Help me with myMath..

[PeteOz77]

I realise there is an OIL MAN in the white house. I also realise that in the "War on Terror" (not Terrorism, or Terrorists, but a war on Terror) certain things must be sacrificed (for some reason), but I have worked Excel in every fashion that I can, and something just doesn't add up. Maybe my computer is broken, or I am working it improperly?

In Australia, pretty much EVERYTHING costs more than in USA. Levi's start at $60, A "Value Meal" at KFC costs over $8, and a Toyota Lancruiser can set you back well over $100K. Wages on average are quite a bit higher, so that helps offset some of these costs, and if you stay away from luxury items, it's not really all that bad.

So when I moved here in 1998 and I saw that the average price of a litre of fuel cost 90¢, I just sucked it up and paid for it...not much you can do when you need to drive to work eh? Just doing quick math here, that was around $6.18 US dollar for US Gallon, based on a 55¢ exchange rate for AUS dollars to US DOllars.

I drove past the pumps yesterday, and petrol was $1.45 litre, the highest I have ever seen it. With today's much more favourable exchange rate (due to the US Dollar being in the TOILET (another Dubya issue..)) I am curently purchasing petrol for $4.67 USD for US Gallon. Or roughly 25% cheaper than it was 8 years ago in US dollar to US gallon comparison.

OK, SO I don't live In USA, and I don't pay US dollars and I don't buy US Gallons. In reality, I am paying $1.45 versus 90¢ per litre, or roughly 62% more.

Let's compare that to the cost of gasoline in USA over the same time period. My brother rang me in 1999 and in the course of our conversation, he commented on a "Gas War" that was going on in his town (Not sure if he was in texas, arkanas or Florida at the time), he had just paid 86¢ a gallon. The highest I rememebr paying in MN pre 1999 is around $1.20.

Here's where my calculator starts to smoke.... How is it that the cost per gallon of fuel in America has more than TRIPLED, with talk of it going to nearly $5/Gallon this year, making it more than QUADRUPLED, when the same product here in AUS has gone up by little more than 60%? As a matter of fact, on the world stage of US dollar for US gallon, it has gone DOWN by 25%?

Please keep in mind Aus is a massive country that is sparsely populated, and transport costs for everything are a LOT higher here than USA. We also have 31¢ a litre in Excise Tax per litre (over $1 US per US gallon) as well as a 10% "Sales Tax" on every litre sold, which was added in 2001.

I keep hearing that "The oil companies only make a small portion of the profit on Gasoline"

Who the H3LL is making all the money then?

WHY has the cost of gasoline in USA increased by 400%, and it has only increased in AUS by 60%?

WHY is it that in US DOllars for US gallons, Gasoline is actually CHEAPER now than it was 8 years ago?

Someone (or more like 300 million someones are being lied to and SCREWED by their Oil Man Preznit and his mates.

 

[Ooompa Loompa]

I was going to write up a super long reply to this, but then decided it wasn't worth the effort. But I will say this. If you believe that the president is waving some kind of magic wand and making oil prices go through the roof then that is fine, everybody is entitled to their own opinion.

 

[TwoHeadsBrewing]

Not sure about the math...haven't really thought about it too much. However, here's something I know: in a free market, products are priced at whatever the market can bear. They will charge as much as they can until the market responds negatively to that price. In the case of oil, I think we've been hooked on it so long at such a cheap rate we can't get off the teat. It's like a drug...we've built up a tolerance so we want more, and then the dealer now knows he can charge whatever the hell he wants.

This only lasts until the addict dies, finds a better dealer, or finds a better "product". Personally, I think we should find another "product" for our energy "addiction".

 

[Donasay]

I was going to write up a super long reply to this, but then decided it wasn't worth the effort. But I will say this. If you believe that the president is waving some kind of magic wand and making oil prices go through the roof then that is fine, everybody is entitled to their own opinion.

If the president was waving some kind of magic wand, prices would be going down, or at least going up at the same exchange adjusted rate.

 

[PeteOz77]

I was going to write up a super long reply to this, but then decided it wasn't worth the effort. But I will say this. If you believe that the president is waving some kind of magic wand and making oil prices go through the roof then that is fine, everybody is entitled to their own opinion.

I am just trying to figure out why America is paying 4 times as much for their gasoline as they were 10 years ago, and I am paying LESS in US dollars/Us gallons than I was 10 years ago. Especially in an economy that consumes far less. I would think that in a "Free Market" situation, that USA would be able to purchase their oil at FAR less than Australia can, based on volume discount. I know that nearly every single other product I purchase I can negotiate a better price if I buy 150 times more of the product than someoen else.

I don't believe in magic wands.

I do believe that the president of the United States, and his cabinet do have a LOT of influence on the value of the US dollar. It has plummeted, and every single American is paying the price due to his "Leadership". If the reigning goverment (for the last 8 years) cannot be held accountable for the state of the union, then WHO can?

 

[Beerrific]

Slightly off the topic you are talking about....

So here is some math that I did last night after a news report that stated that "people are quiting their jobs because they cannot afford the gas."

So gas is about $0.60 more per gallon than this time last year. Say you drive 90 miles per day (ridiculously high, this was what the person on the news drove). Say you get 20 miles to the gallon. Then it should only cost you $54 more a month (20 work days) in fuel. I don't want to pry into anyone's personal finances, but $54/month is something you should be able to absorb. Now when you start talking about long cross-country trips, that is a different story, but is something you can plan for in advance.

For me, I drive 20 miles per day with 25mpg. It costs me $9.60 more per month than it did this time last year.

I am just trying to figure out why America is paying 4 times as much for their gasoline as they were 10 years ago, and I am paying LESS in US dollars/Us gallons than I was 10 years ago.

Is that true? I can barely remember when gas was <$1 per gallon. Last I remeber that was prior to the Gulf War. And in today's dollar, I don't think it has been <$1 in the last 30+ years. And I think the second part is because the US dollar is weak ATM.

 

[Sea]

Slightly off the topic you are talking about....

So here is some math that I did last night after a news report that stated that "people are quiting their jobs because they cannot afford the gas."

So gas is about $0.60 more per gallon than this time last year. Say you drive 90 miles per day (ridiculously high, this was what the person on the news drove). Say you get 20 miles to the gallon. Then it should only cost you $54 more a month (20 work days) in fuel. I don't want to pry into anyone's personal finances, but $54/month is something you should be able to absorb. Now when you start talking about long cross-country trips, that is a different story, but is something you can plan for in advance.

For me, I drive 20 miles per day with 25mpg. It costs me $9.60 more per month than it did this time last year.QUOTE]




I'm with you. I don't like paying more, but I don't drive needlessly, and fuel will have to get a lot more expensive before my habits will change.

You do realize however, that the cost of fuel influences EVERYTHING we buy. So cost of living increases more than just the difference of price at the pump.

 

[blacklab]

I keep hearing that "The oil companies only make a small portion of the profit on Gasoline"

Who the H3LL is making all the money then?

I'm not sure where you heard that one. ExxonMobil set the all time record for revenue in a quarter by a US public corporation last winter. $10 billion profit on $115 billion revenue. The oil companies are cleaning up.

Hmmm. Who do we know who's family is quite entrenched in the oil business?

 

[Beerrific]

I'm not sure where you heard that one. ExxonMobil set the all time record for revenue in a quarter by a US public corporation last winter. $10 billion profit on $115 billion revenue. The oil companies are cleaning up.

Hmmm. Who do we know who's family is quite entrenched in the oil business?

So a 8.7% profit margin. That is pretty close to average for corporate America, I believe.

 

[Ryanh1801]

Dude, take the tin hat off.

 

[PeteOz77]

So a 8.7% profit margin. That is pretty close to average for corporate America, I believe.

Yep, 8.7% of 400% higher prices = 400% more money in their pockets regardless of the percentage.

The percentage may not have moved, the gross profit sure has.

I know I would rather make 8.7%GP on a Trillion dollars than 8.7% on 250 billion.

 

[david_42]

Yes, regular was around $1.10 in 2001. The benchmark crude oil was about $26/barrel. So, US gasoline prices have tracked oil prices closely. The simple fact that the US imports so much oil ties us to the spot market, rather than long-term prices.

Something special must be happening in Oz.

 

[PeteOz77]

Yes, regular was around $1.10 in 2001. The benchmark crude oil was about $26/barrel. So, US gasoline prices have tracked oil prices closely. The simple fact that the US imports so much oil ties us to the spot market, rather than long-term prices.

Something special must be happening in Oz.

Well, it IS a magical place

But truthfully, the real problem here is that the US dollar has devalued SO MUCH that it's worth HALF of what it was in relation to the AUS dollar of just 5 years ago.

The exchange rate in 2002 as 48¢ and today it is 94¢. So that US dollar per barrel of oil isn't killing us as bad as it is killing USA.

Seriously, we are buying gasoline cheaper than we were in 1998 (based on US dollars for US gallons) because the US dollar is in the toilet.

According to WIKIPIDIA, the US dollar is worth HALF what it was 8 years ago in relation to the Euro.

So basically, Oil hasn't gone up, so much as the US dollar just buys a lot less of it than it used to.

Looks like I have answered my own question. My calculator isn't broken, The US dollar is.

 

[sause]

What your comparing the dolar value to was the strongest the dollar has been in the last 30 years. In the mid-90's you had the internet boom which powered the dollar to extremely high hights. Now in the late 90's internet buisness' crashed and the dollar broke down. So yes your math is correct but it has very little to do with who is in the presidential seat. BTW is was going down in '98 a year before the current pres. took over.

 

[homebrewer_99]

Good subject BTW.

The problem with the US dollar is that it is fiat currency. Fiat currency is any form of currency not backed by gold.

The US started falling (as in the "Fall of the Roman Empire" falling) back in the '20s when Congress and the President arranged to take the US off the gold standard and replaced gold with dollars. All the money the Gov't gets to pump up the economy is "borrowed" from the FED. The interest on this debt is passed on to you and me the taxpayers. We will never be able to pay this off.

JFK was assassinated because he wanted to get rid of the FED and return us back to a gold standard. Ron Paul wants to do the same.

The people who control all the money, credit, and politicians don't want this.

An exellent example of how politicians think was recently in the news...Hitlery Clinton's campaign was broke and $10 MILLION overspent...just try to imagine how she will run the country (if she wins) when she's starts playing with OUR money??

Too many politician's forget they are supposed to be working FOR us. Somehow it's just a statement that means nothing because the Roman Senate acted exactly the same way.

Want to locate a criminal? Just follow the money...

 

[MikeFlynn74]

$10 billion profit on $115 billion revenue

$10 Billion in profit they cant hide.

 

[MikeFlynn74]

JFK was assassinated because he wanted to get rid of the FED and return us back to a gold standard. Ron Paul wants to do the same.

That is out there- But not unbelieveable. We need to be returned to the gold standard. Not the we say so one.

 

[PeteOz77]

What your comparing the dolar value to was the strongest the dollar has been in the last 30 years. In the mid-90's you had the internet boom which powered the dollar to extremely high hights. Now in the late 90's internet buisness' crashed and the dollar broke down. So yes your math is correct but it has very little to do with who is in the presidential seat. BTW is was going down in '98 a year before the current pres. took over.

My research (It MUST be true if I found it on the internets eh?) shows that 2000 was the strongest the USD had been against theEuro, the Aussie Dollar and a LOT of others in a LONG LONG time. That same web site showed it at the lowest it has been in a LONG LONG time in Jan 2008.

All I am suggesting is that the US Dollar has plummeted drastically in the last 8 years. Blame it on the Government if you like, or blame it on someone/something else. I choose to blame it on the US government, as they have the greatest impact on the value of the US dollar.

This is NOT anti Amrican sentiment, I am a US citizen and spent the first 30 years of my life in USA. SO please take my comments as an observation of the world petroleum market, and nothing else.

 

[Chris_B]

I think the taxes paid is also effecting the result as well.

If the fuel tax down under works the way it does here, then it is a flat amount charged per volume - i.e. it isn't charged as a percentage of the underlying price.

Here, today I think I pay 38 cents/gallon in taxes and I think you stated it was 31 cents/liter there. So you are paying almost four time the taxes we are - and a greater percentage of each unit's price goes to taxes for you.

So as prices for the actual fuel rise, it is a bigger hit (percentage wise) for us since the actual fuel cost is a larger portion of the total cost per unit.

Does that make sense? Or should I have another of Biermuncher's OctoberFASTs until I don't have the ability to type any more? I am too far gone to enter the Excel world myself at this point!


To just add my 2 political commentary cents to this. It always bugs me when I hear people say that the U.S. has held their gasoline prices artificially low in relation to the rest of the world and that has contributed to our current oil gluttony.

While I agree that our low prices certainly have contributed to our over-reliance on oil relative to the rest of the world - prices are not held low here so much as they are being held artificially high in other places by the large tax burden placed on the fuels.

That taxing decision may well be a good idea, but I wish folks would describe it accurately.

 

[Philip1993]

I'm not sure where you heard that one. ExxonMobil set the all time record for revenue in a quarter by a US public corporation last winter. $10 billion profit on $115 billion revenue. The oil companies are cleaning up.

First, ignore the news hype about "record profits" and look at the actual financial statements. 10/115 is an 8.7% profit margin. Not exactly stellar...

Second, don't forget they paid $29.7billion in taxes last year but only made $18B in profit.

Third, research who the big shareholders are. You'll find 401ks, retirement fund, etc. That's right, when big oil makes records profits it's little guys who benefit

 

[kornkob]

First, ignore the news hype about "record profits" and look at the actual financial statements. 10/115 is an 8.7% profit margin. Not exactly stellar...

In fact, ignore almost every mention or 'record income' when it is related to dollar amounts whether it be a movie opening, fines paid, donations accepted or whatever it is. Those kinds of dramatic statemetns have no real reationship to reality and are a false 'record' since they don't take into account inflation.

 

[RICLARK]

How does who we have as a president effect Australia? Isn't Australia's money worth more than the American Dollar? America's oil Inflation rate is the lowest in the entire world. Please dont comment about the war here, there are a lot of troops that frequent this site and I dont think anyone should speak negativley about it. The other issues I could care less about Global warming, Global Cooling, Natural Disasters how bush caused hurricane Katrina whatever floats your boat, just not the war.

 

[Bobby_M]

Is that true? I can barely remember when gas was <$1 per gallon. Last I remeber that was prior to the Gulf War. And in today's dollar, I don't think it has been <$1 in the last 30+ years. And I think the second part is because the US dollar is weak ATM.

I know it's true. I ordered my Dakota pickup in Sept '99 and I remember trying to decide if I should get the free upgrade to a V8 or go V6 to save gas. The ultimate answer was "yeah, why not, gas is only 99 cents a gallon". Keep in mind, gas in NJ is some of the lowest in the country due to being close to ports and refineries. We're "ONLY" paying $3.35/gal for regular right now.

 

[Bobby_M]

$10 Billion in profit they cant hide.

I guess they were using the last 30 years as an introductory period just to get everyone hooked and now it's time to pull some profits. If people think it's unethical to make a profit, we've got some problems. I guess we're about to have another price gouging debate? hehe.

My dad is constantly complaining about how the price of just about everything is going up (surely a sign that you're getting old) but he also love playing around in the stock market. I'm like, how do you compartmentalize these two very mutually exclusive concepts?

Every time he comments on big oil profits, I ask him what profit margin he thinks would be completely ethical. For example, what if they operated as a completely regulated non profit business but it still cost $10 a gallon. Who would you complain about then?

 

[MikeFlynn74]

guess they were using the last 30 years as an introductory period just to get everyone hooked and now it's time to pull some profits. If people think it's unethical to make a profit, we've got some problems. I guess we're about to have another price gouging debate? hehe

Hate to tell you this... But when people working for the company are getting their salary doubled because they need the expenditure, there is something there. Profit or not there is some inventive math going on.

Besides oil prices are not set on supply/demand its purely speculation thats driving it right now.

 

[Klainmeister]

Errr, um, my friend here in Germany that I am working with is from Saudi Arabia--it's easy to sum up his family as RICH AS ****. So anyways, he's been telling me that all the major oil companies in Saudi Arabia rose their prices significantly over the last year to get as much money out of the plummeting dollar as possible while they all switch over to Euro's.

Needless to say, I told him he's an a**hole (jokingly with a hint a seriousness...they are trying to kill the dollar) and he said that's just the reality of the situation.

Now, in regards to the president, then you must raise an eye-brow, atleast for a moment, because the Bush family and their cronies are heavily tied with the Saudi oil barons. So, it begs to be asked if he had knowledge of their plan and so forth, and has the companies the Bush family have been tied to with stocks and money profited much the last year? I'm usually fairly politically neutral and don't like to get into these types of debate, especially since it's so 'chic' to bash Bush, but in all reality, this does make me think a little more critically about what's been going on behind closed doors.

 

[McKBrew]

It's all about what the consumer is willing to pay for gas and doesn't have jack to do with the price of oil or any of the other 50 excuses that we hear for why gas is so high. I read an article recently where a trucking company in one of the southern states took a large tank to Mexico and filled up with diesel fuel at just over $2.00 a gallon. The same fuel costs half as much in a lower income country, but since the average American can afford to pay $4 bucks a gallon for gas, that's what we'll be paying.

Eventually something is going to give. The cost of gas might only be a few more dollars a month if you average it out, but food prices are going up, airline ticket prices are going up, etc... and it's going to get to a point where some of us average folks are going to have a hard time doing anything more than the basics.

 

[kornkob]

How does who we have as a president effect Australia? Isn't Australia's money worth more than the American Dollar? America's oil Inflation rate is the lowest in the entire world. Please dont comment about the war here, there are a lot of troops that frequent this site and I dont think anyone should speak negativley about it. The other issues I could care less about Global warming, Global Cooling, Natural Disasters how bush caused hurricane Katrina whatever floats your boat, just not the war.

If today's soldiers have such fragile egos that someone speaking up with an opinion about the war would hurt their feelings, then maybe we need to rethink our training process.

If US soldiers still uphold the same beliefs that they did when I was a soldier then they not only welcome political debate but serve, in part, to protect political debate as an essential element of American ideals because lack of political debate, particularly about the employment of force, engenders facisim, which is the one thing that will really offend a soldier.

So I say: speak up if you have an opinion, so long as the mdoerators don't have a problem with political discussion (seeing as they tend to not mind so long as people act like adults) go ahead and speak about your opinions of the war or any other topic.

 

[Sea]

If today's soldiers have such fragile egos that someone speaking up with an opinion about the war would hurt their feelings, then maybe we need to rethink our training process.

If US soldiers still uphold the same beliefs that they did when I was a soldier then they not only welcome political debate but serve, in part, to protect political debate as an essential element of American ideals because lack of political debate, particularly about the employment of force, engenders facisim, which is the one thing that will really offend a soldier.

So I say: speak up if you have an opinion, so long as the mdoerators don't have a problem with political discussion (seeing as they tend to not mind so long as people act like adults) go ahead and speak about your opinions of the war or any other topic.

Well Said! What if anything are we fighting for but the right to disagree? It's why our country exists.

 

[MikeFlynn74]

If US soldiers still uphold the same beliefs that they did when I was a soldier then they not only welcome political debate but serve, in part, to protect political debate as an essential element of American ideals because lack of political debate, particularly about the employment of force, engenders facisim, which is the one thing that will really offend a soldier

Well I for one believe the Iraq war is a prelude to the war with Iran. Now that we have forces on either side of Iran.....

I think we should have finished what we were doing in Afghanistan before doing anything else