Gas prices

[skipper3905]

Steve,     OK, I'll jump back in. Those were good questions in your post and will give it a shot on answers. If you (a competitor) called me and said "Let's go up 2 cents" I would tell you we can talk about the weather or girls or anything else but we are not talking about gas prices. That's that! End of story! I have not and never will talk to a competitor about prices. It is against the law and really just not good business. If you are interested, I can explain the good business part sometime. You will understand.

What pushes up gas prices is the price of oil. Every time you listen to the news and hear oil went up $3 a barrell, you can bet your booties me and every other gas station owner gets a 7.5 cent a gallon increase that day. 

What pushes up the price of oil? As long as somebody in the world is willing to pay $115 for a barrell of oil, that's the price! Just exactly like wheat, silver, gold, coal, copper, tin, titanium, zinc, soybeans, porkbellies, orange juice, or any other world commodity. It's that simple! 

You mentioned the oil company is only a agent for collection in reference to my mention of taxes paid by Exxon. Exxon is a collection agent for excise taxes. The $30 billion I said Exxon paid in 2007 were income taxes. Big difference! Fed excise taxes are 18 cts gas and 24 cts diesel. That is just a wash, whatever excise tax Exxon collects it has to wire transfer the 24th of each month to the IRS. Trust me, the IRS is waiting on Exxon's wire. 

Income Tax subsidies and loopholes are harder to explain. Until 1975 oil companies had the "oil depleciation allowance". That really was a complete and total ripoff to the taxpayer. Started in 1924 and really got jacked up under LBJ. That whole era was replete with corruption and the oil companies were hip deep in it and the main culprits were from right here in Texas. It is still technically on the books but only for very small oil companies and then only when oil is under $20 a barrell. Just not a factor anymore.

There is another loophole called "Enhanced recovery credit". I don't know all the particulars on this but the govt gives some help for stripper wells (under 5 bbl a day). Major oil companies don't mess with these so again only for small operators. Personally, I think it needs to be done away with and probably will be. At todays prices about 80% of all stripper wells are profitable and the rest need to be shut down anyway. There is some provision for help under this tax provision on high sulpher refining. I don't know the dollar amount of this but Valero is the only refiner in America that can refine high sulpher oil and that is only at one refinery. There is just no sense in this Federal Income Tax provision, it needs to go. I just don't think this is a big money item. 

"Intangible drilling cost" is called a loophole but is really a timing matter. Oil companies get to deduct 70% of drilling cost the first year and the remainder over five years. Over a five year period the effect on their taxes is zero, just like any 5 year equipment depreciation. I think this needs to be eliminated too. Drilling cost should be depreciated over 7 years just like you do your tractor, your farm truck, or any other capital equipment business item you own. There is no reason for oil companies to get any different depreciation method than anybody else. It does not save them any money over the long haul and just gets bad PR for them. It would be smart for them to lobby to get rid of it.   

One last thing. This is a contract matter, not a legal loophole but some might call it a loophole. During the Clinton administration nobody was drilling in some offshore areas. Oil companies needed $50 bbl oil to cost justify. No oil company was willing to take the billion dollar risk in these areas. The govt waived 17% royalties to induce drilling. At the time nobody knew we were going to have $115 oil. The problem is, those companies that took them up on it made a binding contract with the govt to waive royalties on those wells. Just like with us, a contract is your word.

That's it for federal tax loopholes for oil companies. If you can find another one, let me know, we can make a tub of money as consultants.

Hope all this made sense.

     

[slider]

Man you wasting your ink....

[Pheasant Hollow Farm]

Well tomorrow is Wednesday where all the local stations ban together to either raise or lower or to remain the same..

I will post my finding tomorrow.. Post your findings here also.

Steve
Phesant Hollow Farm

[slider]

Well I have to leave in a few minutes to go to Mississippi , so I will know soon enough...

[Pheasant Hollow Farm]

Well I have to leave in a few minutes to go to Mississippi , so I will know soon enough...

Safe trip slider!!

Steve
Pheasant Hollow Farm

[laughingbear]

yesterday it was 3.499 in Jay, In pensacola is cheapest i found was 2.399 (at sams club)

Have not got a chance to look today, but i am sure it is up again!!   

[slider]

Yep...up .10 in 3 days 3.45.9  a .5 higher in Mississippi...Going to South Louisiana tomorrow will see how much it is down there...

[Reeves]

Hazardous work place

http://www.outdoorsmenforum.ca/showthread.php?t=14540

[Pheasant Hollow Farm]

Interesting comments.

Steve
Pheasant Hollow Farm

[Reeves]

It's a bit of a funny site. More often than not, photos are put down as "photo shoped". Regardless, cool picture !

[Pheasant Hollow Farm]

As I had stated on Tuesday, Wednesday is usually(you can set your watch by it) the day they lower the gas prices by as much as $.05-.10 per gallon.

Well not even one of the 4 station that I have mentioned earlier dropped the price. What will happen now is they will wait for the corprate phone call and all 4 stations will raise them for tomorrow morning.

Gas still at $3.65.9 at all the 4 stations.

Steve
Pheasant Hollow Farm

[Pheasant Hollow Farm]

Reeves,

What's the gas prices lately? Are they changing as much as ours in the States?

Steve
Pheasant Hollow Farm

[CharlieHorse]

It appears to me that nobody is getting the underlying big picture here:

"Immigration control"

Make it so expensive in this country to live, that nodody wants to come here anymore.  

Those politicians are some of the smartest people on the earth, no wonder they make so much money. Gives me this warm fuzzy feeling inside knowing that my vote really does count.........or does it?  

[CharlieHorse]

What's the gas prices lately?

Actually, I don't even look at the price. 

My cousin owns a BP station. I hang out there upon occasion during morning rush hour. People come and go, complaining about the gas price, one remark after another........all the while with a bottle of $1.89 water in their hand, a $1.50 candy bar, a $3 energy drink, and maybe a $3 power shot........and a, "give me 10 numbers on the Mega Millions, 5 of those #7's and 5 of them #14's" (scratch-offs).

Get my point?  Priorities are totally screwed up in this country. When I was growing up, a bottle of soda (glass) was a treat about once a month, now it's as if it's a birth right.

Not that I don't feel the pinch, but just how bad is it............really?........yet?  

[Pheasant Hollow Farm]

Here ya go CharlieHorse 

If she doesn't have a script, she is lost 

Steve
Pheasant Hollow Farm