Admittedly, this is off the topic of this blog, but when I saw this article in the most recent edition of the University of Denver Magazine, I wanted to share. Not that I’m a fan of current gas prices, mind you, but I thought these 10 points added some perspective. (Note: this is a reprint that I found interesting. If someone would like to dispute these points, please post a comment.)
1. Gas prices have increased, on average, less than one percent annually since 1981.
2. At current prices, major oil companies earn between 10 and 13 cents per gallon — less than the profit margin in beverages, chemicals, electical equipment and computers.
3. Drivers in Europe today pay more than $8/gallon for gas.
4. Crude oil prices are set by the forces of supply and demand on the world market, which fluctuates hourly.
5. Although oil producing countries acting through OPEC prop up the market price of crude by limiting production, those countries are not subject to U.S. antitrust laws.
6. Oil companies currently spend billions — $15 billion by Exxon alone — to explore and expand production.
7. Colorado regulators recently sued Safeway for selling gas “too cheaply.”
8. A “windfall profits” tax on oil companies would increase the total cost of producing a gallon of gas, a cost that would ultimately be reflected at the pump — in effect, the economic equivalent of a gas tax on the consumer.
9. Politicians are increasing the price of gas by imposing gas taxes of up to 68 cents per gallon.
10. The current price of gasoline in the U.S. is too low to discourage consumption and cut greenhouse gas emissions. Last year U.S. gas consumption actually increased.
Again, this is not my field of expertise, so these facts may in fact not be (facts, that is), and I’d welcome debate. I do, however, find them interesting and worth considering and discussing. Thanks to Robert Hardaway, a professor in DU’s Strum College of Law Environmental and Natural Resources Program, for publishing these in the most recent Univeristy of Denver Magazine.
[digg=http://digg.com/business_finance/Little_Known_Facts_About_Gas_Prices]
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