Depends on what margin he's talking about. Here's good explanantion:

Gasoline Price Breakdown - This page details the estimated gross margins for both refiners and distributors. The term "margin" includes both costs and profits. The margin data is based on the statewide average retail and wholesale price of gasoline for a single day of the week. It is not a seven-day average. The margin provided here is an indicator for the California market as a whole and not for any particular refiner or retailer of gasoline.

The Energy Commission cannot estimate profit margins based on average retail prices and observed wholesale market prices. This is because detailed data on refining and distribution costs, costs paid by approximately 10,000 retail locations, hundreds of wholesale marketers, jobbers, and distributors is not available.

The following provides specific information on how the data in the tables are calculated.

Refiner Margin - Refiner Margin (costs and profits) is calculated by subtracting the market price for crude oil from the wholesale price of gasoline. The result is a gross refining margin which includes the cost of operating the refinery as well as the profits for the refining company.

The price of crude oil is based on the daily market price for crude oil from the Alaska North Slope published in the Wall Street Journal©. The market price of crude oil also includes its own share of costs and profits. In the case of a vertically integrated oil company, the same company that owns and operates the oil field also owns and operates the refinery. Several vertically integrated oil companies operate in California including BP, Chevron, ConocoPhillips, ExxonMobil, and Shell.

For simplicity, the refining margins shown are based on producing one barrel of gasoline from one barrel of crude oil. No adjustments are made for other refined products.

Distribution Margin - Distribution margin (distribution costs, marketing costs, and profits) is calculated by subtracting the wholesale gasoline price (either branded or unbranded) and taxes (state sales tax, state excise tax, federal excise tax, and a state underground storage tank fee) from the weekly average retail sales price. The branded wholesale gasoline price is based on the average statewide branded refined "rack" price, information obtained from the Oil Price Information Service (www.opisnet.com). The rack price is the price paid at the point where tanker trucks load their fuel from a distribution terminal's loading rack. The unbranded price is also based on OPIS pricing information.

The distribution margin can be either positive or negative in value. A negative distribution margin implies that some gasoline is being sold at a loss. Similar to the refining margin, the distribution margin also includes the costs and profits of operating the retail gas station as well as various transportation and storage fees incurred once gasoline is moved from the bulk terminal to the retailer. Most branded franchisees purchase gasoline at a delivered price called the Dealer Tank Wagon price that is typically higher than the branded rack price. A retail-specific margin is not available at this time.

Higher Food Prices Blamed on Higher Gas Prices

Joint Chiefs Mullen
Computer problem leads to serious flight delays in the East

Food prices are up and will keep fluctuating for the next several years because of new demands for corn. According to government surveys, egg prices are up nearly 19 percent in the past year, because of corn based feed price increases. The change hit home, at Channel 3's Memorial Day bbq: Senior Producer Jason Holder made 6 dozen deviled eggs: last year it would have cost $5, this year it was between $10 and $15.

Galeville Grocery's Bernie Rivers is keeping an eye on price increases--and the reasons. There's a fuel charge added on to deliveries, and that drives costs up, across the board.
In addition, most processed foods include corn syrup. Farmers are planting record amounts of corn this year, but their crop will go not to food, but to ethanol, the corn-based fuel additive.
Even bread prices are expected to increase, because farmers are planting more profitable corn instead of wheat.

Rivers says we'll get thru this supply and demand fluctuation, and says it might even be better to pay a bit more for food, if it's better for our environment.

Anyway, since the refineries were not operating anywhere near there usual 95-98% capacity this spring, they probably were making $0.90 a gallon on refined product, for good reason.

Now $3.07 and still falling. There's a report due out tomorrow that should keep prices falling. I wouldn't be surprised to see sub-three dollar prices within a month, maybe in the $2.50 range. Barring any major hurricanes in the Gulf, we should be back near $2.25 - $2.50 by the fall.

Coincidental timing to the article out in the papers last week about how oil companies make insane profits on "hot" gasoline?

What part of the country are you in? Here in KC, the price for reg. unleaded in about 2.80/gal.

I don't know to what you are referring.

Colorado.

It was an article in the KCStar last week. I'll see if I can dig it up....

Here it is...

http://www.kansascity.com/128/story/141689.html

I loved that article.. Talked about how it was too expensive to do in the US, but then showed that oil companies did it all throughout Canada so they didn't loose any money..

Showed that some places the average temperature of gas was around 100 while pumping...

Oh that? I wouldn't think that has much, if anything, to do with the present decline. Demand has dropped slightly, gasoline imports are up and refineries continue to add capacity.

Well, they certainly could add the technology to compensate temperature differences at the retail level.

Do you want to pay for that equipment in every retail store in the country?

Ohh **** off with your constant defense of the oil companies..

They are suppose to keep the temp. at 60degrees by the standard they do not... They paid to install those temp. gauges in Canada to keep it at the correct temp... Explain that one for me, they will follow the law when they lose money but will not when they gain money???

Oil company says it will cost 10k a pump to fix, a 3rd party says they make the exact same device for 300dollars each pump.. Donger of course will only believe the oil companies statements..

Bottom line is they have been doing this for decades make a couple extra billion a year off of it.. Now they are getting blasted by Congress and others for their illegal actions..

Your defense, we will have to pay for it???

They have already set the precedent for paying for the device.. And even if the average American had to pay for it it would be paid for in one year...

How much stock do you have in oil that you want them to illegally rip people off???

I guess my first question is how is the fuel getting so hot? Most, if not all gas station tanks are underground where the temp is always around 55 degrees. Doesn't make sense to me. Nevertheless, the average temperature over a 365 day period in the midwest has to be right around 60 degrees so I can't see how it's impacting me. People in the south are getting screwed though.

This is my favorite line from that article:
WTF? God forbid the consumer actually gets what he's paying for. :shake:

I don't think they need defending. I merely try to explain the economics behind gasoline prices.

As I understand it, Canada required the retailers to install the compensating equipment at the stores. US law does not require it, so it hasn't been done. And, FYI, the vast majority of retail stations aren't owned by the oil companies. Did you know that?

There's nothing illegal about it. And, considering that we have seasons, and gasoline is regularly sold well below 60F, it actually more than evens out. Congresscritters really are NOT the best people to listen to about this...

Sure. You're of the opinion that the retailers should just eat the cost?

None.