Jul 4, 2008 11:58 pm US/Eastern
'Curious' About The High Price Of Gas
Who Is Profitting, Oil Companies' Record Profits
BOSTON (WBZ) ―
Rising gas prices seems to be our new reality. Drivers all over the region are feeling the impact.
My bank account is almost empty right now," a young woman from Brighton said. "You can't drive anywhere. You can't travel."
When asked what adjectives she would use to describe her feelings about gas prices, a mother from Weston said, ''Angry, frustrated, and puzzled as to why they are so high, and how much further it is going to go.'"
One of the first steps in understanding the cost of gasoline is to break the price down:
About 58% of what you pay represents the cost of the crude oil.
About another 15% goes towards state and federal taxes.
The refining process and profits eat up about 17%.
While 10% covers the costs of distribution and marketing.
But that doesn't answer why the prices have spiked so dramatically. A desire to understand the reasons behind that spike spurred several viewers at home to declare their curiosity at the WBZ web site
declareyourcuriosity.com.
John Walsh of Concord was curious about "OPEC and why we don't do anything to those countries ruling the oil prices. It smacks of price fixing."
The answer to that can be found in the booming economies of China and India, which now have an American size thirst for oil. Steve Mazor of the American Automobile Association explained that the United States "cannot control the flow of oil as much because our share keeps getting smaller and smaller as other countries buy it."
Here at home, we see the profits of oil companies surge on Wall Street. Deanna Bandilla of Spencer was curious "Why they are still making astronomical profits and the government is just sitting back and watching the American people suffer."
For that, you can blame American capitalism. As Mazor explained, "This is free enterprise and you are entitled to make a fair profit, and people can argue what a fair profit is, but they are entitled to do that."
That focus on free enterprise is also what's making crude oil an investment, instead of just a source of energy. "The main one seems to be investment driving up the cost of crude oil, and particularly in the last few weeks," Mazor said. In Washington, congressional hearings are examining how to reign in, or even ban, speculative investment in the energy markets. Some experts believe that could be the cause for as much as half of the increases that we are all paying.
Paying for gas represents, on average, about 5 percent of a family's budget. But the impact can have a bigger psychological effect on how consumers feel because we tend to fill up so often.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
Troubled Hospital Stops Admitting New Patients 20 mins ago
Stumble It!
Comments