UPDATED: Maybe this is wrong, but…
September 17th, 2008I posted this over at peoriaspeaks.com’s forums:
Based on the tax information from this page, plus the highest prices at the pump or per barrel, I’ve made this little worksheet:
Quote
$147 highest price per barrel
$4.30 highest average price per gallontotal gas tax: $0.405
sales tax percentage: 8%minus gas tax: $3.895
minus sales tax where 1% is $0.03895 and 8% sales tax is $0.3116: $3.5834Current price per barrel: $97
Price percentage drop from $147ppb where 1% = $1.47: 34%Current price per gallon: $3.95
Minus gas tax: $3.545
Minus sales tax where 1% is $0.03545 and 8% sales tax is $0.2836: $3.2614Old gas price after taxes: $4.30 per gallon
New gas price after taxes: $3.95 per gallonOld gas price before taxes: $3.8950
New gas price before taxes: $3.2614What gas prices should be before taxes: $2.5707
What gas prices should be after sales tax, where 1% = 0.25707 and 8% = $0.205656: $2.776356
If we’re going by the market, gas prices should be, including taxes, around $3.20 per gallon. That would more accurately reflect a 34% drop in market prices.
Basically, what I did was worked based on the $4.30 per gallon/147 per barrel price. First I took our $0.405 gas tax out of the picture, then took the 8% sales tax out of the remainder. I deducted 34% from the total of that price, then added 8% and $0.405 to that.
My exact figure was $3.23 per gallon.
Now, the math isn’t perfect, since I took the percentages based on the after-tax price. The problem with that is, for instance, if you take 8% out of 100, you end up with 92. But if you take 8% of 92, then add it back to 92, you don’t end up with 100, but pretty darn close. It’s off, but the difference is not chaos-theory scale. I’d say the margin of error for my total is no more than 10 cents.
Ollie, wanna check this? I did do pretty shitty on my math placement test.
What I didn’t know is that my co-worker was running the same calculation as to what the price *should* be based on entirely different numbers. Instead of starting with peak prices and working backwards (like I did), what he did was take the wholesale price, which includes crude costs and refining costs, then added the cost of distribution and delivery. Onto that total he added taxes and ended up with: $3.21 per gallon.
Prices today were $3.95 per gallon. Doesn’t take a math whiz to figure out something’s wrong.
Supply hasn’t been impacted nearly enough by hurricanes to justify the recent spike in prices, and demand, as far as anyone can tell, has remained steady. So c’mon Conservatives: what gives? Crooks.
============================== UPDATE!
BJ Stone mentioned something that made me wonder: what were prices like the last time crude was selling for $97/barrel? I decided to look.
According to MSN, crude oil hit $97 per barrel on 11/6/2007. According to the Department of Energy, the average retail price of a gallon of gasoline was around $2.90 during the same time. They put it in this nice little chart:
The cost approaches the numbers I reached when you factor in the higher cost the Midwest seems to suffer regularly, plus the potential impact of taxes. Dirty, gouging bastards.




