Word: oils
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Dates: during 1970-1979
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...worst offender is the so-called entitlements program. It was set up under Gerald Ford in 1974 to equalize the burdens of surging import prices between refineries that depend on expensive foreign oil and those with supplies of low-cost domestic petroleum. The complex program works this way: for every barrel of domestic crude that a refinery processes, the company must make a payment into an entitlement pool. The payment raises the price of each barrel of domestic oil halfway up to the cost of more expensive OPEC crude. At the same time, any refinery that imports costlier OPEC crude...
...imports. Energy Secretary James Schlesinger is probably too pessimistic when he warns that a severe global supply squeeze could come as early as the mid-1980s, but the nation will be in increasing jeopardy anyway. The threat is not that some day soon there will be much too little oil, but that consumers will have to pay ever more extortionate prices to get it. Says Guido Brunner, the Common Market's energy commissioner: "We have to realize that the age of cheap energy has come to an end, not because of diminishing supplies but because of OPEC's production policies...
...source, OPEC oil is cheaper than dirt. The cost of drilling, pumping and moving it from the Saudi Arabian deserts to Persian Gulf ports, for example, is about 30? per bbl. That is less than 1? per gal, since there are 42 gal. in one barrel. But by the time the crude is shipped, refined and sold as gasoline to U.S. motorists, the price rises more than...
...barrel of oil can be refined into about ten different products, including 20 gal. of gasoline and 10 gal. of home heating oil. Of the two, heating oil is less expensive to make, and the oil majors spend little on advertising and transporting it. They sell this oil at about 48? per gal., a 14? markup, to wholesalers. These middlemen then sell it to retail dealers. Partly because the wholesalers pay for storage and the dealers pay for advertising and home delivery, they collectively add 14? to the final retail price of about...
Because gasoline costs more to refine, and the companies spend more to advertise and deliver it right to the pump, they sell it for 54.4? per gal., a markup of 20.4?. Unlike heating oil, gasoline is heavily taxed; federal, state and local taxes add 13.2? per gal. The service station tacks on an average 9.7? per gal., to bring the cost up to the national average...