The ignorance which is spouted by people astounds me.

When oil is "refined", it is first and foremost distilled. All various products are produced at the same time. Natural gas, naphthas, kerosene, diesel oil ... they're all separated out of crude oil. They are all components OF crude oil, not something into which oil is transformed. Various hydrocarbons can be combined into larger chains, or split into smaller chains in order to produce a different product, after the fact, but no, they do not decide "This is what we want" at the distillation level.

Perhaps a more ... annoying peeve of mine is the assertion that OPEC cares about, much less decides the ratio of finished products produced at an oil refinery. Trust me, OPEC has nothing to do with it. To initiate those less familiar into the chain of events, here's a rough outline: Oil is produced from the ground or purchased from an outside source (OPEC). That oil is sold to a common supply pool. Oil refineries purchase that oil from the common pool, produce whatever products they seem fit. In this instance, we'll say gasoline (since that's relevant to the title). The gasoline is sold, once again, to a common pool. Individual gas stations then purchase the gasoline from the common pool, add their respective company's additives and detergents into the gas, and sell it to you, the consumer.

Oil might be drilled by Exxon-Mobil, refined by Valero, and sold as gasoline at a Citgo. Trust me ... the relationship between oil companies is damn-near incestuous.

All this discussion brings up another question, though. Who does decide what particular end products are produced at refineries? The answer, ever so always, is you. Er... that is, if you purchase energy futures through the Intercontinental Exchange. Coincidentally, you would also be the first person in the long chain of events to dip into the profits produced by the gasoline. Reason #1 why gas is so expensive! You greedy bastard!

Oil companies are segregated, as already established, into different sub-companies for the various stages of gasoline production. Most large oil companies are split into an Exploration & Production side (drills wells and refines the oil) and a Distribution & Retail side (gets the gas to the pumps and sells it). The refineries charge a fee (obviously) to produce products from the crude oil. Reason #2 why gas is so expensive! The cycle goes on and on. Every person or company who handles the gasoline requires a wage or fee. It all ultimately gets "nickel and dime"d to its present stifling high cost.

Here's where the politics comes in. It could be argued, given the ubiquitous necessity of gasoline in our economy, that gasoline should be considered a commodity. In the United States, the government has an assumed responsibility to protect consumers and, ultimately, the economy from grossly inflated commodities pricing. In practice, this would mean nationally regulated prices, with perhaps a little adjustment based on such factors as logistics (expensive to ship to Hawaii, etc ...) It would also mean paying subsidies to people who have to forsake profits because of the reduced prices. The only other political factor is the issue relating to gasoline taxes. But, isn't this an issue with everything which is taxed? On an interesting side note: At the request of shaogo, I investigated information regarding comparative gasoline pricing between Europe and the United States. The average price per gallon of gasoline in US dollars is anywhere from 100% to 150% higher in Europe than in the United States. A great deal of the cause of this is the up-to 300% (75% of the cost of every gallon) fuel tax that European nations impose. Wow ...

I know the popular complaint is to assert that the oil company CEOs are making bank, which indeed they seem to be doing. But, that's another argument all together.

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