House OKs measure to suspend gas tax

[Txbroadcaster]

The Texas House tentatively adopted a measure Tuesday that would suspend the state's 20-cent gas tax through the summer months. That would mean an immediate 20-cent drop in the price per gallon.

[Adidas410s]

we'll have to wait and see if this holds up or not...

[Adidas410s]

The House, which approved the bill by a 118-16 vote, is expected to give final approval to the measure Thursday. But its future in the Senate is uncertain.

Rich Parsons, a spokesman for Lt. Gov. David Dewhurst, said the Senate likely will want to closely examine the budgetary implications of suspending the tax.

If the Senate does not accept the House's version of the bill, members of each chamber would be appointed to a conference committee to negotiate a compromise.

If the amendment stays in the bill and Perry signs it into law, the tax relief would take immediate effect and be good for 90 days. That would cover most of the typically high-priced summer driving period, Martinez Fischer said.

[shankbear]

The state tax is 20 cents per gallon and the federal tax is 57 cents per gallon. The oil companies make a profit of 7 to 8 cents per gallon. Who is in the best position to give consumers a break?

[dogdad]

so if the oil companies make 7-8 cents profit with gas at $2.89, they must have been losing their butts a few months ago when gas was selling for about $2 a gallon. I didn't realize the sacrifices they were making.

[shankbear]

Their volume is why their profits are incredible. That margin has remained constant for quite a while.

[Buccaneer]

The 7-8cents margin I believe you are talking about is the gas stations' operators.

[shankbear]

Nope. The big boys operate actually on a margin of 7 to 10 cents profit per gallon. Google it. Phil's fat cats get fat on small bites of a lot of pies. The main cost of a gallon of gas is the crude. Then taxes. Then refining. Then profit. Taxes and refining run neck and neck.

[dogdad]

I think you're right Buc

the oil companies are making a killing

[Snyder_TigerFan]

Originally posted by dogdad
I think you're right Buc

the oil companies are making a killing

I'm confused....the oil companies are makeing a 7-10 cent per gallon profit, the texas government is make a 20 cent per gallon profit, and the federal government is making a 57 cent profit per gallon and the oil companies are the ones making a killing???

[dogdad]

how much did Exxon make last year?
compare that to their profits from 5 yrs. ago and 10 yrs. ago
now tell me they make a flat 7 cent profit that remains constant

I'm not that naive, are you?

[Buccaneer]

The Federal Government gas tax is 18.4 cents on gasoline.

[Pudlugger]

Originally posted by dogdad
how much did Exxon make last year?
compare that to their profits from 5 yrs. ago and 10 yrs. ago
now tell me they make a flat 7 cent profit that remains constant

I'm not that naive, are you?

The 7 cents is the profit margin for refining the crude. Exxon is making the big profit from its wells now that oil is over $60 a barrel. Exxon and other big oil companies own reserves. When oil is up they make money but when it is down well they make much less. They have to average costs of exploration and production over time so even though they are making record profits now they will need to cover costs latter if the market collapses as it has done repeatedly in the past. If OPEC opens up the spigot and the Middle East stabilizes look for oil at around $30 a barrel in a year or two. Gas would stabilize at around $2 a gallon if that happens.

[dogdad]

Pudlugger, I have no problem with companies making profit and I realize that exploration costs must come from profits. I think your explanation sounds reasonable. I just can't sit by when someone tries to say that oil companies profits are constantly at 7 cents. Exxon made more money last year than any corporation has ever made in the history of the world. They are swimming in cash. But I do hope that oil comes back to $30.

[Buccaneer]

A multitude of factors can affect an individual oil company's profit on gasoline sales. However, data from the U.S. Energy Information Administration (EIA) indicates that when the average price of unleaded regular peaked at about $3 a gallon in the middle of 2006, major companies were making a profit of about 10 cents a gallon on their U.S. refining and marketing operations. Profitability factors include the efficiency of the firm's refining, distribution and marketing system, as well as its source of raw material. In times of rising oil prices, companies that own and produce a considerable portion of the crude oil used in their refineries may benefit more than other companies that must purchase most or all of their supplies on the open market.

[Pudlugger]

Originally posted by dogdad
Pudlugger, I have no problem with companies making profit and I realize that exploration costs must come from profits. I think your explanation sounds reasonable. I just can't sit by when someone tries to say that oil companies profits are constantly at 7 cents. Exxon made more money last year than any corporation has ever made in the history of the world. They are swimming in cash. But I do hope that oil comes back to $30.

Oil production is a good business now and Exxon is one of the best companies in the industry and we Americans own it. Look at Venezuela and that corndog Hugo Chavez and ask yourself whether we are better off with Exxon with its millions of stockholders or some dictator nationalizing oil and blowing the profits on guns and palaces. I don't like paying 3 bucks a gallon either but we have had it good. Europeans with their socialist economies have been paying the equivalent of 5 bucks a gallon since the early 90s. Do like I did and adapt. I bought my wife a diesel Jetta and then another one for my son upon graduation from college. They are both getting 45 miles to the gallon and the cost of service is a fraction of what they were paying before with their old cars.

[JR2004]

Federal Government, State Government, Oil Companies, it doesn't matter. They're all screwing over the consumer on this one.

[BILLYFRED0000]

Originally posted by dogdad
so if the oil companies make 7-8 cents profit with gas at $2.89, they must have been losing their butts a few months ago when gas was selling for about $2 a gallon. I didn't realize the sacrifices they were making.

No the oil companies protect their dime in all price structures. What drives price is supply and demand. Supply as in we have no refineries built in 32 years so it stays tight particularly if the refineries we do have are having repair issue because they are old technology with new mixed in. The patch on the patch is just barely holding. Demand as in how many more cars and brands of unleaded gas are now required that were not in the 70's.