Are we talking futures, or what refineries are paying?
As I said, the numbers I used were approximate as I was only trying to prove a point, which is:
If crude goes up by a factor of x, then the nontax portion of the price of gasoline will go up by the same factor. As such, $50 crude translates into (roughly) $2 gasoline. By factor I mean percentage - crude goes up 10% implies nontax portion of gas goes up 10%.
Edit: given razors helpful tax rate link, mich and federal taxes are $.38 so nontax price of gas now is $.96.
Thats about $.30 for every 10$ of crude price. If crude goes up to $50, gas should go up $.65 to about $2
Looking at the product breakout from a barrel of crude it becomes obvious that gasoline, heating oil, and jet fuel comprise the bulk of the products. If the economy is going to go into recession from crude prices, it is going to be because of these three products. Consumers appear unconcerned about the price of gasoline or heating oil. Transportation companies will be hurt badly, as will the airlines. The rest of the economy couldn't give a rat's a$$ how expensive oil is, because we are no longer a manufacturing based economy (we shipped it all to Mexico, Canada, and overseas). That's why the economists don't really care about the price of oil.
OH MY GOD! I am agreeing with the economists!! There MUST be a major flaw in my logic! :o)
That being said, when the crude prices start showing up in the prices of products imported, then it is time to be concerned.
CRAP - I am agreeing with them again! |
