Joe Biden and Gas Prices

By: Mike Barnhill

You’ll be able to tell if the current rise in fuel prices are due to the conflict in Ukraine and our lack of energy independence when the earning statements of the oil companies come out. The oil companies are making an absolute fortune right now. Just do the math – a barrel of crude (highest quality) currently costs around $120 (lower grade crudes which they also use are around $50-75 a barrel. There are 42 gallons in a barrel. Refining costs vary of course but figure .75 cents a gallon for gasoline and .50 for diesel. Distribution and marketing costs around .30 cents and diesel around .50 cents because it’s heavier. The first few years I worked for Mobil the gas prices were pretty much the same through whatever city I happened to be living. As desktop computers became more common they began what was called ‘spot pricing’. Essentially what that means is they price the gas at every station at the level they believe people will pay. Jim (and me! as well as MANY others) stop for gas when they need it and don’t pay a lot of attention to the price. Fortunately my wife is price conscious. She goes to Costco for groceries, etc. about every two weeks and she fills up the car there. Their prices are usually 25 to 50 cents cheaper than the company stations. You think Costco is losing money on each gallon? Of course not!

See more in this weeks Boone County Journal