What Mexico can teach Joe Biden about gas prices

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
LOL..... A super lefty invests in oil and gas.............

https://www.washingtonexaminer.com/...t-mexico-can-teach-joe-biden-about-gas-prices

On average, gas is over $1 a gallon cheaper in Mexico ($3.12) than it is in the U.S. ($4.60). The gap is even larger between Mexico and Democrat-controlled states such as California ($5.99).

“We have decided that it was necessary for us to allow Americans who live close to the border to go and get their gasoline on the Mexican side at lower prices,” Lopez Obrador told Biden. “And right now, a lot of drivers, a lot of Americans are going to Mexico to get their gasoline.”

Mexico’s oil industry is far from perfect. It was nationalized into one government-run company, Pemex, in 1938. Like any government-run company, it has been riddled with corruption and mismanagement ever since.

But what Mexico understands, and Biden and the Democratic Party do not, is that you have to invest in oil and gas infrastructure if you want to improve refinery capacity and bring down the cost of gasoline.

The U.S. hasn’t built a new refinery since 1976. Mexico, on the other hand, not only just bought a refinery in Houston for $596 million, but it is also building a brand new one in the Mexican state of Tabasco for $8 billion. Another $3 billion is slated to modernize six other Mexican refineries.

Meanwhile, here in the U.S., environmental regulations make it impossible to invest in refinery modernization.

Instead of adding refinery capacity every year, Biden’s America is taking refinery capacity offline. This means that as long as the Democrats are in power, the gap between the cost of gas in Mexico and the U.S. will only grow.
 

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
LOL..... A super lefty invests in oil and gas.............

https://www.washingtonexaminer.com/...t-mexico-can-teach-joe-biden-about-gas-prices

On average, gas is over $1 a gallon cheaper in Mexico ($3.12) than it is in the U.S. ($4.60). The gap is even larger between Mexico and Democrat-controlled states such as California ($5.99).

“We have decided that it was necessary for us to allow Americans who live close to the border to go and get their gasoline on the Mexican side at lower prices,” Lopez Obrador told Biden. “And right now, a lot of drivers, a lot of Americans are going to Mexico to get their gasoline.”

Mexico’s oil industry is far from perfect. It was nationalized into one government-run company, Pemex, in 1938. Like any government-run company, it has been riddled with corruption and mismanagement ever since.

But what Mexico understands, and Biden and the Democratic Party do not, is that you have to invest in oil and gas infrastructure if you want to improve refinery capacity and bring down the cost of gasoline.

The U.S. hasn’t built a new refinery since 1976. Mexico, on the other hand, not only just bought a refinery in Houston for $596 million, but it is also building a brand new one in the Mexican state of Tabasco for $8 billion. Another $3 billion is slated to modernize six other Mexican refineries.

Meanwhile, here in the U.S., environmental regulations make it impossible to invest in refinery modernization.


Instead of adding refinery capacity every year, Biden’s America is taking refinery capacity offline. This means that as long as the Democrats are in power, the gap between the cost of gas in Mexico and the U.S. will only grow.

If Mexico has such a crappy oil industry, why does it pay less for gas than we do?
 

interrobang

Well-Known Member
Aug 21, 2016
23,243
34,634
1
The reason refineries haven’t been added in the US is because of the companies that run them, not the US government.

The government that makes land acquisition for a new refinery laborious? The government that makes EPA permitting a lengthy pain in the ass process? The government that cyclically wants to get rid of gasoline?

Why sink billions into new refineries (that really aren't overly profitable in and of themselves) when you don't even know if you'll ever be able to make that money back?

Chevron's CEO even said as much in a recent interview.
 

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
The government that makes land acquisition for a new refinery laborious? The government that makes EPA permitting a lengthy pain in the ass process? The government that cyclically wants to get rid of gasoline?

Why sink billions into new refineries (that really aren't overly profitable in and of themselves) when you don't even know if you'll ever be able to make that money back?

Chevron's CEO even said as much in a recent interview.

Dude - the refineries are making big time money right now, do you think they would want to invest in additional capacity? Fvck no. Building a big refinery will cost $10B and the ROI will be 10-20 years and oil companies struggle with those types of decisions when it’s going to hurt their profit margin. I’m not sure what part of capitalism you don’t understand, but oil companies do what’s in their best interests, not what’s best for the countries. The bitching about “the government” being the reason why there have been so little investment in refineries over the last 4 decades is a big charade and frankly quiet tiresome.

The oil industry could build 4-5 refineries with the profits it made in Q1 alone.
 

psuted

Well-Known Member
Gold Member
Nov 26, 2010
28,441
24,664
1
If Mexico has such a crappy oil industry, why does it pay less for gas than we do?
Mexican government encourages and subsidies the price of gas rather than heaping heavily abusive government imposed taxes on it. They also don’t demonize the oil industry like the left wing nut jobs always do here in the USA.
 
  • Like
Reactions: bison13 and bdgan

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
Mexican government subsidies the price of gas rather than heaping heavily abusive government imposed taxes on it. They also don’t demonize the oil industry like the left wing nut jobs always do here in the USA.

So why are we better off our 100% privatized oil industry?
 

psuted

Well-Known Member
Gold Member
Nov 26, 2010
28,441
24,664
1
So why are we better off our 100% privatized oil industry?

Because the government doesn’t have any business getting into the oil business and one way or the other, citizen will have to pay the price, which would be even considerably higher if it wasn’t for privatized oil. Privatized oil and competition is MUCH more efficient than the government at doing anything and the government should not be making more money by taxation on oil than the oil companies make themselves. Additionally, oil prices would be a lot less even in America if the government would get out of the way at imposing ungodly and highly counterproductive regulations and laws on the oil industry.

Besides, and under the “green energy” extremists like Biden and the Democrats, there wouldn’t be an oil industry at all and we would really experience an economic disaster.
 
Last edited:
  • Like
Reactions: brupsu and Sullivan

bdgan

Well-Known Member
May 29, 2008
62,022
39,030
1
Mexican government encourages and subsidies the price of gas rather than heaping heavily abusive government imposed taxes on it. They also don’t demonize the oil industry like the left wing nut jobs always do here in the USA.
Royal owned again
 
  • Like
Reactions: m.knox and psuted

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
Because the government doesn’t have any business getting into the oil business and one way or the other, citizen will have to pay the price, which would be even considerably higher if it wasn’t for privatized oil. Privatized oil and competition is MUCH more efficient than the government at doing anything and the government should not be making more money by taxation on oil that the oil companies make themselves. Additionally, oil prices would be a lot less even in America if the government would get out of the way at imposing ungodly and highly counterproductive regulations and laws on the oil industry.

Besides, and under the “green energy” extremists like Biden and the Democrats, there wouldn’t be an oil industry at all and we would really experience an economic disaster.

A country that nationalizes its oil supply still hires someone like Exxon to extract and refine the oil. The key differences is who makes the decision about how much oil gets pumped and how much they charge customers for it. In the US, we’ve left it up to big oil, whose goal is to charge customers as much as possible and now we sit around and bitch about how much we pay for gas. Our country is dumb as shit.
 

psuted

Well-Known Member
Gold Member
Nov 26, 2010
28,441
24,664
1
A country that nationalizes its oil supply still hires someone like Exxon to extract and refine the oil. The key differences is who makes the decision about how much oil gets pumped and how much they charge customers for it. In the US, we’ve left it up to big oil, whose goal is to charge customers as much as possible and now we sit around and bitch about how much we pay for gas. Our country is dumb as shit.

I stand by my response. Nationalized oil would be a disaster and to leave that up to a bunch of environmental ideologues and extremists, rather than basic supply and demand is pure Socialism.

The key differences is who makes the decision about how much oil gets pumped and how much they charge customers for it”. This statement is exactly what this country doesn’t need Creepy Joe and the wacko green environmentalists in charge of these decisions. More government control over our life. No thanks. .
 
Last edited:

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
The reason refineries haven’t been added in the US is because of the companies that run them, not the US government.

Don't be a dumbass. I know it is hard. Much like the Keystone Pipeline, the US government has full control of what gets built and what doesn't.

https://www.reuters.com/article/environment-usa-congress-refineries-dc-idUSN1347190620070613

https://www.epa.gov/enforcement/petroleum-refinery-national-case-results

Can the US build new oil refineries?


New refineries are unlikely to be built in the United States due to daunting environmental standards and policies that the Biden administration has been implementing to reduce petroleum product consumption in the future. Shockingly high prices for energy is the outgrowth of those policies.

Jun 13, 2022
 

psuted

Well-Known Member
Gold Member
Nov 26, 2010
28,441
24,664
1
Don't be a dumbass. I know it is hard. Much like the Keystone Pipeline, the US government has full control of what gets built and what doesn't.

https://www.reuters.com/article/environment-usa-congress-refineries-dc-idUSN1347190620070613

https://www.epa.gov/enforcement/petroleum-refinery-national-case-results

Can the US build new oil refineries?


New refineries are unlikely to be built in the United States due to daunting environmental standards and policies that the Biden administration has been implementing to reduce petroleum product consumption in the future. Shockingly high prices for energy is the outgrowth of those policies.

Jun 13, 2022

Exactly, big government is the problem and not in anyway a solution to the problem. As usual, big intrusive government needs to get the hell out of the way.
 
  • Like
Reactions: GSPMax and Sullivan

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
Chevron's CEO even said as much in a recent interview.

He most certainly did....

a letter to president biden from chevron CEO mike wirth​


https://www.chevron.com/newsroom/2022/q2/a-letter-to-president-biden-from-chevron-ceo-mike-wirth

While today’s geopolitical situation is contributing to this energy crisis, bringing prices down and increasing supply will require a change in approach. You have called on our industry to increase energy production. We agree. Let's work together. The U.S. energy sector needs cooperation and support from your Administration for our country to return to a path toward greater energy security, economic prosperity, and environmental protection.

We need clarity and consistency on policy matters ranging from leases and permits on federal lands, to the ability to permit and build critical infrastructure, to the proper role of regulation that considers both costs and benefits. Many of these elements are described in our industry’s recently released 10-point plan. Most importantly, we need an honest dialogue on how to best balance energy, economic, and environmental objectives – one that recognizes our industry is a vital sector of the U.S. economy and is essential to our national security.
 
  • Like
Reactions: Sullivan

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
Don't be a dumbass. I know it is hard. Much like the Keystone Pipeline, the US government has full control of what gets built and what doesn't.

https://www.reuters.com/article/environment-usa-congress-refineries-dc-idUSN1347190620070613

https://www.epa.gov/enforcement/petroleum-refinery-national-case-results

Can the US build new oil refineries?


New refineries are unlikely to be built in the United States due to daunting environmental standards and policies that the Biden administration has been implementing to reduce petroleum product consumption in the future. Shockingly high prices for energy is the outgrowth of those policies.

Jun 13, 2022

Is it profitable to run a refinery? Yes
Does the oil industry have the capital? Yes

What’s the problem? Simple. The oil industry risks its existing oil refinery profit margin (by increasing competition) if it adds refinery capacity.
 

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
Dude - the refineries are making big time money right now, do you think they would want to invest in additional capacity? Fvck no. Building a big refinery will cost $10B and the ROI will be 10-20 years and oil companies struggle with those types of decisions when it’s going to hurt their profit margin. I’m not sure what part of capitalism you don’t understand, but oil companies do what’s in their best interests, not what’s best for the countries. The bitching about “the government” being the reason why there have been so little investment in refineries over the last 4 decades is a big charade and frankly quiet tiresome.

The oil industry could build 4-5 refineries with the profits it made in Q1 alone.

BIG TIME MONEY!!!!

There you go again confusing the unit of measure of $ and %....... It's so very disingenuous.

XOM profit margins.

March 2022: 6.23%
December 2021: 10.7%
September 2021: 9.36%
June 2021: 7.07%

Coming off the worst quarter in a year.
 
  • Like
Reactions: Sullivan

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
Is it profitable to run a refinery? Yes
Does the oil industry have the capital? Yes

What’s the problem? Simple. The oil industry risks its existing oil refinery profit margin (by increasing competition) if it adds refinery capacity.

LOL.... If we are going to talk theory, they could make more by selling more. Clearly America's appetite to get up go has created a ton of demand. They will forever miss those sales.
 

psuted

Well-Known Member
Gold Member
Nov 26, 2010
28,441
24,664
1
Is it profitable to run a refinery? Yes
Does the oil industry have the capital? Yes

What’s the problem? Simple. The oil industry risks its existing oil refinery profit margin (by increasing competition) if it adds refinery capacity.

The oil industry won’t invest in adding new refinery capacity in this country, even through demand would normally justify doing so, if big government vilifies the entire industry with the mission of putting them out of business entirely. Under that reality, any executive in their right mind could never justify their investment (short term or long term) as their pay back wouldn’t be justifiable. It’s as simple as that. Big government control is the enemy of the people.
 
  • Like
Reactions: bdgan

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
BIG TIME MONEY!!!!

There you go again confusing the unit of measure of $ and %....... It's so very disingenuous.

XOM profit margins.

March 2022: 6.23%
December 2021: 10.7%
September 2021: 9.36%
June 2021: 7.07%

Coming off the worst quarter in a year.

You clearly don’t understand XOM’s business. They make 80% of their revenues off of “downstream” activities, like refining and distribution. These businesses are relatively margin constrained businesses because they buy oil at market rates. In other words, COGS, which makes up the vast majority of the costs that Exxon has, is going to rise in line with their revenue. In normal years, they will make ~20% gross profit margin and this year is no different. What Exxon celebrates if when the price of oil is through the roof because they will bring in huge dollars. Exxon looks at cash flow from operations rather than profit margin.
 

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
We have one of the lower energy prices in the world.

You suck at this.

Actually, that’s not even remotely true mouth breather. If you look at the largest oil producers in the world, their citizens almost always pay a fraction of what we do in the US. Countries that don’t have large reserves of oil have to pay the market rate and often times the government taxes gasoline to a degree that the price is higher than the US. When you compare us to other top oil producers, we’re getting absolutely butt fvcked.
 

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
The oil industry won’t invest in adding new refinery capacity in this country, even through demand would normally justify doing so, if big government vilifies the entire industry with the mission of putting them out of business entirely. Under that reality, any executive in their right mind could never justify their investment (short term or long term) as their pay back wouldn’t be justifiable. It’s as simple as that. Big government control is the enemy of the people.

You’re 50% right Ted, which is unusually high for you. One of the key metrics that the oil industry looks as is cash flow from operations vs. capex. Regardless of government regulation, it’s very expensive (capitally intensive) to build a refinery and the cash flow is dictated by competition and the price of oil. The oil industry wants nothing more than to reduce their capex on refineries and to keep shrinking how many they have because it means higher margins and lower capex.

In fact, the number of active refineries has shrunk every year, regardless of democrat or republican leadership.


If we want to add refinery capacity, the US government will need to step in to make it happen and the oil industry absolutely does not want to have more refinery capacity in the US.
 

joeaubie21

Well-Known Member
Oct 13, 2021
1,223
725
1
Actually, that’s not even remotely true mouth breather. If you look at the largest oil producers in the world, their citizens almost always pay a fraction of what we do in the US. Countries that don’t have large reserves of oil have to pay the market rate and often times the government taxes gasoline to a degree that the price is higher than the US. When you compare us to other top oil producers, we’re getting absolutely butt fvcked.
You suck worse. Stick that middler in your butt and get lost.
 

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
Prices per gallon:

USA. 4.79
UK 8.17
FR 8.06
GER 8.80
IT 7.78
NOR 10.78
DEN 10.02
CAN 6.49

But you're correct. It's cheaper in Saudi Arabia. SMH

There are three factors. (1) are you a major producer, (2) taxes on gas, (3) is some portion of the oil industry nationalized or is it privatized.

The top oil producing countries are: US ($4.9), Russia ($3.1), Iraq ($2), Canada ($6), Saudi Arabia ($2.35)

Out of these 5 countries, only the US and Canada use a privatized model.
 

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
You clearly don’t understand XOM’s business. They make 80% of their revenues off of “downstream” activities, like refining and distribution. These businesses are relatively margin constrained businesses because they buy oil at market rates. In other words, COGS, which makes up the vast majority of the costs that Exxon has, is going to rise in line with their revenue. In normal years, they will make ~20% gross profit margin and this year is no different. What Exxon celebrates if when the price of oil is through the roof because they will bring in huge dollars. Exxon looks at cash flow from operations rather than profit margin.

You've said absolutely nothing to advance your argument. In fact, you helped mine.

BTW, 20% gross margin is low.

I'm pretty sure profit margin is more important to the owners of XOM than cash flow.
 

bdgan

Well-Known Member
May 29, 2008
62,022
39,030
1
There are three factors. (1) are you a major producer, (2) taxes on gas, (3) is some portion of the oil industry nationalized or is it privatized.

The top oil producing countries are: US ($4.9), Russia ($3.1), Iraq ($2), Canada ($6), Saudi Arabia ($2.35)

Out of these 5 countries, only the US and Canada use a privatized model.
Deflect
 
  • Like
Reactions: Hotshoe

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
You've said absolutely nothing to advance your argument. In fact, you helped mine.

BTW, 20% gross margin is low.

I'm pretty sure profit margin is more important to the owners of XOM than cash flow.

You clearly don't understand corporate finance. "You're pretty sure that XOM cares about profit margin than cash flow"

LOL. You sound like you're wet behind the ears
 

Hotshoe

Well-Known Member
Feb 15, 2012
27,388
44,364
1
You clearly don't understand corporate finance. "You're pretty sure that XOM cares about profit margin than cash flow"

LOL. You sound like you're wet behind the ears
You know nothing of anything but bullsh&t and lies. It's all you do. No one believes a word you say.
 

m.knox

Well-Known Member
Gold Member
Aug 20, 2003
108,170
62,799
1
You clearly don't understand corporate finance. "You're pretty sure that XOM cares about profit margin than cash flow"

LOL. You sound like you're wet behind the ears

Their owners most certainly care about profit margin.... You are underwater here. Give up.
 

PaoliLion

Well-Known Member
Nov 2, 2003
12,794
6,392
1
Their owners most certainly care about profit margin.... You are underwater here. Give up.

LOL, nope. You are very poorly informed. It’s like you took an intro to finance class as an undergrad and that’s the extend of your knowledge.
 
  • Like
Reactions: 2lion70

Latest posts