The Blanco Republic
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Protesting Gas Prices, Service Stations and Other Feats of Stupidity

Protesting Gas Prices, Service Stations and Other Feats of Stupidity – Part One

by Ernest O’Dell

Most of my readers know me, or they are personally acquainted with me and know what I do to keep the body “glued” to the soul. I write… yes, that’s my passion. But I work in a gas station/convenience store to pursue that passion. I also work in other areas of marketing, advertising and communications. But, like all forms of sapiens humana, I must fuel the body to keep the machine running.

Over the last year or so, gas prices have become the prevalent conversation at the check out stands at many gas stations and convenience stores. Like many of you, I have attempted to understand what’s going on and I want answers, too. I don’t want someone to assuage my curiosity with mere platitudes, but I wanted some real, concrete, answers.

Well, my friends, I’ve found some answers, and thought I would pass them on to you – my neighbors, friends, customers, and to the reading public. If you own a motor vehicle that uses anything other than bio-fuels or electricity, and you’re not fortunate enough to have one of those fancy “fandangled” hybrids, then you’re probably driving a car or truck powered by gasoline or diesel. (Pardon my jab at humor, but we don’t have many other options here.)

If you’ve spent anytime on the Internet in the last 10 years you’ve probably seen some pretty dumb “urban legends” floating around in your email. I get them, too – usually from friends – but I’ll just delete them and go on with my “rat killing” (as my dad always called it).

One of them speaks of boycotting all gas stations for a day, or a weekend, to “force” the “evil” oil companies into lowering prices. Yeah, right! (Pssst! Are you still with me?) It won’t work…

The reason I took it upon myself to research this subject is because I have a lot of people really want to know the “why” and “when” of all this. They think they already know the “who, when and where” of it all, so let me answer some of those questions. As to the why and when of it all, you can conjure up your own questions.

Okay… stick with me here for a few minutes. Gas and oil prices are not going to go down. Not significantly anyway, and not in the near future. If they do, I’ll be surprised. Sorry! Letting the proverbial “cat” out of the bag isn’t going to make lot of people happy, but I didn’t like the answers I found either.

Gas prices in America, and especially here in the Hill Country, are the lowest in the world. Did you hear what I just said? I said, “We have the lowest gas prices in the world!” Not just here in Texas, but in the whole of the United States. In California, gas prices range anywhere from 50 cents to another dollar higher that what you see at the pump.

Why are our gas prices lower than everybody else in the world? Because the United States has ALMOST NO ENERGY POLICY. Almost…

If you don’t think that’s true, then let’s look and see what consumers are paying for fuel in other parts of the world:

The cost of gasoline in Europe

(Prices converted into dollars per gallon from liters)
Netherlands $6.77
Norway $6.56
Denmark $6.29
Belgium $6.02
UK $6.02
Source: AA Motoring Trust

Here’s some more facts: Gas prices are almost the same as they were in 1980. When gas prices go up, it does no good to harangue the President because it matters not who is living at 1600 Pennsylvania Avenue. No president can mandate prices to the gas and oil companies. Why? Because the petroleum industry is a private enterprise like many of the employers who provide jobs for you – and your children.

Another fact: For decades, much to the irritation of our friends around the world, our gas prices have been artificially cheap for thirty years. Not as cheap as, perhaps, Venezuela – where gas sells for about a quarter a gallon – but cheaper than anywhere else in the world. What we pay for a gallon of gas here in the United States, many people in foreign countries pay almost the same for a liter. It takes 3.7854 liters to equal a gallon, so multiply your price per gallon by the liter. So, an average $3.00 gallon of gasoline can cost anywhere from $6.00 a gallon to $11.36 – from Europe to Japan, China… or Australia. (Last time I corresponded with my Australian counterparts, they were paying around $8 a gallon less than 5 years ago.

Hmmm… not much comfort there. Paying $3 per gallon in our part of the country is a flat out bargain. Adjusted for inflation, it’s not as bad as one may think.

You know what costs a lot of money? Bottled water and a gallon of milk for your kid’s cereal. It costs practically nothing to make a gallon of water and sells anywhere from $1.69 to $9 per gallon – depending on where you live. Milk is a different story. Americans will buy anything…

Having said that, and because we’ve produced less oil (in lieu of maintaining the pristine beauty of Alaska and West Coast shoreline) – and because the way we buy oil from countries who hate us – well… prices of gas are going to continue to increase. I would surmise that – by 2009 – we will probably start seeing prices in the $7 per gallon price range at the pumps. I hope I’m wrong.

What’s a visit to the gas station cost in the U.K. or Germany? More than double what we pay here in the U.S. Last time I corresponded with some friends of mine over in London, England, they were paying almost $7 per gallon.

The price people see at the pump is not anyone’s “fault.”

OK, it’s YOUR fault and MY fault. Why? Because we have the best government that money can buy and we allow our elected officials to spend money on things like Social Security, Medicare, Wars, Welfare, Unemployment Comp, and all sorts of other “entitlements”. And, because these people in government are elected by you and me, we decide we don’t want income taxes to go up, which would get your Congressman fired next year. So we continue to re-elect them and we continue to complain.

Are You Ready For The Full Story?

Want to know if you should join the protest? Want to know where gas prices are going next? Want to know what President Bush should do? Want to know what YOU should do?

Protesting Gas Prices, Service Stations and Other Feats of Stupidity – Part Two

Protest? A lot of good that will do. Gasoline (and other products made from crude oil) are taxed at both the State and Federal Level.

How Much Of The Price Of Gasoline Is Going To Your Government To Toss To The Wind?

The feds get about 20 cents per gallon. The states – on average – get about 20 cents per gallon of gasoline as well. Some states have bonus taxes (and subsidies) on top of these… lucky you.

So about 19% of the price of a gallon of gas is tax. Remember: these elected officials were elected. And because entitlement programs were part of their campaign platforms, and the voters wanted them (the entitlements), our elected officials forgot to tell you ONE IMPORTANT thing: somebody is going to pay for them.

I digress here when I say that I strongly believe that we should “take care of our own” and that teachers, especially, should be paid more than they receive. I also think it would be a grandiose idea to have a National Health Care system, but… who is going to pay for it? Yep! You guessed it. You and me… whether we drive a car, or whether we walk back and forth to work.

The cost of crude oil makes up about 53% of the cost of a gallon of gas in America. Now we’re up to 72% and the poor schlep who owns the gas station hasn’t made a PENNY yet. Next you have distribution and marketing costs. This is a surprisingly modest 9% per gallon. Now we’re at 81%. Finally, refining and good old fashioned PROFIT makes up 19% of the price of a gallon gas.

19% – taxes
53% – cost of crude oil
9% – distribution & marketing
19% – refining and PROFIT

So… just how much do those “evil people” at the big oil corporations make off of us at the pump?

How Much Do Those Evil People at the Big Corporation Make on a Gallon of Gas?

About 10 cents profit per gallon. Granted, millions of gallons of gas are sold across the country each day, which explains why you get upset with the P&L quarterly statements posted by the media.

Ten years ago I had some friends who invested in petroleum stocks (right about the time we first landed in Kuwait to drive out the Iraqi invaders). They saw it coming and they’ve done pretty well with their investments. Earnings were way down and oil companies were the cheapest stocks on the stock market. When the “invasion” took place, stock prices took a noticeable rise. Hmmm…

What else would have been a good investment you could make in the last 20 years? Colleges and universities — along with medical/biomedical technology.

While the price of gas in actual dollars and cents went up about 60%, way below inflation, the cost of TUITION and EDUCATION has gone up 325%! Now, that’s something to get huffy about. (WAY above inflation.) You’re getting “taken to the cleaners” at the University, not at the gas pump.

PROTESTING and BOYCOTTS?

Protesting and NOT BUYING GAS on Saturday (or for a whole week) will do nothing to the price of gas. I apologize for being the bearer of bad news, but don’t shoot the “delivery boy”. Boycotting is just another feat of stupidity.

Try this: Toilet paper prices are high. Boycott toilet paper. Or milk… or bottled water. (Or for that matter, soda.) Price gonna go down? Consumption going to go down? Nope.

How CAN We Make the Price of Gasoline Go Down?

If 300 million Americans refuse to drive their cars four to five days per week, that would bring down the price of gas, as much as 30 cents per gallon… maybe. If you elect people to Congress who will pull the plug on Medicare, Welfare, Social Security, unnecessary wars, “education”, you might knock off another 50 cents per gallon. Again… maybe.

Those two things are the ONLY things that you can do to reduce the cost of gas.

Put a Ceiling on Gas?

Sounds socialist to me. Governments setting the prices of a free market enterprise. Let’s suppose that Congress could draft and enforce a law to put a ceiling on gas prices at the pump. Sounds great politically. It might even get someone elected. But it won’t change the price of gas. It will only change what the gas stations can charge you for a gallon of gas at the pump. The taxes on the gas, the gas itself, and the oil itself will all remain the same. It’s the guy who owns the store that gets penalized, and he will have to go out of business (and there’s a lot of these families out there). That means a lot of people will be out of jobs, and a lot of kids will be looking to wash dishes in a restaurant during the summer.

The “evil oil companies” don’t determine the price of fuel.

This is not like tuition at the University of Texas, A&M, or Texas State. It’s also not like the price of medical and auto insurance.

The ultimate problem is really simple — and the solution is almost as simple as the problem.

America only produces a small amount of gasoline in comparison to the rest of the civilized world. We consume (and I’m guessing here) about 8 to 10 times what we produce. If we stopped USING fuel for automobiles, that would bring price down the 10% noted last week… maybe 20% if we really stop and dump about half the cars in use. Switch to public transportation – buses, subway, electric train, airplane – and that might make a small dent in the price at the pump. However, prices might go up anyway just to offset the loss from revenue. (Again, I’m guessing, not prophesying.)

“But that won’t work for us, Ernest! We live and work in the Hill Country and many of us depend on our vehicles for our jobs, and we commute long distances to our jobs!” I agree. Without our vehicles, many of our tradesmen would be out of work. Plumbers, fencers, electricians can use public transportation.

We consume about 25% of the world’s oil, that still isn’t enough for our behavior to make a monster sized dent in gas prices. And because we’re addicted to – not oil – but our behaviors and desire for instant gratification, we will continue to keep our cars because they really do make our lives a lot easier.

How is the Price of Oil Determined?

The price of oil is determined on the free market. A lot of events can affect those prices, like war, invasions, OPEC, etc. Even the almighty Bush and lousy shot Cheney can do nothing about oil prices. Neither could Nixon, Ford, Carter, Bush One, and neither can Clinton or Obama…

If any politician says they want to put a ceiling on gas prices, DON”T NOT VOTE FOR HIM (or her). They are only going to tell you what you want to hear (instead of what you NEED to hear) solely to get elected – or re-elected. If they tell you they can legislate gas prices, they are lying to you, causing innocent families who run gas stations to go broke for the luxury of them looking good to the electorate (people who vote).

If Americans (and Hill Country Texans) stop driving their automobiles, that won’t help. It’s not going to give you $1.50 gas again. There’s a little thing called the rest of the world where gas is consumed as well.

Companies like ExxonMobile, Chevron, Texaco, Shell, BP/Amoco employ hundreds of thousands of people with decent wages. When we stop consuming gasoline in America, they will lose their jobs. (On a personal note, I do think we need to reduce fuel usage in our country. What we do to the environment is insane.)

The employees of “Big Oil” will become unemployed and will become an enormous burden on you and me because of idiotic things like “going on unemploymenet” and “welfare” and so on. This will be an ENORMOUS tax on American tax payers — not people who don’t pay taxes.

Companies like ExxonMobile, BP/Amoco, Shell (Royal Dutch), Texaco, do not make weapons to kill American soldiers. But Citgo, which is owned by the GOVERNMENT of Venezuela, whose president is Hugo Chavez, is a sworn enemy of the free world – and does take that oil money and build weapons to kill Americans. (Another subject…)

Do You Want To Boycott?

Want to stop buying gasoline? Then stop buying from Citgo! If you really want to stop Americans from being killed, stop buying gasoline PERIOD. Then the Middle East will have no hold over America. None. Zip. Back to oil and gas.

People want to pay for cheap gas? How should they make it happen?

Drive less. Plan your routes and errands. Keep your automobile tuned up and tires at proper inflation. All that good stuff you’ve heard a thousand times before. Limit yourself to 5,000 miles per year. If everyone did that, we’d pay $2.60 per gallon… perhaps.

“But Ernest, they’re paying less than a quarter a gallon for gas in Venezuela.” Okay. Move to Venezuela where gas sells for 12 to 25 cents per gallon. That’s what happens when far more oil is produced and no one drives.

Why is gas and oil so cheap in Venezuela? Labor. It costs nothing to pull oil out of the ground in Venezuela. The Venezuelan people are impoverished and will work on every front to get it to an American’s car. Their system is about the same as it would be for flipping burgers. On average, Venezuelans get paid about $4800 annually. That’s about $2 per hour. After taxes, even less.

Want to address the problem of gasoline?

Stop buying cars and trucks. Stop driving. Whoops! That won’t work either. Use planes, trains, subways, bicycles, mopeds and not only will gas prices come down a little in America but we won’t be killing Americans because we want to drive somewhere instead of walking or taking the bus.

And for all of my friends who sell cars, tires, work on road crews, get government checks, work for the gas and oil companies… you don’t have anything to worry about for quite some time. Investors are still buying your company’s stock, and they’re still contributing to the PAC’s who continue to re-elect our “officials” at the State and Federal government.

America won’t learn until it’s too late. But maybe we can teach Americans to THINK again and see where problems really are. Hey, don’t buy toilet paper today. Let’s make Wal Mart feel the pressure… or we’ll just quit usin’ the stuff. That’ll show ’em… yeah, right!

That might not be a workable strategy…

This three part series has not been all “opinion” on my part, nor does it represent the views of this publication. If you’re really interested in learning more what you can do about high gas prices, I can recommend some good books and resources. Feel free to email me at wtmi@moment.net. I’ll be glad to send you some links to good resources to ease your “pain”.

Ernest O’Dell is an occasional free-lance contributor to several newspapers, magazines, ezines, and blogs. Online resources are listed below.

Gasoline Prices and the Consumer: Perceptions and Realities

Gas Prices in Europe – European Gasoline and Diesel Prices

Gas prices too high? Try Europe.

What does gasoline cost in other countries?

A Primer on Gasoline Prices from the Energy Information Administration

Current Gas Prices and Price History

Why Do Gas Stations Hate Us? (They don’t… but you can read what this site has to say about it.)

Gas Price Watch at GasPriceWatch.com

The Truth Behind High Fuel Prices

Why Gas Prices Will Stay High

Google Searches:

Gas Prices In Europe

Liter To Gallon Calculation

World Wide Fuel Prices

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One Response to “Protesting Gas Prices, Service Stations and Other Feats of Stupidity”

  1. […] Ernest O’Dell is an free-lance contributor to the Blanco County News. You can read the full content of this article and find online resources at https://blancorepublic.wordpress.com/2007/06/10/protesting-gas-prices-service-stations-and-other-feat… […]


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