Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Gas Will Stay Aout Where It Is Now. Somewhere Between $2 and $2.50
5%
[ 4 ]
Modest Increase. Between $2.50 and $3.
25%
[ 19 ]
Big Increase But No New Record. Gas $3 to $3.50
40%
[ 30 ]
New Record! Gas between $3.50 and $5.
27%
[ 20 ]
Oil Madness! Gas goes to $5 and Beyond.
1%
[ 1 ]
Total Votes : 74
Author
Message
jake Tar Sands
Joined: May 21, 2004 Posts: 74
Posted: Tue Jun 01, 2004 4:42 am Post subject: THE Gasoline Price Thread (merged)
Its all very well and good hearing that a barrel of crude oil is at $40 or whatever, but I thought I'd do some calculations to help understand wht that means, specifically the differences between the UK and US.
In the UK, we buy petrol (which for some bizarre reason US residents call 'gas' even though its a liquid?!) by the litre. At my local Texaco garage, petrol costs 83.9p per litre. Two weeks ago, it cost 81.9p. I remember about 10 years ago seeing prices of around 50p.
In the US, 'gas' is bought per gallon. Apparently the average price is currently $2.04. link
Governments impose a special 'duty' on petrol/gas due to its externalities - basically because its so horrible to the environment, and also to make lots of money. In the UK, we have extremely high duty. In the March 2004 budget, duty was raised to 49p per litre. So, for an 83.9p litre of petrol, 49p of that goes to the Government, leaving only 34.9p to buy the oil and pay wages, expenditure etc. link
In the US, duty is - or at least I thought it was - far lower, which would partly explain why the UK generally has more fuel efficient cars and is less reliant on oil, and hence will fair better when there is a supply shortage. I can't find figures for US gas duty though - can anyone help out here? Also, what about other countries?
Right, now to compare:
In my pocket diary it says that one gallon is equal to 4.5461 litres. But it also says 1 US gallon is equal to 0.8327 UK gallons, which is 3.7854 litres. Does anyone know which is correct here? I'll presume the 4.5461 figure. One UK£ will currently buy 1.84 US$. So, my 83.9p/litre petrol is the same as gas in the US at $2.07. OK... I wasn't expecting that at all. I was expecting the cost in the UK to be far higher, more like around $3.
Can anyone help out here, or offer some other interesting calculations, perhaps directly relating to the cost of a barrel of oil?
Also, you'll often hear "a barrel of oil costs $x". But that's really just a simplification. Firstly, note that the cost is in $, and over the past year or so the value of the $ has fallen significantly compared to other currencies. Its quite possible that in the future the euro will be used to trade oil instead, and that would be a tremendous blow to the US economy, resulting in further decreases in the value of the $. There are several dfferent oil markets around the world. The IPE (international petroleum exchange - link in London and Nymex (New York Merchantile Exchange -link in NY are the two most important. The cost of oil at both is different. At the moment, Nymex crude is trading at $40.93 whilst IPE crude is at $38.05. But you can't just go along and say "I'll have a barrel of your best please, here's my $38.05" and walk out the door with a barrel. Orders are made to a minimum of 1,000 barrels, paid for a month before their delivery. This gives rise to the 'oil futures market' where traders buy and sell oil a month before its due, helping manage price risk.
Joined: May 23, 2004 Posts: 276 Location: Melbourne, Australia
Posted: Tue Jun 01, 2004 4:59 am Post subject: Re: Price of Petrol/Gas Calculations - Litres, Gallons, US$,
jake wrote:
In the US, duty is - or at least I thought it was - far lower, which would partly explain why the UK generally has more fuel efficient cars and is less reliant on oil, and hence will fair better when there is a supply shortage.
That may be overconfident. If dependence in terms of day to day living is similar, but you use less now, a supply shortage of magnitude x will be propotionally worse in a country that's more efficient but still dependent than in a country that is gluttonous but equally dependent.
Of course, this is pretty minor, since both will go down, it's just a matter of time.
jake wrote:
I can't find figures for US gas duty though - can anyone help out here?
You're not going to have much luck. There are hundreds of different counties, each with their own fuel blend standards and their own taxation arrangements. Pick a few.
jake wrote:
Also, what about other countries?
A breakdown in Australia that was calculated a year ago is as follows:
Refinery 34.3 cents
Federal Government excise 37.7 cents
GST 7.8 cents
Freight 0.6 cents
Wholesaler costs and profit 0.9 cents
Retailer/dist costs and profit 4.3 cents
Retail price 85.6 cents
Of course, retail is now 98 to 106 cents.
The excise is still the same (it's a tax levied by the litre, and is no longer indexed to inflation), freight would be up slightly, GST is 10% on top of what would otherwise be the retail price (i.e. 1/11th of the actual retail price)
jake wrote:
In my pocket diary it says that one gallon is equal to 4.5461 litres. But it also says 1 US gallon is equal to 0.8327 UK gallons, which is 3.7854 litres. Does anyone know which is correct here?
They use US gallons in the US. You'll need to recalculate.
jake wrote:
Also, you'll often hear "a barrel of oil costs $x". But that's really just a simplification.
Yes, there are different markets, and different kinds of oil. They use a benchmark, of a specific kind of light sweet crude. Different refineries are prepared to pay different prices based on the exact kind of crude, where it is, what the delivery date is, and many many other factors.
However, they all have their banchmarks which they use to figure out if they're getting a good deal or not. _________________ The purpose of human life revolves around an endless need to extract ever increasing amounts of carbon out of the ground and then release it into the atmosphere.
Joined: May 17, 2004 Posts: 1969 Location: Democratic People's Republic of Washington
Posted: Tue Jun 01, 2004 6:08 am Post subject: Re: Price of Petrol/Gas Calculations - Li, Gallons, US$, UK£
Jake wrote:
Its all very well and good hearing that a barrel of crude oil is at $40 or whatever, but I thought I'd do some calculations to help understand what that means, specifically the differences between the UK and US. ... There are 42 gallons to 1 barrel.A good place to get the latest oil prices is here -link
The correct conversion rate from US Gallons to Liters is 3.7854118 liters. Given this factor, and the current conversion rate from Pounds Sterling to US Dollars is 0.5458£/$1.00, and using your current rate of 83.9p/l, your price per gallon would be £3.1759605 per US gallon, and converted to US dollars you are paying 45.79994322772231 cents per liter, which would equal 25.001606670591025p per liter.
Using the math to prove it, UK citizens actually pay a higher rate for gasoline than US citizens do. I am paying almost fifty cents more than that. Since my price is $2.269 per gal, this would be equivalent to me paying 59.9406381 cents per liter, which would be 32.72083220516626p per liter. This means that you pay 29.2204474 cents more per gallon of gasoline than I do, which is about the difference betweenthe price I pay, and Seattle's average. _________________ Here Lies the United States Of America.
Joined: May 21, 2004 Posts: 158 Location: Melbourne, Australia
Posted: Tue Jun 01, 2004 7:46 am Post subject: Re: Price of Petrol/Gas Calculations - Litres, Gallons, US$,
jake wrote:
In the UK, we buy petrol (which for some bizarre reason US residents call 'gas' even though its a liquid?!) by the litre.
Short for 'gasoline'. In Australia we call it petrol too, and buy it by the litre.
A litre is about 4 gallons
Quote:
At my local Texaco garage, petrol costs 83.9p per litre. Two weeks ago, it cost 81.9p. I remember about 10 years ago seeing prices of around 50p.
In Australian cities, petrol is about $1 a litre at the moment. In country areas it's generally 10% or so dearer.
Quote:
In my pocket diary it says that one gallon is equal to 4.5461 litres. But it also says 1 US gallon is equal to 0.8327 UK gallons, which is 3.7854 litres. Does anyone know which is correct here? I'll presume the 4.5461 figure. One UK£ will currently buy 1.84 US$. So, my 83.9p/litre petrol is the same as gas in the US at $2.07. OK... I wasn't expecting that at all. I was expecting the cost in the UK to be far higher, more like around $3.
That can't be right. Lets see. At 83p per litre, a gallon of petrol in the UK would cost you about 3.5 pounds, which is close to six American dollars.
In Australia, a gallon would cost $4 - $4.50 AUD, or around three American dollars.
Of course, I haven't adjusted for incomes or the cost of living generally.
Which shows that Americans who whine about petrol prices don't know they're alive.
Quote:
Can anyone help out here, or offer some other interesting calculations, perhaps directly relating to the cost of a barrel of oil?
Rule of thumb here in Australia is that a $1 US rise in price of oil puts petrol prices up 1c/ltr.
In Denmark we currently have:
- 160% tax on new cars + annual tax per car is around $700
- 1 euro liter gas is $1.50 (the same as 1 us gallon gas is $5.67)
- 1 euro liter oil for heating is $1.06 (the same as 1 us gallon oil for heating is $4.00)
- 25% sales tax
- 45% income tax (varies based on income)
- green taxes, which are billed direct on your usage is currently 10-15% of income for the goverment, but since they are billed in specific areas suchs as electricity, then people see a 250% tax on their electricity bill, which reminds them to save on energy, so they can save money.
The above have pushed the sociaty to have less energy consumption, and actual we have seen growth in the economy with 150% since the start of the 80s, but without using more energy, because high taxes have made conservation into good business for normal people and corporations.
Wow ridiculus taxation. And people complain when mobsters want 10% of your profit for protection! You are paying 95% at least Lol!
Maybe your governmnet works better then ours here in Canada though. We never see a dime of what we send in. Every time I have gone to get 'free' healthcare they have made excuses of why I'm not elligble, same with welfare, and student loans. You never can 'quite' qualify. Just needed a few more forms they didn't tell you about and you would have had a chance!
Meanwhile people connected to the government with massive contracts add up their billions! When the crash happens my militia will be ready and we will physically take back what was stolen, and then some extra because I'm mean:)!
The income tax is based on how much you earn - in a progressive system... so we have a free income with no tax if we earn below $7000/year, above $7000 we are taxed at the minimum tax rate, and then it continues to rise based on the more we make. But that is just income tax - all the other taxes are for everyone - no matter income, so ex. the green tax is very good at controlling the usage of the people... ex. water is so expensive, that if your toilet is running, then it could easily cost you $2000-XXXXX per year, so people are very aware on wasteful things/actions.
However that said, then its true we pay alot of tax - personaly I pay close to 80% in tax, when income, sales tax, green tax etc. is counted together. But we are one of the richest nations in the world messured on GDP per capita, and we do get free helthcare, free education with economic help to students ($250-850/month), high unemployment help ($1400-2200/month) etc. and we have realtive low crime rate.
I have used helthcare, and my education was also free, but beside that, then I haven´t used the welfear system, but friends of mine have used it, when they have lost their jobs, and needed money for housing/food etc.
Posted: Wed Jun 02, 2004 5:10 am Post subject: corrections
Just to correct my original calculations.
I worked out that my 83.9p petrol was the same as $2.07 gas in the US. I was stupid. I had a figure at £3.68 after the litre/gallon calculation, and then figured it *obviously* wouldn't be MORE than $3.68 so I divided it by 1.78. I should, of course though, have multiplied, giving a much higher figure. So my calculations again, using the correct gallons-litre ration too:
83.9p x 3.7854 (litres per US gallon)
= £3.18 per US gallon
x 1.82 (current exchange rate UKP to USD)
= $5.78
So actually then, petrol in the US is about 3x as expensive as in the UK, mainly due to our taxation. I'm very happy to live in a country where fuel tax is so high (I'm NOT being sarcastic btw), and strongly hope fuel protests link don't have any impact, except perhaps to finally highlight the peak oil situation to the mainstream public. _________________ Contact me at http://www.jakeg.co.uk/contact/
Read my peak oil dissertation at http://www.jakeg.co.uk/dissertation/
Joined: May 21, 2004 Posts: 158 Location: Melbourne, Australia
Posted: Wed Jun 02, 2004 9:57 pm Post subject: Re: corrections
jake wrote:
mainly due to our taxation. I'm very happy to live in a country where fuel tax is so high (I'm NOT being sarcastic btw), and strongly hope fuel protests link don't have any impact, except perhaps to finally highlight the peak oil situation to the mainstream public.
More to the point, the UK and Europe, and to a lesser extent Australia, have not suffered economically by having fuel significantly more expensive than the US.
Posted: Mon Jun 14, 2004 4:11 pm Post subject: THE Gas Price Thread (merged)
link Chomsky writes:
Regarding the rising price of oil, the first point to remember is that the price of oil is not high by historical standards.
I haven't seen an exact calculation, but I wouldn't be surprised if the real price per barrel is maybe half of what it was during the 1970s peak -- which itself brought oil to the level of other commodities, tracing from the end of the World War. The oil price had been kept artificially low until the mid-1970s quadrupling of price -- which followed a far higher increase in the price of US-produced coal and of US agribusiness products, and was not opposed by the US or the energy corporations for pretty good reasons. Oil and "gas at the pump prices" now are given without adjustment for inflation, which is almost meaningless.
I'm frankly skeptical about the theory you report. I suspect that the oil ministers and analysts are accurate in saying that maybe 1/5 of the price is traceable to investor concerns about security, stemming from the US invasion of Iraq, US support for Israeli expansion into the occupied territories, and al-Qaeda-style attacks on the Saudi monarchy and its whole system. And the rest is easily attributed to normal factors.
It might also be worth noting that there would be great advantages to a much higher price. In our more or less insane quasi-market system, the only means of something like rational planning is market forces. So a very badly needed shift to a sustainable economy cannot be undertaken unless driven by much higher prices. And the problems ahead from irrational use of hydrocarbons might turn out to be extremely severe.
Joined: Apr 04, 2004 Posts: 579 Location: Western US
Posted: Thu Jun 17, 2004 12:34 am Post subject:
Funny. Amazon sells one of his books as a package deal with Oil Power Empire, the author of which is well aware of peak oil though he only mentions it in passing as of chapter ten.
Posted: Thu Jun 17, 2004 11:53 am Post subject: Historical Gas Prices
I just had to comment on this. Several other posts on this board keep referring to "oil and/or gasoline prices not being close to a historical high".
Well, I am not inclined to agree with this statement, at least as it applies to the US, if you look at this issue from the standpoint of somebody making minimum wage.
If you look at your government's data on fuel prices and figure out how many gallons a minimum wage worker can buy with one hours' work, you get the following little chart:
Min Wage Gas Price Gallons/Hr
1967 1.00 0.33 3.03
1974 1.90 0.53 3.58
1981 3.10 1.35 2.30
1998 5.15 1.12 4.60
2004 5.15 2.05 2.51
Record 5.15 2.27 2.3
In 1967, which is as far back as I felt like going, the proverbial minimum wage worker was making a buck an hour, and could afford 3 gallons of gas with his hours' work.
In 1974 when the oil price was all screwed up, gas price doubled, but minimum wage had also almost doubled, so the "little guy" was still okay. He could actually buy more gas with his $1.90 per hour than he could in 1967.
The "bad old days" for Joe Lunchbucket occurred in 1981. Due to the effects of the Iran deal, he could only buy 2.3 gallons of gas for his hours' hard work.
Recently, in 1998, it was the "good old days", due to the combination of cheap gas and a rising minimum wage.
Look now, however. Due to stagnant minimum wage, and rip roaring price of gas, the ratio has shrunk to only about 2.5, very near the all-time low level, that is to say, if you are a minimum wage worker, it is very nearly as bad as it was in 1981. If the price of gas reaches $2.27, which it is out in CA and other places, you are actually just as bad off as in 1981.
Now of course, you can hedge on this some. For one thing, cars are slightly more efficient now compared to 1981, and maybe you should be looking at average income rather than min wage.
But if you are a joe schmoe, it is you who are suffering the most because of this. link
Posted: Fri Aug 13, 2004 5:35 pm Post subject: Explanation of gas prices from howstuffworks.com
link
Interesting. Gas prices, inflation adjusted, were $2.59/gal in 1980. I pay in that range now in SoCal. I've paid $2.35 a gal for a while now, although I filled up yesterday for $2.01 at the Arco around the corner from me.
Posted: Fri Aug 13, 2004 8:42 pm Post subject: Re: Explanation of gas prices from howstuffworks.com
Ayoob wrote:
http://money.howstuffworks.com/gas-price1.htm
Interesting. Gas prices, inflation adjusted, were $2.59/gal in 1980. I pay in that range now in SoCal. I've paid $2.35 a gal for a while now, although I filled up yesterday for $2.01 at the Arco around the corner from me.
I wouldn't take this number very seriously. There are at least five different acceptable ways for an economist to adjust for inflation and all of them will produce a different answer. At best it's a rough guide. Despite the precision of $2.59 a gallon, you can't take it to the bank.
It is fair to say gas prices were highest in 1980 and 1981. They were the lowest in 1998 and 1999. How much higher or lower? That's a lot less clear.
Here's an explanation.
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