallon of gas,
and if they were still getting 11%, their profit would have been:

$0.38 Oil company profit.

So the $0.09 in the cartoon may be the gas station owner's EBITDA per
gallon.

The industries that really have high profit margins are banking, drugs,
and software. People rarely complain about price gouging from Microsoft
or other software companies, but their profit margins are quite large
relative to other industries. And some people wonder why I'm still in
the software business. ;-)

[1] http://www.energy.ca.gov/gasoline/margins/index.html
[2] http://www.gravmag.com/oil.html
[3] http://money.cnn.com/2007/02/01/news...xxon/index.htm

On Fri, 01 Jun 2007 17:58:28 -0000, Jim Logajan
wrote:

Profit margins vary a lot by company and over time, but a mid-term (not
long term) average of ~8% seems a useful number.[2] Though Exxon managed
to get nearly 11% last year.[3]

Exxon had a good year in part because it owns a lot of refineries. In
the past, refineries have been a very bad business (the money was all
in extracting oil from the ground) but lately there's been a huge
shortgage of capacity (hurricane Katrina, Europe no longer exporting
much gasoline) so refineries are stretched to the limit.

When something is stretched, the price goes up, which is why Exxon did
better last year than say Royal Dutch Shell or Beyond Petroleum.

(For years, we have been importing gasoline from Europe. Isn't that a
hoot? They've historically tended to need more diesel than the
refineries could easily produce without exporting the lighter stuff,
and the excess came to us so the yuppies didn't have to have a bad ole
refinery in their backyard.)

Blue skies! -- Dan Ford

Claire Chennault and His American Volunteers, 1941-1942
forthcoming from HarperCollins www.flyingtigersbook.com