Search Results:
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What do oil company earnings have to do with energy security?
Answer:
It’s important to acknowledge that America’s oil and natural gas industry is one of the world’s largest and most capital-intensive industries. Companies routinely invest billions of dollars each quarter into exploration, research, development and technology.
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How much do oil companies make on each dollar of sales, and how does that compare with other business and industries?
Answer:
Because integrated oil and natural gas companies are large, their earnings are large. What’s not often reported is that oil and gas company earnings actually are well in line with the U.S. manufacturing industry, averaging about 7 cents for every dollar of sales. The latest published data for the first quarter of 2012 shows the oil and natural gas industry earned 7.5 cents on the dollar in comparison with all U.S. manufacturing, which earned 8.9 cents for every dollar of sales. When looking at net profit margins, the U.S. oil and natural gas industry ranks 114 out of 215 industries.
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If the industry is getting tax deductions, doesn’t that mean they aren’t paying their fair share?
Answer:
Absolutely not. The U.S. oil and natural gas industry pays more than $86 million every day to the U.S. Treasury in rents, royalties and income tax payments. That’s more than $31 billion a year. In 2011, the effective income tax rate for the oil and natural gas industry averaged 40.6 percent, compared to just 25.1 percent for other S&P Industrial companies.
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Oil company profits are very high; are they paying their fair share in taxes?
Answer:
The fact is, the oil and natural gas industry’s income tax expenses as a percentage of net income (before income taxes) averaged 40.6 percent in 2011, compared to 25.1 percent for other S&P Industrial companies. U.S. oil and natural gas companies pay approximately $86 million to the U.S. Treasury in rents, royalties and income tax payments every single day.
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Are oil companies inflating gas prices by not building new refineries?
Answer:
The short answer is ‘no.’ The longer explanation is that—first—oil companies do not set the price of gasoline. Because crude oil is the primary component in gasoline production, the price rises and falls with the cost of crude, which is set by supply and demand on the global commodities market. In addition to economic growth and geopolitical risks, other factors, including weather events, inventories, exchange rates, investments, spare capacity, production decisions, and supply growth, all figure into the price of crude oil and thus—gasoline prices. Gasoline prices can be impacted by government taxes, and taxes add an average 49.5 cents a gallon to the price. Of that, 18.4 cents goes to the federal government; the rest ends up in state and local government coffers. One reason gasoline prices vary by state is because taxes often do.
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How much do oil companies make on each dollar I spend on gas?
Answer:
The latest published data for the fourth quarter of 2011 shows the oil and natural gas industry earned 6.2 cents for every dollar of sales. These earnings are in line with the average of other major U.S. manufacturing industries, which earned 8.3 cents for every dollar of sales.
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Why do gas prices differ from station to station and state to state?
Answer:
Gasoline taxes collected by states vary widely, from just 26.4 cents per gallon in Alaska, to as much as 68 cents per gallon in Connecticut. In addition to excise taxes, other taxes can also apply, such as sales taxes; gross receipts taxes; oil inspection fees; county and local taxes; underground storage tank fees; and other miscellaneous environmental fees depending on the state.
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Is “Big Oil” driving up gasoline prices for profit?
Answer:
Oil companies do not set the price of gasoline. A number of factors go in to the price of gasoline—the largest being the price of crude oil. Crude oil is the raw ingredient gasoline and other fuels are made from and is bought and sold globally. The price of crude oil is determined by a number of factors—including supply and demand. In addition to economic growth and geopolitical risks, other factors—weather events, inventories, exchange rates, investments, spare capacity, production decisions, and supply growth—can figure into crude oil’s price and thus, gasoline prices.
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