"Gas Prices continue to rise thanks to more taxation" by Gas Prices on the Rise Again!

Gas Prices continue to rise thanks to more taxation

Blog: Gas Prices on the Rise Again!

December 30, 2011

Like most motorists, the volatility of gas prices never ceases to amaze those of us who have tanks to fill on a regular basis’s; as well as the difference in pricing across our state. Christmas we were in Burlington for the Christmas Holiday. Gas in Graham was $3.12 cents per gallon. In Tramway, one station was at $3.15 while most in that area was $3.20. Now let focus on Resort gas prices here in Poorer County. The constant average has been $3.35 cents with very little fluctuation. Not even for Christmas. Greed or whatever the consumer market will bear in a struggling economy, is the name of free enterprise in our society.

In 1995, North Carolina’s legislature passed a bill into law, General Statue 105-449.80 and 81, which will affect all of our wallets in the New Year with a 3.5 % increase on the state level and 4% on the federal level. One note of interest: North Carolina is presently ranked 9th in the country for high gas taxes. Now let us consider House Bill 645 that places a 17.5 cents cap on fuel products at the pump - Thank you legislators for robbing us blind. Our legislators continue to serve the interest of oil producers and distributors. The history of gas taxes go back to 2004 when they legislated an inspection tax of 0.25% and a rate increase of 2 cents per gallon to at 24.6 cents to 26.6 cents on January 1, 2005. At that time gas was selling at the pump for $1.30.

What is big oil doing to contribute to the overall economy in the US?

“The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes”.

Federal officials considered a new tax on petroleum production to pay for the cleanup from the Gulf Oil spill, the industry is fighting the measure, warning that it will lead to job losses and higher gasoline prices, as well as an increased dependence on foreign oil. But what they failed to mention is that the US exports 64 million barrels a day!

An examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.

According to the most recent study by the Congressional Budget Office, released in 2010, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general, and lower than virtually any other industry. Congressional pundits keep railing that if corporations are given tax breaks they will start hiring and create jobs… I have one question, where?

Congressional PAC’s are saturated with money for representatives and we wonder why our system is broken? It’s a shame that our representatives in Raleigh chose not to attempt a repeal of the new tax on gasoline and diesel fuel. But as usual, they go along to get along…at our expense.

http://www.commonsensejunction.com/notes/gas-tax-rate.html

Toda 1 year, 4 months ago

Stf_Sgt_Viper 3 hours, 54 minutes ago => Good observation...when I researched this information I found that Richard Morgan was in office when the "Excise Tax Adjustment and Studies" was introduced and passed.

Republican's must have the ability to forecast future oil prices and demand. The tax increase we will see in 2012 was passed in 1995!

Military spending and the Pentagon are out of bounds for many in Congress and the Senate. I go back and think about those $500.00 hammers and $3,000. toilet seats. To say nothing about the failed military projects that were scuttled when system platforms failed. But then how many Congressman have gone on to become lobbyists for major corporations? Newt Gingrich had a sweat heart deal with Fannie Mae and Freddie Mac...30 to 60K a month.

fmapinehurst 1 year, 4 months ago

Viper.

beware of anyone claiming "lower taxes" it usually means taxes go up everywhere else. (something that republicans like doing because their base is easily manipulated due to it having such low percentiles of people who actually have a high school diploma)

You have "ZERO" cred when you comments per the above. What nonsense. Comments like this make the rest of your input useless. Nothing wrong with your info, but the above dispays ignorance.

Toda 1 year, 4 months ago

I hope for the sake of civil discussion about my blog, that all contributors will refrain from condescending rude remarks. Let's be civil Please!

One note of interest is that the majority of our sweet crude comes from Canada ~ not foreign countries. I will provide a link if requested. Recently in the news, Republicans have tied in the Keystone Pipeline Project with social bills affecting the unemployed's benefits. This project has been in the works since 2008, under the Bush Administration ... Why build a pipeline transversing the US (1,700 Miles), it's going to Texas! Big Oil and wealthy Texans.

Information from the US Department of State: (link provided)

Project Background TransCanada Keystone Pipeline, LP (Keystone) filed an application in 2008 for a Presidential Permit with the Department of State to build and operate the Keystone XL Project. The proposed Keystone XL Project (click here for map) consists of a 1,700-mile crude oil pipeline and related facilities that would primarily be used to transport Western Canadian Sedimentary Basin crude oil from an oil supply hub in Alberta, Canada to delivery points in Oklahoma and Texas. The proposed Project would also be capable of transporting U.S. crude oil to those delivery points. The proposed project could transport up to 830,000 barrels per day and is estimated to cost $7 billion. If permitted, it would begin operation in 2013, with the actual date dependant on the necessary permits, approvals, and authorizations.

Read more about the project here: http://www.keystonepipeline-xl.state.gov/clientsite/keystonexl.nsf?Open

Toda 1 year, 4 months ago

wdd101st 18 hours, 26 minutes ago => "Didn't see the Dems doing anything to reduce the taxes over the last 15 yrs. They too voted to increase the taxes on fuel so why do you always blame Republicans alone. Both are equally to blame"

From my research and telephone conversations with a librarian at the Legislative Library in Raleigh, you are correct. Since 1995, the law, Chapter 390, Section 3, General Statue 105-449.80 & 81has gone unchanged or challenged. We are now in 2012, so how was it that we have gone from 9th in the nation for highest tax on fuel, to number 4? Could it be the state is mismanaging our money? I think those who write laws should consider the impact on North Carolinian's.

Comments or rebuttal welcomed.

DaveyNC 1 year, 4 months ago

Viper, does the phrase "cognitive dissonance" mean anything to you? Quote from you, just on this page:

"We should put more attention on learning how to be civil, well behaved, dignified people..." accompanied by:

"(something that republicans like doing because their base is easily manipulated due to it having such low percentiles of people who actually have a high school diploma)"

"Americans need to pull their self entitled heads out of their overweight butts ..."

"What an asinine and irresponsible comment... based on rhetoric... man, I cant stand frivolous commentary (aka LIES)."

Not very civil and dignified. Arrogant and insulting is more accurate.

And by the way, you say that we pay too little for fossil fuel products. How much should we pay? Who gets to set prices? How often will that person change prices? Will the price stay the same irrespective of the cost of production? What if Iran succeeds in closing the Straits of Hormuz? Will you hold prices level? What about another Katrina that shuts down the pipelines that deliver gasoline? Will you hold prices constant in that case? If you do hold prices level, how will you pay for the raw materials needed to continue to produce gasoline or oil? I mean, if you charge less at retail than your cost to produce, how will you go about repealing the laws of supply and demand and continue to stay in business? If the price of oil goes down, will you lower prices or keep them constant? What is the right amount to charge? How do you determine that? What if you are wrong and either charge too much or too little?

Take a look at Hayek's concept of the economic calculation program: http://goo.gl/aPKfY.

fmapinehurst 1 year, 4 months ago

Viper,

"Please" provide your source and data on Republicans being in the majority that don't have a high school degree. Just curious- not whining nor disrespectful.

Toda 1 year, 4 months ago

DaveyNC 1 hour, 35 minutes ago

Thanks ~ a good thread which causes one to think...

Most economies are based on the theory of "economies of scale" where mathematically: MC = MR.

Petroleum based products including materials used in construction, are effected by ~ you guessed it ~ Wall Street. That's why one can be pumping gas and as soon as one hangs up the handle, the price goes up. Same gas in the same underground tank.

What disturbs me with markets and politics, is there is no regulations for Hedge Funds. Why ~ insider trading by Washington Elected Congressman and Senators! Therein lies the problem with our economy They benefit from stock dividends...why would they want to take easy money out of their pockets?

DaveyNC 1 year, 4 months ago

Toda, petroleum is a commodity material. Its price is affected by global demand, not just demand in little ol' Moore County. If there is one player in the global market who can affect the price of petroleum products, it is Saudi Arabia. Even their ability to do so is suspect any longer.

That price has to go up immediately because of the cost to replace it. If I buy a gallon for $3, sell it for $3.18 and while it is in the ground the wholesale price goes up to $3.38, how much should I sell that gas for? If I continue to sell it at $3.18, I will not be able to refill my tank. Which means that you won't be able to refill your tank, at least not at my gas station because I will soon go out of business.

The larger problem is that the state of NC prohibits gas retailers to alter their prices more than once per day, IIRC. So, every day there is a repricing and it looks like the price jumps rapidly. If you watch the price change on a market exchange, though, it changes by the second and you will see price changes in percentages of a penny happening constantly. Big jumps like just happened won't be so common. We would be better off if retailers could set prices according to the changing market conditions. If you come to a gas station and decide that the price displayed is too high, drive on past to the next station. Keep driving until you see a price that you like and pretty soon, all prices will match that.

It's not that hard to understand, but most people would freak out.

Back after Katrina, it was fascinating to watch people deal with this. I had to go to Burlington right after the storm when the pipeline shut down. I left home and saw gas at something like $2.80 (can't really recall exactly what it was) and when I got to Burlington an hour and a half later it was nearly $5 a gallon. Gas staions were running out of gas. So, I pulled in to one to top off my tank and to watch people drive up, check the price and move on was fascinating. It forced them to make a conscious decision that they would normally take for granted, which was, "How badly do I really need this gas?" If they really needed it, they bought. If not, they moved on. We do that all the time in a properly functioning, open market. We never do it when buying health care.

Toda 1 year, 4 months ago

DaveyNC 4 hours, 26 minutes ago

"Most of Canadian petroleum production, approximately 283,000 cubic metres per day (1,780,000 bbl/d), was exported, almost all of it to the United States.[2] Canada is the largest single source of oil imports into the United States."

As one reads, the link attached, one may find that Canada and not Saudi Arabia exports most gas to the US. http://en.wikipedia.org/wiki/Petroleu...

Secondly, "Prices are still historically high. Despite the recent drop, gas prices remain historically high. Given higher costs for most things other than fuel, this surely dampens relief for consumers." Hedgefunds' impact on pump prices...http://finance.fortune.cnn.com/tag/gas-prices/

Read this website and raise your blood pressure. http://www.mybudget360.com/gas-prices-going-up-and-bailing-out-a-hedge-fund-why-the-average-american-is-getting-bailout-fatigue-talf-a-bailout-for-corporations-under-guise-of-lending-for-average-americans/

"Since the bottom, a barrel of oil has increased by 13 percent while the average gallon per gas has jumped by 20 percent. So what is happening is refiners have cut back at $40 a barrel for oil and supply and demand have adjusted to keep gas prices up. So this supposed relief is a drop in the bucket for most Americans. Another disturbing move is the so-called TALF program which is supposed to increase credit for consumers:"

"The funds and other large investors increased net long positions, or wagers on rising prices, by 26 percent in the seven days ended July 5, according to the Commodity Futures Trading Commission’s Commitments of Traders report. It was the biggest gain since the week ended Oct. 5."

"“Speculators found it irresistible,” said James Cordier, portfolio manager at OptionSellers.com in Tampa, Florida. “There was a long break in prices in the middle of gasoline season and they piled back in.”

Here's your link: http://fuelfix.com/blog/2011/07/11/hedge-funds-raise-gasoline-bets-as-prices-slide/

Toda 1 year, 4 months ago

The State acting like a surogate Hedgefund ripping North Carolinian's off at the pump. by Tommy Davis

Toda 1 year, 4 months ago

DaveyNC => "If you watch the price change on a market exchange, though, it changes by the second and you will see price changes in percentages of a penny happening constantly. Big jumps like just happened won't be so common."

Hedgefunds really don't function that way. They deal in millions of shares on the commodity markets. In the US and overseas. They control prices at the pump in real time. Most are overseas investment groups like the Saudi's. China has a huge influx in the commodities trade.

As I've stated before, Hedgefunds are not regulated by any agency. Matter of fact, no one really knows who is in or who is out when it comes to investors. It's been that way since groups started hedging against market failures. Mortgages was a primary example of Hedgefunds betting on colapse of the Home Mortgage Market. And they won ~ big time!

DaveyNC 1 year, 4 months ago

For every hedge fund making a buck on the price of a commodity, there is someone on the other side of that trade losing money. Probably another hedge fund. And by the way, 2011 was one of the worst years ever for hedge funds: http://goo.gl/Bp107 Not exactly the Masters of the Universe.

Toda, you are tilting at windmills here. There is no single market player capable of manipulating the petroleum markets, not for any significant period of time anyway.

Not sure that I understand this sentence you wrote: "Hedgefunds really don't function that way. They deal in millions of shares on the commodity markets. In the US and overseas. They control prices at the pump in real time. Most are overseas investment groups like the Saudi's. China has a huge influx in the commodities trade."

Whether a hedge fund deals in millions of shares or not, it is still a drop in the bucket of oil that is the global market. But where you lose me is when you talk about how the hedgies deal in millions of shares, they "control prices at the pump in real time." Huh? How do they do that, especially when the law prevents that very thing?

And only a few hedge funds made money on the collapse of the home mortgage market. Quite a few others folded or their parent companies got bailed out (Goldman Sachs, Bank of America, etc.) I recommend "The Big Short" by Michael Lewis http://www.amazon.com/Big-Short-Inside-Doomsday-Machine/dp/0393072231/ref=cm_lmf_tit_1 and "The Quants" by Scott Patterson http://www.amazon.com/Quants-Whizzes-Conquered-Street-Destroyed/dp/0307453375/ref=cm_lmf_tit_16

There you will learn that the main reason for the financial collapse was really hubris, not some nefarious plot to destroy Main Street while the greedy speculators lined their pockets.

Toda 1 year, 4 months ago

Davey ~ I must admit that I am really impressed with your last thread. You do some research and have the ability to carry on a civil debate. Impressed! Let me shed some light on Hedge Funds:

Whether a hedge fund deals in millions of shares or not, it is still a drop in the bucket of oil that is the global market. But where you lose me is when you talk about how the hedgies deal in millions of shares, they "control prices at the pump in real time." Huh? How do they do that, especially when the law prevents that very thing?

First Hedge Funds are not regulated as with other stocks, bonds, and investment portfolios. Here's how a typical HF works. Let's say you and I have interest in controlling corn futures on a broad scale. We would contact companies trading in the futures market on corn. We want to "stabilize" a vacillating market ~ highs and lows ~ so we "ask" those investment firms - not investors, to borrow all of their shares and will in turn pay them par. That way they won't loss any more money because with their shares and millions of others, we can stabilize the market. So, we borrow those 100 million shares, the price goes up and we sell of those shares at $1.00 per share over par. Now the investment firms get their shares back with an increased value, and we made 100 million dollars in a few days. That's how it works.

Hedge Funds don't borrow or trade shares with other HF's. That would be like Ford and GM trading cars when one is running low on inventory.

One Hedge Fund during the mortgage collapse borrowed investment cash from an Illinois State Employee retirement account. http://www.financialsuccessinstitute.org/self-directed-401k/self-directed-ira-how-not-become-wealthy/

When the mortgage bubble burst because of default swaps traded as derivatives and worthless paper, the Hedge Funds didn't really lose any money, it was other peoples money. In the case of the ISE, it was their loss through their managing fund managers and not the HF. I hope this explains it a bit better.

DaveyNC 1 year, 4 months ago

Toda, you speak of Hedge Funds as if they are a single monolithic entity. They're not. They don't always make money, especially this past year and they fail all the time: http://www.investopedia.com/articles/mutualfund/05/HedgeFundFailure.asp#axzz1iJgQhiK9

So what happens if we borrow those 100 million shares and the price goes down? We lose, unless we are short the stock or have properly hedged the trade.

Of course hedge funds borrow or trade shares with other HF's. Who do you think is on the other side of their trades? A share of a company is completely fungible, no different than another share of the same company. A Ford car and a GM car are entirely different and clearly not the same product.

Our financial system would be safer if all the players behaved more like hedge funds. Quantum Funds and Renaissance Technologies and Citadel must govern their activities more closely than Goldman Sachs and AIG and JP Morgan because they will not get bailed out by the government if they screw up. Goldman, et al, know they will be bailed out and so they behave accordingly by taking risks that Quantum won't. Just see the massive failures at the link that I provided above.

The link you provided is suspect. It goes to a website that is primarily there to sell its own investment products. Not exactly unbiased or impartial.

Toda 1 year, 4 months ago

"Most of the hedge fund fatalities discussed here occurred at the onset of the 21st century and were related to a strategy that involves the use of leverage and derivatives to trade securities that the trader does not actually own."

Davey this quote is exactly what I'm talking about. HF's don't always own the stock they are trying to leverage. Those brokerage firms who listed above, lost investors money and not their own. Not one investment firm will guarantee that your money they invest will be produce a return. When the bet the entire bank on derivatives, trading as worthless paper as in the mortgage fiasco, they go out of business.

The link I provided was an organization Financial Success Institute .org not a .com company. The site lends credence to how HF's can use IRA's and retirement accounts in a highly speculative market. And how easy investments can be lost when packaged as leverage against the market.

Believe it or not, Congressman are the only people in the US who can do insider trading and it isn't illegal. They invest heavily in commodities that HF's have an interest. They rake in millions.

"So what happens if we borrow those 100 million shares and the price goes down? We lose, unless we are short the stock or have properly hedged the trade."

If we corner the entire market, then there are no more shares to buy by brokerage houses. The value will increase - as did mortgage loan bundles. The difference the mortgages was insured under full faith and credit by the US government. In the '70's Bunker Hunt bought all the silver he could acquire driving the price of silver up by 300%. Had he sold, he could have made more millions at 3 times his investment. I think the 100 million shares would in fact hedge the value of corn in the market.
http://www.silvermonthly.com/bunker-hunts-attraction-silver-history-cornering-silver-market/

Toda 1 year, 4 months ago

Amazing how Aberdeen/Southern Pines is considered a Resort by the gas distributors.

On our way back from UNC Chapel Hill yesterday (1-3-12), I stopped in Tramway and filled up with $3.24 a gallon gas. When we got back to A/SP, it was $3.44, a meager 20 cents a gallon higher. I now alternate cars when driving to UNC-CH so I can keep both cars topped off with less expensive gas. Since local retailers are so proud of their price differences, perhaps they can keep it and sell less.

Toda 1 year, 4 months ago

My trip to UNC Chapel Hill today (1-6-12) reveled a smorgasbord of prices along US 1 North and through Pittsboro.

Starting in S/AB prices were not the highest. Tramway was $3.41, Pittsboro, $3.39, and just outside Chapel Hill, a whopping $3.50 to $3.51. Poorer county was in the middle at $3.43 to $3.44. As it stands now, the best prices are in Pittsboro....until my next trip.

Toda 1 year, 3 months ago

The ongoing saga of rising gas prices continues. Just outside of Pittsboro yesterday (2/22) prices ranged from $3.65/9 to $3.71/9. Prices have increased on an average of .30 cents a gallon in a month. Predictions are for over $4.00 a gallon by July. Happy Fourth!

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