Here's a letter to the editor I submitted to a local weekly paper about this very subject.
(BTW, a little background: there is no Mayor Duke H. Norman. He's a fictional character they made up to write little editorial tirades on the issue. I played along a bit. They also like publishing long letters, something I really like about them.)
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In response to, "When will we get our 'fill' of high gasoline prices and do something?" on 12 May 2004:
Y'know, I think I saw Mayor Duke H. Norman at the Citgo the other day waving his arms and cursing the high gasoline prices. I couldn't tell for sure, though, because I was too busy waving my arms and cursing the high gasoline prices. Then I read his editorial in news@norman. Believe me, I feel his pain and anger, but I think it's directed at the wrong people. He says the high gas prices are because "the big oil companies are ripping us off." I think there's a different group of ripoff artists to blame.
He cites that Citgo's profits are expected to grow between 30-40% this year. The truth is, according to the Houston Chronicle ("National Earnings: Citgo suffers big profit drop," 4 May 2004), Citgo's profits for the first quarter of 2004 fell 75%. A 30-40% growth would be only half of what they need to make this up. And the $5.44 billion in ExxonMobil profits he made such a big deal of, only amounts to about 5¼¢ for every gallon of gas in profits according to SmartMoney.com (by the way, ExxonMobil's profits dropped 23% in the first quarter). It hardly sounds to me like that's being "ripped off."
Where I feel ripped off is by the entity that represents the single largest line item in gasoline costs: government. Government motor fuel taxes currently represent 42.7¢ per gallon. That's over eight times as much as ExxonMobil is making in profits!
Gasoline prices affect us all, and not just from what you put into the pump. Pretty much everything you consume was put on a truck at one point or another, so the prices of shipping (which would include fuel costs) are included in the price of the good. Their recent rise is not due to the oil companies cutting production, because the oil companies haven't cut oil production--in fact, they've increased it over 4% in the first quarter. It's due to increased demand. We're consuming more. The oil companies don't have much choice.
But the government does. In a survey conducted by the John Locke Foundation, the tax burden was cited by North Carolina's business leaders as the #1 impediment to economic growth in the state. That's all taxes, including the ones that cause minor myocardial infarctions upon seeing prices at the gas pump. It hits you on the way to work. It hits you at the supermarket because those goods needed gasoline to be shipped. It hits you at the video stores, the restaurants, the hospitals, and the schools.
It's the cost of all that government "help" that never seems to do any good, that never seems to make us safer or better educated, and that certainly doesn't make us richer. We need smaller government in order to reduce the tax burden and help us prosper. And we need it NOW.
