Is the government making a killing off of higher oil and gas prices?

My ditto-head friend was telling me the other day that the government was the one making a killing off of the high prices, and the oil companies less so. Of course, I'm sure he got this off of one of the right wing radio shows, sounds like classic Glenn Beck to me. I never understood his reasoning, especially since the government sent me $600 recently to compensate. I can't see how higher prices is good for government. Does anyone know what he was talking about?Is the government making a killing off of higher oil and gas prices?
No, he doesn't. He, like many others focus on the profits made from gasoline sales at the pump.





They fail to account for the additional 40-55 cents per GALLON made in the refining process and the obscene amounts being made by speculation.Is the government making a killing off of higher oil and gas prices?
Very true and its a simple reason. Profit margins. If they make only 10%, wouldn't they be more interested in making 10% of $4.00 rather than 10% of $2.00? So they help manipulate the price right along with commodities market speculators. Report Abuse

Taxes on fuel are assessed and collected on a cents per gallon basis so it doesn't have anything to do with the price.





However, income tax revenue from the oil producing companies is up, because drilling costs, which have risen as fast as oil prices, are not expensed as incurred, but rather are capitalized, increasing taxable income to a level way above actual cash flow.





Meanwhile, if the E+P companies use a contract driller, or lease their drilling equipment, the oil services firm's return is taxable income even though those costs can't be expensed right away by the E+P company.





So, in that respect the government does get a bit of an arbitrage.





But I doubt that the idealogues on either the extreme right or left understand that.
There are members of the government who have ties to the industry; those people are getting rich beyond their wildest dreams! But the government ITSELF is actually being hurt by the high prices; people are driving less and buying less gas, therefore, the government is collecting less tax money.
Yes. The oil company is making less that 10 cents per dollar. The Federal government is taking around 18 cents per dollar....When people talk about ';obscene profits,'; they conveniently ignore the profit margin. The profit margin of petroleum has stayed relatively the same for a long time now.
The government collects a federal tax off of every gallon of gas sold. With gas prices as high as they are, it is causing people to drive less which uses less gas which means less taxes being collect. Consequently, the government is making less money due to the high prices.
some bureaucrats and politicians are making a killing off the high price of gas at the pumps . i can name a few G.W. BUSH ,DICK HEAD CHENEY , and all those Neocon's who think they can control the world oil revenue around this world of our by bombing Innocent oil rich countries .
People in government may be making a killing, but the government is making only as much more money as oil is being pumped. Their tax is per barrel or gallon, minimal, and far outweighed by the amount of money they spend in subsidies to the oil companies.
Probably the Politicians have the Oil Companies in their Retirement Portfolio. OF COURSE the Government is making a killing. You should really listen more to Glen Beck as he does report what is ACTUALLY happening, unlike our major Media.
Yes, they say oil companies only make 4 cents on the dollar (which I find hard to believe) while the government makes 18 cents on the dollar.
Most taxes are in cents per gallon but some are percentage based (it varies by state). As a result, when the price goes up so do the taxes.