What are you Paying for Gasoline? Petrol Prices Around the World

[Bill Pflanz]

I was told yesterday that some oil analyst said that oil will be around $45 for a 55gal. drum by the end of next year. Keep fingers crossed. They tell you that most of the cost of oil is in the refinery process. My question is why is gas 38 cents a gallon in Iraq when supposedly they have no refineries? Any oil people in the cove??

I wouldn't pay much attention to an "oil analyst" who is quoting oil prices for a 55 gallon drum. Oil is priced by the barrel and by definition a barrel is equal to 42 gallons. The current price is around $70 per barrel which is obviously higher than the analyst's prediction.

I think you may have misquoted about the cost of oil when you were really talking about the cost of making gasoline. The cost of the crude oil is about 50% of the cost of gasoline. The cost of the refinery process is about 15% of the cost of gasoline. The rest is taxes, distribution costs and profit with takes being most of the rest.

Iraq has refineries but they were damaged partly by the war and partly by disrepair during the years of the trade embargo under Saddam Hussein. The cost of drilling for oil is expensive but the cost of operating a well once it has been drilled is minimal. In some oil producing countries, the crude oil cost portion of gasoline is priced at the drilling cost not the market price of crude oil. I have not seen any recent numbers but I would believe crude oil could be pumped out for a few dollars a barrel. If that is how Iraq is pricing crude oil internally (and I bet it is), they could easily have gasoline priced at 38 cents per gallon.

Bill Pflanz

 

[Jim Wynne]

I wouldn't pay much attention to an "oil analyst" who is quoting oil prices for a 55 gallon drum. Oil is priced by the barrel and by definition a barrel is equal to 42 gallons. The current price is around $70 per barrel which is obviously higher than the analyst's prediction.

I think you may have misquoted about the cost of oil when you were really talking about the cost of making gasoline. The cost of the crude oil is about 50% of the cost of gasoline. The cost of the refinery process is about 15% of the cost of gasoline. The rest is taxes, distribution costs and profit with takes being most of the rest.

Iraq has refineries but they were damaged partly by the war and partly by disrepair during the years of the trade embargo under Saddam Hussein. The cost of drilling for oil is expensive but the cost of operating a well once it has been drilled is minimal. In some oil producing countries, the crude oil cost portion of gasoline is priced at the drilling cost not the market price of crude oil. I have not seen any recent numbers but I would believe crude oil could be pumped out for a few dollars a barrel. If that is how Iraq is pricing crude oil internally (and I bet it is), they could easily have gasoline priced at 38 cents per gallon.

Bill Pflanz

Not only that, but there's also local supply and demand to consider. In Iraq, there are plentiful supplies, but relatively little demand, so prices should be lower (although how much lower can only be calculated by politicians and economists ).

 

[Scott Catron]

$2.37/gallon for 85 octane in Salt Lake City, Utah.

This same location is $2.78/gallon today. 17% increase in a week.

I have cheaper options, luckily - paid $2.39/gallon at the Costco in Sandy, Utah yesterday morning.

 

[gpainter]

2.99 for 87 in S Indiana. Report on local station that another 30 cent a gal. increase by next week. We had 3-4 stations that ran out of gas!!

 

[Mary C.]

Our prices went from $2.60 yesterday to $2.89 this morning.

 

[Al Dyer]

$3.19 this morning in Flint Michigan. If said before I apologize, but how does releasing crude oil from our strategic reserve help if we have diminished refining capabilities?

Al...

 

[Jim Wynne]

$3.19 this morning in Flint Michigan. If said before I apologize, but how does releasing crude oil from our strategic reserve help if we have diminished refining capabilities?

Al...

The amount being pumped can't keep up with refining capacity, even though capacity might be diminished, i.e., the damage to pumping capability in the Gulf outweighs the damage to refining capabilities. In theory, of course. It's possible that release of reserves was politically motivated. Probably some combination of the two hypotheses is true.

 

[jmp4429]

Was actually cheaper here yesterday (2.44) than it was just before Katrina (2.55). I haven't seen the prices today, but I'm off to fill up my tank at lunch, hopefully before the prices spiral totally out of control.

Here goes nothing.

 

[Bill Pflanz]

The amount being pumped can't keep up with refining capacity, even though capacity might be diminished, i.e., the damage to pumping capability in the Gulf outweighs the damage to refining capabilities.

The bigger problem may be whether the ships bringing in offshore crude oil can offload their shipments. With the power outages and possible damages to the docks and pipeline pumping stations, the oil may just sit there. I have not heard of any barge traffic problems in moving oil up the Mississippi.

The oil companies probably did some advance planning before the hurricane to inventory oil or to get it from some other part of the U.S. rather than the Gulf Coast.

Bill Pflanz

 

[mshell]

I filled up earlier and it was @ 2.89 per gallon. A lot of the stores in our town and surrounding towns are running out of gas and don't know when they will get more.