## Oil Prices

From James MulvaCEO, ConocoPhillips:

Now, if you look at gasoline prices at the pump -- let us say around $3 a gallon -- 60 percent of that$3 is tied to oil prices. So take $3 gasoline, the price at the pump, that is$1.80. Then, on top of that $1.80, there's about 60 cents which is the cost of bringing the crude oil to the refineries, running the refineries, the pipelines, the transportation, and the marketing. On top of that, then there's 50 cents of taxes. So you add and you get to$2.90. Our profit on a \$3 gasoline price at the pump is about 10 cents a gallon, and that's in good times. In times when the price is lower or there's more supply, then the price is less than 10 cents -- profits less than 10 cents.

People who see the Oil Companies as evil are quick to point out profits in terms of dollars. But these large profits are due to the size of the industry. On a per-dollar of sales basis, these profits do not seem great to me. Government profit is five times as much. Perhaps it is the government that is gouging?

P.S. Michelle Malkin is reading my mind.