Feeling abused at the pump? Some startling facts ...

about how CHEAP fuel is in the USA.
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Despite daily headlines bemoaning record gas prices, the U.S. is actually one of the cheaper places to fill up in the world. Out of 155 countries surveyed, U.S. gas prices were the 45th cheapest.

RANK COUNTRY $/gal
1 Bosnia $10.86
4 United Kingdom $8.38
10 Germany $7.86
111 UNITED STATES $3.45

On a per capita basis, Americans use three times more oil than Europeans, he said. That means Americans are more exposed to rising gas prices than their counterparts across the Atlantic.
Copyrighted, CNNMoney.

I for one like cheap fuel prices. I still say if we don't get the fuel price down we as a country are in trouble. Our congress has sat on their back-side and let the tree huggers take this economy in a tail spin. The RV industry is in serious trouble, and Truck/Suv sales down 37% for Ford and 27% for GM all because of the Oil price. Thats not even talking about food prices. Fertilize has tripled in price, wheat is going up, milk bread. I could go on and on, and its being driven by Oil prices. So for some of us its a problem and for others they could care less, and most of them has their head in the sand, but see their stocks going up. They don't see the big picture. Our country runs on Oil, and we have let it happen, so just vote the same ones in office every election and it will continue. I will not vote for anyone who votes against drilling for oil any place. And who creates problems for building new refineres, EPA should be eliminated now. GBY.......

B.C. Canada fuel prices are running over $5.00 American factoring in liter/gallon conversion and the exchange rate.

The cost differentials in petroleum fuel prices around the world are based almost entirely on three factors, though.

The First is taxes. In many of these other countries the extra they pay for fuel provides funds for amenities that largely come back to the population, like mass transit, government funded universal health care, and education.

The second factor is the value of the US Dollar on the world markets. Oil is universally priced in US dollars. When the value of the dollar was high, the US enjoyed the lowest fuel prices in the world. The value of our dollar has eroded about 50% over the last 5 years against most other currencies. That accounts for the fuel prices remaining fairly constant in other countries despite the price per barrel, or price per gallon increases seen here.

The third factor is supply and demand. The world demand is rising, and very little investment on the supply side has happened in decades. There has been little exploration, drilling, no new pipelines or refineries built, etc. Why would they invest in that? Oil companies would just as soon realize that cash as profit as invest their money into something that only would serve to increase supply and relieve prices.

Rickhansen said:

The third factor is supply and demand. The world demand is rising, and very little investment on the supply side has happened in decades. There has been little exploration, drilling, no new pipelines or refineries built, etc. Why would they invest in that? Oil companies would just as soon realize that cash as profit as invest their money into something that only would serve to increase supply and relieve prices.

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While I basically agree with your first two points. I have to strongly disagree with your third point. I have been working, as a contractor, in refineries for the better part of the last 8 yrs. I have been involved in the construction of many projects that greatly increase their refining capacity. At least 3 refineries that I am aware of have doubled their throughput of refined products. One in particular increased their refining capacity from 125,000 bpd (barrels per day) to over 300,000 bpd. As we speak Motiva, a joint venture between Shell and Saudi Arabia ( if I remember correctly), is expanding a refinery in Port Arthur, Tx. It is a 5 yr project that will turn it into the largest refinery, based on capacity, in the United States. I recently finished a project in Colorado, that was one of 8 new natural gas plants that will be built in the next 5 yrs. Numbers 2 and 3 are under constuction as we speak. I also know that Shell has undertaken a major project in Colorado to extract shale oil. And many drilling and exploration projects are taking place right now in Utah, Colorado, and Wyoming. In just one county in Colorado, there were over 4,000 oil field workers that arrived, within the last 8 months, to perform exploration and pumping operations. This information comes from first hand knowledge of what is happening in the industry. I have participated in and or witnessed everything that I have just written about. Conspiracy theories abound regarding almost every major industry in the world, they always have and I imagine they always will. But having seen first hand what is being done to increase production and supply, this one just doesn't hold water.

Thank you Fred;

That is the kind of information that we like to hear.

John

Oldlthrneck is 100% correct. We live in Port Arthur Tx and the refinery expansions are going stronger than ever. Motiva is doubling there plant, Valero has recently expanded and has plans for another large progect. There are currently two new pipelines under construction now with the third to start soon. These projects never make the national news, but they are indeed ongoing.

Based on your your personal observations, I stand corrected and I have no firsthand knowledge of the industry. Apparently, the department of energy doesn't have much either. Their website currently indicates US Refinery Utilization just over 3% from 2002 through 2007 [http://tonto.eia.doe.gov/dnav/pet/pet_pnp_unc_dcu_nus_a.htm] from 16.4 MBPD to 17.1 MBPD. IE 3% production increase in 5 years

If those are real numbers 3% increase in 5 years is hardly stellar. Hopefully the recent trends you speak of are sustainable and continue.

Well I can see why they would be trying to increase refined Oil into gas and Diesel with the amount of money they are making it would make sense. But I will have to see it to believe it. Why should they, they have us right were they want us, over a barrel. We have no other choice until something else comes along. And that will take at least 20+ years. And when big oil see things slowing down the price will come down a few cents. When you have a monopoly your are in control. And they make so little selling gas and diesel, but its funny there is a fueling station on most ever major intersection? GBY....

Buy lots Exxon/Mobil, Shell, Conoco stocks and get rich with them. Why fight it.lol I learned that a long time ago.
They were my best customers, in good times and bad. We were both loyal.
John

Oldltrneck there is only 1 hole in that statement - Saudi has reduced production 800,000 barrels a day. I do agree we need to do something such as become energy independent. How we get there is a mixed bag but so long as we stay a net importing country - we can watch other countries spend our cash. By cutting our importing of oil we would become a net exporting country again ( the industrial age ). I am not trying to make anyone mad but everyone needs to open their eyes and see this for what it is. BTW I am also in Commercial contracting and worked on the plant in Commerce City, CO. I am tired of watching our dollars flow to the middle east where they really hate us.

I worked for an Oil company here in Canada during the late 80"s and early 90's and as "cost cutting" measures by several of the large Integrated companies, at least 4 refineries were shut down. That is a lot of capacity. These companies are all making Exhorbitant profits because of "Supply and Demand". Sorry, they contributed in a huge way to the supply problem on the downstream side....

SPeter said:

Oldltrneck there is only 1 hole in that statement - Saudi has reduced production 800,000 barrels a day. I do agree we need to do something such as become energy independent. How we get there is a mixed bag but so long as we stay a net importing country - we can watch other countries spend our cash. By cutting our importing of oil we would become a net exporting country again ( the industrial age ). I am not trying to make anyone mad but everyone needs to open their eyes and see this for what it is. BTW I am also in Commercial contracting and worked on the plant in Commerce City, CO. I am tired of watching our dollars flow to the middle east where they really hate us.

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I don't see where whatever the Saudis do, or what happens in the Middle East puts a hole in my statement. I stated facts, as I have observed them and things I have participated in. Albeit only a small part of the entire picture of the world supply and production. I am not a shill for the oil business nor do I own stock in any oil companies, I merely tried to shed some light on the subject based on personal experience.
Fred

What happens is when they cut production and consumption is hi as in the growing demand in China, we all pay for it at the pump. There is an artifical price increase due to the cut back in production of barrels of oil, therefore price goes up and we get stuck at the pump.
Also all the oil we are pulling out of Alaska is being sold to Russia and Anwar is 7-10 years away from pumping any oil.
We can have all the refinerys in the world but if production does not increase it doesn't mean spit. We have to become energy selfsufficent.
I am just saying follow the money and you will see who is rigging what.

As for the prices paid at the pump, I saw on the national news a few days ago the price at the pump in Venezula is 17 cents a gallon. The just dont like us and have made it hard on us getting their oil. I believe it was 45 cents a gallon in Saudi.

Talking about the gas prices elsewhere, I don't see and Bosnian's hauling 16,000 pound 5ver's through out their country. How big is Bosnia...size of Texas maybe? Finally when I retire, the economy goes to ****....just my luck.

CA. San Bernardino-Redlands area was running $4.59 for diesel today. I'm a little puzzled, I was on I-10, keeping it about 60mph and was being passed by everything (small and large) like I was standing still.

Packer

DougLynne said:

Sorry, they contributed in a huge way to the supply problem on the downstream side....

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So let me get this straight ... a business is obligated to overproduce a product to keep the price down? So if it's corn or concrete or steel or copper, the business is in business to minimize profits and maximize production ???

Just exactly what business do you work in? If your company's conducting its business in that way, you should start looking for work.

Seriously ... is capitalism dead? You can buy Exxon (XOM), ConocoPhillips (COP), ChevronTexaco (CVX) and hundreds of others in the open market. You can also buy crude oil (OIL) and production trusts (PBT, SJT). Make a profit if you think that prices are controlled by these people. You MIGHT want to consider how they allowed $11/barrel oil to occur in the mid-80's if they control the price. The notion that major oil companies control the marketplace has HUGE gaps in the logic.

Where I am at now, Hardeeville, SC diesel jumped 22 cents today. It is now $4.39 a gallon and just 2 1/2 weeks ago it was $4.03. If this keeps up I may have to workamp just to make it to the next place wherever it may be.

There was an article yesterday on CNBC about how countries like Peru and Chile are short of commercially available electricity and many businesses have reverted to private diesel generators to make their own which has dramatically increased diesel demand. There are similar issues in both China and India.

It's a tough period of supply (essentially level) and demand (radically increased). That drives the price up. No different with copper or corn or a multitude of other commodities.