Price of gas $0.91 in Saudi Arabia, $0.78 in Kuwait, $1.74 in Puerto Rico (part of the USA). So how can that be?
It costs less than a dollar to produce a barrel of oil in Saudi Arabia—I know, I worked for Saudi Aramco, the Saudi oil company.
The price of crude is not driven up by speculators. It is set by collusion between the USA and OPEC.
Let’s do the math
- it’s simple
- you should be paying a little over
- a dollar a gallon!
The artificial cost of crude oil accounts for 73% of the cost of gas at the pump. Now crude is at $100 a barrel.
73% of $4.00 per gallon comes to $2.92. All the other components for your gallon of gas come to $4.00 minus that $2.92 for crude, which equals 1.08 per gallon.
Let’s not be greedy – let’s give the Saudis and the others a chance to have a decent 1000% profit. That would bring the price of crude to $10 a barrel.
The cost component of crude in a gallon of gas would then be one tenth of $2.92, or 29 cents.
Then a gallon of gas at the pump would cost $1.08 plus $0.29 = $1.37.
There you have it…
Well, except that certain oil producing countries have driven themselves so far into debt that they need the revenue to service that debt. Oil rich Saudi Arabia, needs $80 a barrel just to service it’s debt. In fact, on January 16, 2012, Saudi Arabia announced its target price was $100 per barrel to sustain its public expenditures.
Debt is the demise of capitalism.