I find it increasingly difficult to believe that, adjusted for inflation, we are paying less for gasoline now than was paid in 1930 (about thirty cents a gallon). Apparently, 30 cents in 1930 was worth a whole lot more.
According to a report in the local news rag a few weeks ago we shouldn't blame the oil companies alone for the current hike in prices. Nor the oil cartel known as 'OPEC'. While they all play a significant role in the process there are myriad factors having to do with the whole distribution network including our reduced refining capacity which is about 10% less than it was in 1980 which keeps supplies lower than demand which pushes prices upward.
I also discovered that they have to make a special blend for California only because of their stringent environmental standards, thus significantly higher prices on the west coast.
Also, I was surprised to learn, the oil companies profits are not skyrocketing as some suspect. It actually averages about 4.7%. This is pretty good for most businesses but not outrageous unlike some industries such as banking and pharmaceuticals which average around 17 to 19% profit margins.
I am not a defender of the oil industry per se. I just thought these facts were interesting and enlightening. It always helps to know the facts assuming the report I read was accurate. What do you think?
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