Who Profits When You Buy Gas?

How much money does the oil company make per gallon of gas sold? Let’s find out.

For this calculation I am using ExxonMobil, since I have their 2008 annual report sitting on my desktop at the moment. In 2008, ExxonMobil had total revenues of $477.36 billion. Of that, they paid $36.53 billion in taxes (≈7.65%) and had net profits of $45.22 billion (≈9.47% margin). Using these figures, we’ll calculate the profit on the average gallon of gas sold in Washington State assuming the sale cost is $2.999 per gallon.

Assuming we buy one gallon of gas for $2.999 at an ExxonMobil gas station:

18.4¢ is paid to the Federal government in fuel taxes
37.5¢ is paid to the State of Washington in fuel taxes
I do not believe we pay sales tax on top of the fuel tax (I could be wrong), and I am assuming no additional, local taxes are added to the bill.
After these taxes are subtracted from the original $2.999 sale, ExxonMobil keeps $2.44 per gallon. They then pay an average of $0.187 in state and federal taxes on that revenue, the 7.65% calculated above. ExxonMobil will spend $2.253 per gallon in operating expenses; drilling or buying crude oil, refining the oil into gasoline, transporting to the gas station, operating the gas station, etc. That leaves the 9.47% margin calculated above, or $0.231 per gallon.

When the governments make more than three times as much per gallon of gas as the oil company does, I think we have a problem. The government isn’t doing the work, yet they are receiving the most financial benefit. I see a problem that must be corrected. And the inmates that are currently running the asylum think the "evil" oil companies aren't paying their fair share? What is "their fair share"?

Alternative Fuels

If you go to extreme measures to use less gas in your vehicle you will probably get a visit from people who are very unhappy with you. They will be very displeased that their employer isn’t making money off of your driving and will use legal power to force you to pay them. They get this legal power because of the money and influence their organizations possess. Not buying gas decreases the revenues of these organizations and they aren’t pleased from this. Which company do these people represent? Exxon Mobile? Shell? British Petroleum? Nope, think bigger.

Try the government.

Here’s a story about what happens when you try to fuel your car yourself.

And the moral of the story is: If you try to do something for your wallet the environment that isn’t forced on you by the government, they will bite you.