Fuel Costs Affecting Boaters

Good morning all,

Do you think politics has an affect on us boaters? Read on.

The cost of fuel is affecting the boating industry. Buyers are hesitating to purchase because of the uncertainty of these costs. Used trawlers and sailboats however, are more popular than ever due to their low-fuel consumption.

We hear in the news where want-too-be presidential candidates advocate taxing the profits of big oil. The oil companies are making too much money at the expense of the little guy out there. They want to redistribute those profits to others. That's the most absurd thing I've ever heard.

Why don't we tax Microsoft or McDonald's profits? They have a greater margin than the oil companies.

Taxes are not paid by corporations, you the consumer ultimately pays the cost. Don't let some Washington politician tell you otherwise.

Let's take a look at the cost of producing a gallon of fuel and the profits made from that.

Recent Reported Profit Margins

ExxonMobil - 9.4%
Connaco - 6.9%
BP - 8.4%
McDonald's - 12.0%
Microsoft - 31.6%
GE - 11.4%

Sources: Standard & Poor's Capital IQ
Source: Reuters Fundamentals

The cost to produce 1 gallon of fuel is broken out as follows. Value expressed in % of total cost to produce each gallon.

Crude Oil - 53%
Federal/State Taxes - 19%
Refining/Profits - 19%
Distribution - 9%

So, given these factors, here is the breakdown of one $3.35 gallon of fuel purchased at your local Exxon station.

Cost of Crude Oil - $1.77
Federal/State Taxes - $.63
Refining - $.33
Profits - $.31
Distribution - $.30

Source: US Department of Energy

I see clearly where our problems are! Do you? Try Middle Eastern crude and taxes paid on the fuel. Those account for the two largest pieces of the cost.

Tell you elected officials to cut taxes, start drilling in own own oil fields, and let the free market take care of itself.

Mike

PS: I just sent President Bush, my two Senators and Representative a copy of this posting! Feel free to do the same.