I said that oil was secondary to what China was pulling out and smuggling across border to Colombia and shipped back to the mainland.
Sounds like more government involvement in private enterprise.
I’d much rather see mineral companies to make competitive bids with these
countries for minerals and skip the federal involvement.
Unless of course we are now at the point in history in that governments ( ours
or china’s ) are the answer to free markets that no longer function.
2 Likes
You don’t get it do you? Please, don’t let it stop you.
1 Like
What is the word that is the opposite of capitalism, you know the ones that get thrown around as bad yet is exactly what our government is doing when they have a stake in production?
Socialism?
But it must be the good kind of socialism, right?
2 Likes
Please explain your thinking.
1 Like
Do you people see how much of your gallon of gas goes to taxes??
Lol
The structural exchange of petroleum in this country hasn’t been free market in ages. Companies understand how high a percent of each fill up costs you in taxes so they have to keep prices lower to keep you from car-pooling.
When you factor in regulations, fines, and everything else energy is all government with a sliver of “mule work” just so the CEO’s will keep inviting these senators to the country club.
You’re basically paying off the government to enjoy free movement and travel.
3 Likes
18.4 cents to feds
20. cents to state in Texas
38.4 cents per gallon total
With gas at 2.65/gallon , that’s about 15% in tax.
I’d say 15% in taxes is a little low. But granted that doesn’t take into account
property tax discounts for refineries and things. But that probably doesn’t add
much to total tax per gallon.
That’s only the retail gas tax
Sure, why dont you provide the tax cost in production and
gives us that number ?
I’ll help you…
In short, while state and federal taxes at the pump can total over 60 cents per gallon in some states (e.g., California), the tax paid at the initial production stage is quite small in comparison.
U.S. Energy Information Administration (EIA) (.gov)
U.S. Energy Information Administration (EIA) (.gov)
Maybe someone like @rtcoog knows that tax cost ? What I’m seeing it adds is very little to overall cost per gallon. But looking forward to what you can show me.
Please show your work.
It’s about 40 cents a gallon in Texas for the state and federal excise tax.
If you’re trying to back into everything upstream of that, it’s pretty nuanced and most don’t talk in those terms. I know there have been studies and I can probably find one.
Ran through ChatGPT and it said another 20-40 cents/gallon.
But that’s an indirect estimate and not perfect. You aren’t going to find anything perfect though.
Thanks, I’d like to know…in my exhausting 45 seconds I couldn’t really find it.
Question of royalties gets kind of tricky. If an oil company pays royalties to land owner, that’s not a tax. If they pay to federal government it’s a tax ? I guess…unless you think of feds as owning the offshore stuff…? Not sure.
Amount oil companies pays for an offshore lease …is that a tax ??? I’d say no, but goes into their cost of production.
The other part that’s tricky is the oil that’s refined can come from multiple sources and not all from your state or country.
1 Like
Right, I guess for simplicity sake, we need to assume all Texas/US crude ?
I see see this too
Key Gasoline Tax Components (per gallon)
- Federal Tax: 18.4 cents for gasoline ($0.183 + $0.001 LUST fee).
- Federal Oil Production/Superfund Tax: Reinstated in 2022, this adds a roughly $0.254 per barrel tax on crude oil ($0.006/gal combined), which is typically passed on to the consumer.
Oil Production Tax (Severance Tax)
These are typically imposed on producers (not directly on the retail pump price), but they affect the base cost of fuel. For example, Texas imposes a 4.6% tax on the market value of oil produced.
So $70 barrel , or $3.22/barrel; if that yields 20 gallons of gas , 11-12 gallons of diesel, + other liquids , gas portion is say $2/20 =$0.10
Ethanol additions would be another thing to consider …
So I’m getting about $.048 to $0.50 per gallon. My conclusion is overwhelming portion of gallon of gas is not going to taxes.
Not hard to find although specific tax rate is hard
U.S. oil companies pay a combination of federal, state, and local taxes, including corporate income tax (21% federal), severance taxes on extracted resources, and property taxes on equipment/land. Key industry-specific costs include 18.5% royalties on federal land and excise taxes, though they benefit from specialized deductions like intangible drilling costs (IDCs) and percentage depletion.
[image]Institute on Taxation and Economic Policy +5
Taxes by Stage of Production:
- Drilling/Exploration (Upstream):
- Severance Tax: Paid to states based on the volume or value of oil/gas extracted.
- Property Tax: Assessed on rigs, equipment, and mineral rights.
- Income Tax: Corporate income tax applies to profits, often reduced by deductions for Intangible Drilling Costs (IDCs) and Depreciation of Tangible Drilling Costs (TDC).
- Royalties: Payments (not strictly taxes) to mineral rights owners, such as the 18.5% rate on federal lands.
- Refining/Transportation (Midstream):
- Environmental Taxes: Including the Petroleum Superfund tax ($0.18/barrel in 2026).
- Corporate Income Tax: Applied to net income.
- Retail/Distribution (Downstream):
- Excise Taxes: Federal and state excise taxes are heavily levied on fuel sales.
- Sales and Use Taxes: Applied to final consumer sales.
So not very much to overall cost to gallon of gasoline. See above for more detail
breakdown.
Thanks
Okay, it’s not easy to see…but way way way less than 40% / gallon. The big ones
really are the retail ones that are easy to find.
This is only Texas tax
- Crude Oil Production Tax: 4.6% of the market value of oil produced. A small Oil Field Clean-Up Fee ($0.00625 per barrel) also applies.
- Natural Gas Production Tax: 7.5% of the market value of gas. A regulatory fee of $0.000667 per thousand cubic feet also applies.
- Well Servicing Tax: A 2.42% tax on the gross amount charged for services related to drilling, operating, or servicing oil and gas wells.
- Local Property Taxes: Significant taxes are paid to local school districts and counties (e.g., Pecos-Barstow-Toyah ISD, Reeves County).
- Exemptions: Certain high-cost gas wells or specific, approved leases may qualify for reduced rates.
[image]Texas Comptroller of Public Accounts (.gov) +6
In 2025, the industry paid $27 billion in state and local taxes and state royalties, which helps fund schools, roads, and emergency services.
Texas Oil & Gas Association +1
Did you not read the break down analysis I did for you on that one ?
Oil Production Tax (Severance Tax)
These are typically imposed on producers (not directly on the retail pump price), but they affect the base cost of fuel. For example, Texas imposes a 4.6% tax on the market value of oil produced.
So $70 barrel , or $3.22/barrel; if that yields 20 gallons of gas , 11-12 gallons of diesel, + other liquids , gas portion is say $2/20 =$0.10
Minimal amount in $0.10/gallon ball park.
And you left this part out in the cut and paste. Highlighted for clarity.
Refineries in Texas are subject to local property taxes (based on market value of real/personal property), state franchise tax, and sales/use taxes on equipment, though they benefit from significant manufacturing exemptions.