Petrogram - Fall 2008 - (Page 8)
President’s PERSPECTIVE The Pain Goes Beyond the Pump This ran as an editorial in the Palm Beach Post on June 8, 2008. loridians feel the pain of higher ga soline prices every time they fill up. But that pain doesn’t end at the pump. It is also felt Jim Smith by those that own the pumps. Like their customers, they are hurting because this country is too dependent on foreign oil. More than 6,500 of the approximately 9,200 retail facilities in the state are owned or operated by single-family (mom and pop) businesses. They face the burden of paying for fuel deliveries that now cost more than three times what they used to. There is also the knowledge that many of them face a state mandate to replace underground storage tanks at an average cost of $250,000 per facility by December 2009. F lon. Add the average retailer mark-up of $0.098 and that gives you a total cost of $4.009 per gallon. That retailer mark-up is dependent on any number of issues including property taxes, insurance, payroll and the second-largest expense they all face, which is credit card fees. When gasoline was a $1 a gallon, the 2-percent fee amounted to $0.02 a gallon. That same gallon, at $4 dollars now, costs the retailer $0.08 a gallon. The credit card companies are making more proﬁt per gallon than the retailer on those transactions. Clearly the retailers are feeling some pain as well. So why is crude oil at record highs? There are several reasons with the most signiﬁcant one being the unchecked speculation occurring in the international markets that are trading in oil futures. Unlike commodities traders on Wall Street, these traders are virtu- ally unregulated. In Atlanta, the Intercontinental Exchange is where this is happening and recognizable names are participating in a big way. The next time you read a comment by an “expert” from Goldman Sachs or Morgan Stanley, you should view those comments with the knowledge that they are two of the primary organizations trading there. When they say oil will go to $150 a barrel, they create another upward spike that comes back to them in the form of big dollars. Crude oil is also subject to the laws of supply and demand. With China, India and others expanding their energy needs, there is increased pressure to secure available product on the world market. This country has an ability that those other countries don’t have. We have proven reserves of crude oil that we are prevented from accessing. We have enough to eliminate imports The ideology of environmentalism has made us dependent on foreign sources at the possible expense of our future sovereignty. Let’s break it down Let’s look at what goes into the price of a gallon of gas. Crude oil accounts for more than 75 percent of the cost. At $130 dollars for a barrel of crude (which was reached late last month for June deliveries), that equates to $3.095 per gallon. Reﬁning and distribution accounts for $0.27 cents per gallon. In Palm Beach County, federal, state and county taxes account for $0.546 per gal8 | Petrogram | Fall 2008 www.fpma.org
Table of Contents for the Digital Edition of Petrogram - Fall 2008
Petrogram - Fall 2008
Welcome, New Board Members
Getting the Message Out There
Spotlight on FPMA's 2008 Convention & Trade Show!
Out & About the Industry
Alcohol Beverages & Tobacco Regulation: Questions and Answers
Hedging 101: Part II
What Owners Should Know
The Price-Gouging Statute
Conference of Committees Registration Form
Index of Advertisers
Petrogram - Fall 2008
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