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To: Think4Yourself who wrote (58891)	1/21/2000 10:10:00 PM
From: Roebear	Read Replies (1) \| Respond to of 95453

JQ,(and others) Excellent point on the taxes distorting the rise in gasoline and one that was mentioned rarely if at all in the media, especially in the "gas prices return to level of 30's" chortling articles they had last winter. Don't know if it was pointed up here much either. Seppo, thanks, I may turn on CNBC for the first time in months next week. SargeK: Hats off to Frank in Birmingham for the turn of the phrase of the week. Slider eat your heart out gggggggg! CC: Thanks for posting the valueline analysis, if you know the sector direction they are very helpful. Good night, Roebear

To: Think4Yourself who wrote (58891)	1/22/2000 8:37:00 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 95453

John Q: I agree that refiners may not be a good investment right now, but you do exaggerate your point. The main reason that gasoline prices have risen much less than crude is that taxes typically account for about half the retail price of gasoline in this country. And much more in Europe. BTW, one of the issues that has long irked OPEC is that European countries collect much more in taxes on a gallon of gasoline than oil producers do on the crude required to produce that gasoline. That probably holds for the US as well -- although to a lesser extent.

To: Think4Yourself who wrote (58891)	1/22/2000 1:10:00 PM
From: edward miller	Read Replies (3) \| Respond to of 95453

I don't know if anyone has responded, but here is my take. You haven't done the math. How many gallons of gas are recovered from each barrel of crude? I personally don't know (but I'm sure someone on the thread does). When crude triples the only cost that increases is the cost of getting X gallons out of each barrel. I won't bother with trying to do the numbers. The point is that you missed the big picture. The cost of labor and of refinery maintenance do not triple just because crude prices triple. Also the tripling is reflected only in the wholesale price of gasoline. Look at the difference between gasoline futures vs. price at the pump. Finally, the cost of delivery and retailing is added to the wholesale price. You are implying that these costs should also triple or the people doing these tasks lose money. Are you saying that the taxes triple ??? This is all nonsense !!!! There aren't major loses to eat. This is similar to saying that if the price of wheat triples then bread prices triple. The cost of wheat in a loaf of bread is running about 5% of the retail price. The rest is labor, the cost of running the bakery and transportation, plus profits. Basically that means if the commodity were free that our product cost at retail would slightly drop. When the commodity prices rise the cost of bread should not rise significantly, but we know that usually doesn't happen. It becomes an excuse to pad the profit margins. That is why competition is so important to maintaining reasonable prices. This shows just how far we have gone from being a resource based society. Edit: I am of the opinion that people will complain but not curtail energy consumption until the price at the pump is well over $2 per gallon. In other words, crude prices will be over $50 before people really get concerned. They won't care until prices at the pump start to really hurt.