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Obviuosly, you must not believe that freer markets and freer trade are more efficient and effective economically?

Somewhere back around Teddy Roosevelt's time, or starting slightly before, we figured out that totally free markets were not such a good thing.  Those were the days when guys named Rockefeller and Carnegie controlled entire sectors of the economy.  Didn't work out so well for anyone, other than the Rockefellers and the Carnegies.

The mini series, The Men Who Built America did a pretty good job of teaching me what those men and others similar to them did in order to monopolize markets. JP Morgan was another who successfully controlled large segments of the industries he was vested in.

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  • valuman

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Just to answer the above question, we pay roughly £0.58 per litre duty on petrol (regardless of the price) and then 20% tax on the total.

Without duty or tax, petrol is about 52p per litre (£1.96 or $3.26 per US gallon)

So it's $3.26 + $3.64 duty + 20% tax = $8.20 (I hadn't checked to current exchange rate, so it's worse than I thought)

As far as trains go, a return ticket to London - about 65 miles away is £32.90 if you travel after 9:00am (more at peak times) so that's nearly $55 - hardly cheap.

For comparison (for anyone who thinks we have it tough) from the US govt site US energy dept link

Gas: 70% crude, 12% refining, 6% Marketing & Distribution, 13% taxes (I know...it doesn't add up to 100% but it's the gubbermint  :laugh:  )

Diesel: 59% crude, 15% refining, 14% Marketing & Distribution, 12% taxes....refining costs are significantly affected by whether it is sweet or sour (high sulfur content) and region (Asia has historically permitted burning higher sulfur contents in diesel though that is now changing).

Avg price of regular gas nationwide was $3.549 on 3/24/14 down $0.131 from a year ago...whereas diesel was $3.988 down only $0.018

So the breakdown on $3.549 would be $2.4843 crude, $0.4259 refining, $0.2129 M&D, $0.4614 taxes...taxes out is not far off UK base price of $3.26 (assuming that covers crude, refining, M&D costs)....

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Curious, based on above where do you see driving cost out of the system and how?
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So our pre tax price is only about 17c a gallon more than yours.

Trains companies in the UK are heavily government subsidised - tax payers money- and ticket prices are still way higher than in the rest of Europe.

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Larry Brown
At least you HAVE trains, Jay.  In this country, about the best we can say is that we USED to have trains.  Well, still do--but they mostly only carry freight these days.
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Curious, based on above where do you see driving cost out of the system and how?

Out of the 75% profit on the upstream side of the business would be the obvious place to start. How, is the question that I asked earlier.

Taking a bite out of the tax rate would be a good thing too.

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V-man,

No disrespect here...just help me understand wher the 75% upstream profit comes from?

According to the same US Govt site lates price of crude is $100 /bbl with 42 US gals per bbl...since PRI?e has jumped up and down around that let's use $100/bbl for some easy math...gas yield on a barrel of oil is 45% for a net raw material cost of $45 on 19 US gal yield or $2.37/gal crude portion (independent of who supplies it...OPEC or Exxon)...I'd we use the govt figure for crude as a percentage of current SP for gas we get $2.48/gal...based on above process yield that 11 cent difference is nowhere need 75%..is it in the refinery cost or the M&D costs...any way you cut it the the opportunity for cost reductions are not in dollars but cents...our taxes are damn low compared to ROW...so help me u derstand where the 75% margin comes from and express it dollars per gallon by the cost breakdowns used by the US govt site...I just don't see it...but an open to being enlightened...where did this 75% figure come from?

Thanks,

Pierre

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No offense taken. You have to dig a little deeper, Jazzman; or read what's been posted previously.  :<img src=:'>

This quote that I posted earlier is from a business/investment article published this March.

If you saw a company that hired some of the brightest, most well-educated graduates from top universities, set them up with some of the most sophisticated computers known to man, and put them to work at a business that generated net profits in the 75% range, wouldn't you assume the firm at which you were looking was a tech firm loaded with valuable intellectual property? This description fits one of Exxon Mobil's three segments to a "T" - the "Upstream" segment responsible for finding and drilling for oil and natural gas. For example, in 2012, Exxon Mobil's (XOM) upstream segment generated roughly $40 billion in sales and generated a whopping $30 billion in profits after taxes.

Seeking Alpha Article on Exxon

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Kansas Big Dog

If you saw a company that hired some of the brightest, most well-educated graduates from top universities, set them up with some of the most sophisticated computers known to man, and put them to work at a business that generated net profits in the 75% range, wouldn't you assume the firm at which you were looking was a tech firm loaded with valuable intellectual property? This description fits one of Exxon Mobil's three segments to a "T" - the "Upstream" segment responsible for finding and drilling for oil and natural gas. For example, in 2012, Exxon Mobil's (XOM) upstream segment generated roughly $40 billion in sales and generated a whopping $30 billion in profits after taxes.

Seeking Alpha Article on Exxon

Here is a couple quotes from your Alpha Article on Exxon you referenced.

"This description fits one of Exxon Mobil's three segments to a "T" - the "Upstream" segment responsible for finding and drilling for oil and natural gas. For example, in 2012, Exxon Mobil's (XOM) upstream segment generated roughly $40 billion in sales and generated a whopping $30 billion in profits after taxes."

"The "Downstream" segment deals with refining crude oil into various types of useable energy products (aviation fuel, gasoline, diesel, etc.) and marketing it to consumers. It is a notoriously volatile and low-profitability business, but makes up 80% or more of Exxon Mobil's revenues. 2012 was a very good year for the downstream segment - with after-tax profit margins four times what they had been in the previous two years - after-tax margins climbed to 4%."

So, 80% of Exxon's business (Downstream)  had after tax margins of 4% (and that is considered very good), and 20% of their business (Upstream)they had after tax profit of 75%.  That sounds about right as the Upstream is very risky and more than likely the profit % will balance out when Exxon hits a few dry holes.  Furthermore, have we not for decades been encouraging oil companies to find domestic oil so we could be energy independent?  Sounds like they have been successful.  Should they not be rewarded for that?

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