What SHOULD Gas Cost Per Gallon? Really...?

Question

Ok, I don't like the current prices either!

But to be perfectly honest looking at it impartially they do seem about right. Consider the following:

1. Oil is a finite resource. There is less oil on earth today than at any point in human history, and there will be even less tomorrow.

2. Demand is going UP, with China and India taking a larger share.

3. The oil we do have left is harder to get at, and is lower quality (requiring more refining).

Now granted the oil companies are making WAAAAY too much money, and something needs to be done about that! But if gas were about $3.50 a gallon with less of it going to oil company profits and more going into stuff like

- Fixing our crumbling roads and bridges

- Exploration for new oil sources

- Improvements and expansion of refining capabilities.

- New technologies to replace oil. (it will, after all, be gone eventually)

I think that would be fair.

What do you think it SHOULD cost and why?

Answer 1

M8 try coming to the UK. We get charged about £1.25 for 1Litre! Thats like £4.70/gallon. That's about $9/gallon. About 67% of that is tax!

Answer 2

I think profits make sense in the oil industry.  Profits in the economic sense.  In a normal market, and oil is abnormal, profit leads to entry.  Entry increases supply and decreases price until the point where p=mc.  But, there is not enough entry so supply is deficient.  The price seems right to me.  If it is too high, entry should happen.  If it is too low, exit should happen.  This is the theory, and it is logical.

Answer 3

every gallon of gasoline sold in the u.s. earns $1.00 in pure profit. a less greedy system should cause the price of gas fall by at least 25% and the manufacturers STILL make a profit. america is getting ripped off!-blurey

Answer 4

Solution to the dilemma - We are in a position to adapt to the situation at hand, gas and oil are a finite resource and treated as such can reduce our dependency on it .

Tax increment fuel as to show alternative fuel and hybrid and Electric vehicular favorable as compared to conventional unleaded and diesel fuel vehicles.

If cost becomes exuberant than tax credit incentives of conservation as to reduce consumption should be introduced!

by doing this we may invert a depression thru conservation and rewarding those who help conserve these resources as to keep the art of transportation conservatively and economically feasible into the near future,

Answer 5

Between $3-$4 is about right, if you consider the rate that other goods have increases over the years.  Everyone blames the oil companies, but there are 5 other business groups which have a higher percentage of profit.

Most oil companies LOSE one cent on every gallon of gasoline they sell.  They do make a profit of over 20 cents on every gallon of diesel fuel, however.

People criticize Exxon-Mobil for their huge income;  well, they are the world's largest corporation!

Wouldn't you expect a huge super market to make more money than the little food market on the corner?

Americans are spoiled, and don't want to sacrifice in any way.

These complainers should move to Europe and start paying up to $9 a gallon.