Why does gas cost so much?

[djkimmel]

An interesting two page web article that clarified a few things for me anyway on why gas cost so much:
http://autos.aol.com/article/general/v2/_a/why-does-gas-cost-so-much/20070831142609990001

I still think some of the gas companies are greedy and some fishy things are going on....?

[JCOOPER]

A little off topic but not really.  Maybe someone can help me.  My vehicle is a Flex Fuel vehicle that can burn E85.  In my owners manual it says it is 30% less efficient than gasoline.  with gas right now at 2.69  (St. Louis fuel much cheaper!) E85 is at 2.39 it is always at 30 cents cheaper.  Everywhere I go 30 cents cheaper.  E85 is not a gasoline by-product so why does the price of gas dictate the price of E85???   With gas at 2.69 E85 needs to be at 1.89 to be the equivalent price in effeicency?  I drive north this weekend in michigan I found gas as cheap as 3.09 with E85 at 2.79  30 cents arghh.

Why??

[djkimmel]

Because the gas companies are not being run by stupid accountants...?

[Duke]

I think anyone who believes all of the reasons given, either in this article or otherwise, is naive. How can prices today be just a quarter less than post-Hurricane Katrina? Was there a multitude of oil refineries damaged that didn't get reported? Keep this in mind: the US purchases 400 million gallons of gas per day. Now do you realize how much gas companies make when there's a $.20 increase? And in all seriousness, to make a $.20 increase, that percentage increase should indicate a major disruption for any product. What if cars went up that much overnight? or appliances? or food? etc.

The answer is GREED. I wish that was simple to fix.

As far as the E85 goes; you've pointed out the problem right on the nose. Its only there for someone else to make a bundle.

And I always ask, where is the press coverage? Its minimal at best.

The only thing we can do is conserve as much gas as possible. Easier said than done.

[motocross269]

I wouldn't feel so bad if the oil companies weren't making more money than any other companies in history....Until I see their profits slide I will not believe it is anything, but greed.  Now where did I put that bicycle...??

[Bender]

One word: Biodiesel. That is what I run in my car when I can find it. E85 is really a joke since it is much lower BTUs and costs more to produce. The only reason it is cheaper than gas is because it is subsidized by the gov't. I do run E85 in my truck, but that is futile compared to the gas companies.
Biodiesel is nearly the same BTUs as normal fuel and is made here. I still get over 40 MPG with it. Start here: www.biodiesel.org and if there are any questions I can answer I will. I'm no expert, just a user.
Don't dump it into your 25 year old truck without checking first, but it "should" run in anything.

[Mojo]

I too found is very strange that 2 months before elections - gas prices fell almost $0.60 to around $2.20. A simple answer that I researched and found true was the US Government oil reserves were reduced - in local timeframe - in a signifacant fashion. Meaning: During non-war conditions the US Government purchases refined gasoline and holds a reserve of about 8 - 9 % of weekly usage. During war it goes up to 11 - 12 % due to service and operations of its military forces. That takes refined gas off the market and shortens supply to you and I. During the elections US reserves were let down to pre-war levels below 10 % in a two week period and refined gas was freely available to the US gas companies .... temporarily. Now follow me here.

The United States Refines its own gas. We refine 100% of the gas for Mexico, (we actually buy the crude from Mexico, refine it and sell it back to them for a nice profit !),  and a certain percentage of our refinery capacity goes to our friendly neighbors abroad.  We run today above 95% capacity, with NO plans to build another refinery. As American demand continues to naturally grow (because our population is slowly growing), supply shortens and prices spike. So the US is in a self created hyper sensitive price mode whereas any change in oil, supply, environment, war, refinery etc has a damaging effect on prices. It cant go down because of the limits of refinery capacity. The cost to purchase refined gas from abroad is just too high so we are stuck. It will only be when crude oil prices go below $45 a barrel will you see our prices go below $2.70 / gallon.

In my opinion of course.