Where gasoline is cheap, and why it's making yours pricey

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Rodger Tellefson

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Where gasoline is cheap, and why it's making yours pricey

Friday May 4, 3:12 pm ET



By Steve Hargreaves, CNNMoney.com staff writer



In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it's 33. Venezuelans pay under a quarter.

These absurdly low prices are a direct result of massive government subsidies.



While these numbers are not adjusted for cost of living, it's fair to say that drivers in those countries are getting a good deal.



Here's the link to the rest of the story:
 
Rodger,



I'd like to see an article on commodities speculators tied to the industry--i.e., the predictions of $4/gallon gas. I don't remember much about psychology, but it reminds me of a self-fulfilling prophecy. If we announce it will happen, we can later do it, and then I said I told you so. A hybrid econobox looks more and more appealing each day with this.
 
I'd rather be in the good old USA and paying $3 a gallon then be in Saudi Arabia, Venezuela or Iran. :rolleyes:
 
Adam,



How true that is. Get the movie and book "The Secret" which talk about the Spiritual Law of Attraction and use it for your own self-fulfilling prophecy to earn more money to pay for the gas.



TomT,



I couldn't agree with you more. Amen to that.
 
Amen Tom T...



I finally filled with E85 today. When it first showed up around 3-4 months ago. it was $.60 cheaper per gallon. Went to around $.20 per gallon cheaper and is now $2.49 cs $2.97 for regular unleaded, so about $.50 cheaper.



From what I have read and from what I have heard, I don't believe the E85 is any "greener" than the regular, nor do I expect to get the same MPG out of the E85 vs regular. I did so trying to avoid the "sticker shock" of a full tank of reguler compared to the regular.



Guess what? It worked...Even though the $, the bogus eco savings and loss of MPG are real, maybe, just maybe this will be the shove to get us all away from 100% oil based petrol. Money does talk!!!!



BWDIK???????
 
Just maybe this will be the shove to get us all away from 100% oil based petrol. Money does talk!!!!
Click to expand...



Do you realize how much conventional oil is used in the production of E85, from the fertilizers in the field to the farm equipment to the production of the E85?
 
Do you realize how much conventional oil is used in the production of E85, from the fertilizers in the field to the farm equipment to the production of the E85?
Click to expand...



Do you realize how much conventional oil is used in the production of regular gasoline? From the tanker to haul it half way around the earth, to the electricity and fuel used by the refinery, to the fuel and energy used to construct the thousands and thousands miles of pipelines that deliver it to the center of the country? Not to mention the environmental impacts where the terminals are located to load the ocean tankers when a 'little bit' is spilled while connecting and disconnecting the mammoth hoses and the occasional mishap where the tanker runs aground and spills thousands of barrels of oil. Ask the locals of Prince William Sound if things are back to 'normal' since the Exxon Valdez spill nearly 20 years ago.



The corn is grown in the heartland of the US and turned into ethanol very near where it's grown. Seems like it would use far less fuel to do that than haul it around the world. The fuel and fertilizer being used on the corn for ethanol is used regardless whether the corn is used for feed or ethanol and the solid byproducts of ethanol production are still used as feed for livestock. As far as ethanol 'mishaps', I'd venture to guess it has far less impact as it is soluble in water and evaporates very quickly as it is alcohol.



No, I'm not a tree hugger, but Olaf's argument doesn't make too much sense to me. :blink:
 
Last edited by a moderator:
As a person with a Logistics degree, I just want to throw out another component of fuel pricing: trasnportation to market. They don't have to pay to put it on a tanker to get it to their refineries. Transport costs for fuel account for around 9% to 12% of the price at the market/pump.
 
Well for my little rant... its all corrupt and the main reason for the increase is damn politicians and who want money and power. Its either we accept it and go with the flow because our society seems too powerless to do anything (may i remind those who are americans that this country is derived from a society seceding from a group to do what they felt was humanitary) or we can always kick every selfish S.O.B. out of office and get some people who actually care about humanity and are willing to negotiate with the oil companies and foreign nations in order to keep the oil prices inbalance along with funding for more fuel efficient vehicles to be used (its not wimpy…recently on mtv’s pimp my ride they were able to create 800hp out of a hybrid muscle car, sure it sounds like a qwuirky reference but its still valid.) rather than trying to make that extra shiny penny. I don’t know about you, or anyone else but politics is more corrupt than anything I’ve ever heard of. Its sad that the U.S. government isn’t willing to waste the natural resources we have here aka. Alaska which has many resources plundering within in order to produce fuel. Scientists are able to do it but where there's a will there's a price, they need the fundings in order to find new and improved ways of mechanical combustion in order to conserve energy, fuel, and our environment. Global warming isn’t getting better and heaven forbid the hipocrits (Hillary Clinton and other candidates) in and running for office are telling each of us to stop driving and stop using fuels to prevent global warming and to conserve our resources while they go to their press conference in their lear jet that burns more fuel in a week than my car does in a year and get in their convoys to drive to a speech which burns fuel in order to keep them warm and comfortable. What a bunch of lying sack of hormones… This whole problem evolves around money and power. Shame on them and let God judge them in the last days accordingly. I'm not a tree-hugger but I get sick of politics sometimes... makes me feel like I should just go take a dump. Well there's my rant. Enjoy. :blink:
 
Gene and Scott-SVT, regarding your comments about the tankers hauling oil half way around the world--Do you know what country provides more of our oil than any other country?



USA! We produce about 40% of the oil we use.



Any guesses to who's second and third?



Saudi Arabia? Nope.



Kuwait? Not even in the top 5.



Venezuela? Still wrong.



#2 is--Canada! Closely followed by #3--Mexico. Those two combine to provide about 35% of our oil. That's right--over three fourths of our oil comes from North America! But the rest is all from the Middle East, right? No--#4 is Venezuela, and although Saudi Arabia is #5, we actually get as much of our oil from Africa as we do from all the Middle East put together.



If you know this already, great--more power to you. But I think you can agree that a LOT of Americans are under the misperception that the majority of our oil comes from the Middle East, and your comments seem to suggest you are in that group...
 
I wasn't aware of that Bill. However, 60% of our oil is still 'foreign'. Granted, if it comes from Canada or Mexico, it's not shipped half way around the world, but it is still being transported to the refineries via tankers or pipelines of some sort.



It's still my belief (however misguided it might be until I see evidence one way or the other) that ethanol production has a much smaller environmental footprint than the transport and refining of fossil fuels.
 
I knew those numbers actually. Quite a funny trivia question actually. Even funnier that Mexico is second as far as imports go, but most people forget about that big body of water called the Gulf of Mexico. Russia is quickly catching and surpassing the others below Mexico. I have looked most of this up for a class a couple of years ago. However, the oil still must be transported via tanker or pipeline to get to our refineries, which accounts for at least a tenth of the cost.
 
I read somewhere that although gas may be vastly cheaper eslewhere, the lines can be so long that it'll take an hour to get to the pump!
 
Our cheaply priced goodies from China raise our fuel prices and the tree huggers do too.



Who wants a refinery next to their house? Why is our gas so expensive? We do not have the refining capibility to keep up with demand.



Who wants a refinery next to their house? We want refineries built, but where. Nobody wants it near them.



I used to work in many petroleum and chemical facilities. They are nasty and dangerous places. The polute the ground like you can not imagine. They have Hydroflouric acid...nasty stuff. Hydrogen Sulfide...DEADLY in small doses. They can have explosions with no warning. Chemical releases are quite common. I can not tell you how many times I have goten sick with Chemical Bronchitis.



We want cheap fuel, but we do not want the facilities near us to make them.



The EPA makes it hard for a company to build a refinery and it takes years to build. There are thousands of miles of piping, rail car support, storage tanks that will store 1 million gallons of fuel and oil, along with bi-products that must be disposed of.



Even the small Marathon/Ashland refinery in Canton, Ohio is a disaster waiting to happen.



That is the petroleum industry.



Who wants a refinery in their back yard?





Tom
 
As long as it pumps race gas too, they can put one at my house as well (the cows across the street won't mind)....
 
The state and Federal governments get a lot more money from each gallon of gas than the oil companies do.
 
FYI--Ethanol needs to be transported too. It doesn't get from the fields to the production facilities to the stations by magic.



Caymen, interesting that you should comment about the refinery shortage. There was an interesting story about it on the local news last night...
 
Bill V,



I did know about the other point made. Why make more gas and end up lowering the price of gas so essentially you make less money per gallon?



As it also said, finding land is hard because nobody want a refinery next to them.



Price to build a refinery is astronomical and to top it off, the ongoing support to keep it running is stagering.



For example, the company I used to work for had a contract with one refinery. We were one of 6 NDE labs working out of that place. Our gross income from that one refinery was over $250,000.00/year. We were one of 6 NDE labs there and we had the smallest crew there and we were only there for about a total of 4 months a year. Construction crews are in there almost every day. These are not employees of the refinery, but outside contractors. Turn ARounds, TAR's, usually take 2 to 3 weeks to happen and employ hundreds and sometimes thousands of people to make it happen. Crane rentals, injuries, and some must other things cost bundles.



I do somewhat understand what it takes to make gas. Though I don't completely understand it, I know the miles and miles of piping it goes through just to be refined through many processes before the fuel is filtered, filtered, filtered, blended, filtered, etc. before it is even ready to go in our vehicles.



...and dealing with security issues is a whole other topic.





Tom
 

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