RUSH: I keep getting e-mails from people who are upset that I’m not talking about the rising gasoline prices. I have talked about them. I’ve told you the reason the prices are going up, that is refinery shortages when they’re switching over from winter to spring. They have to make these different blends. They make less heating oil now and switch over to make gasoline, but our refineries, they’re not all in the greatest shape. We haven’t had a new one since 1979, and plus there are all these EPA formulations for different parts of the country for emissions and this sort of thing, and everybody says, ‘Four dollars a gallon!’ I doubt that it’s going to get to four dollars a gallon. It will eventually come down. (interruption) Well, I’m talking about the national average. I know it’s four dollars a gallon in California, but Big Oil knows that they’re saps out there that will pay it. So that’s why it’s four dollars in California. There are all kinds of explanations why the price goes up.
However, ladies and gentlemen, I ran across something last night that I have to share. I know that some of you, even you big fans in this audience, believe that Big Oil conspires to raise prices. Don’t forget the story we had yesterday. Big Oil making is all kinds of contributions to Democrats, but the Houston Chronicle didn’t call ’em ‘Big Oil.’ They called ’em ‘energy industries,’ and industries in the energy sector. But get this story. It is from Merrill, Wisconsin. ‘A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices. Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon.’ It’s the way that he wanted to support various people and activities in his community in Merrill, Wisconsin. But get this. ‘The state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin’s Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.’ Well, now, hold on here just a second! Hubba hubba. Did you understand this? The state demands, in Wisconsin, a retail price of 9.2% more than the wholesale price. My friends, I can remember countless times on this program where you have called here and complained about the gasoline price, complained about Big Oil. I said, ‘If you want to look at the real profiteers in gasoline, look at the states and look at the feds and look at the taxes that they collect off every gallon. It’s pure profit for them because they don’t produce it; they don’t drill it; they don’t refine it; they don’t research it; they don’t find it. They just got their hand out every time you go to the pump.’
Now, it gets even better. ‘Bhandari said he received a letter from the state auditor last month saying the state would sue him if he did not raise his prices.’ Now, I don’t know who the governor of Wisconsin is, but this guy had better, after this news gets out… You know, all these upper Midwest states, Wisconsin and Michigan, some of these governors have gone nuts when the price goes up, ripping Big Oil, demanding windfall profits taxes and all that to get even, and Mrs. Clinton said she wants to ‘take’ Big Oil’s profits and put it into alternative energy or whatever else. But now we learn that the state of Wisconsin demands a price 9.2% — not 9.2 cents, 9.2% — more than the wholesale price. He said it, they demand it, and they’re going to sue this poor guy if he offers price cuts to sports boosters and to seasoned citizens. Now, this poor man, by the way, ‘The state could penalize him for each discounted gallon he sold, with the fine determined by a judge. Bhandari, who bought the station a year ago, said he worries customers will think he stopped the discounts because he wants to make more money. About 10 percent of his customers had used the discount cards. Dale Van Camp said he bought a $50 card to support the local youth hockey program. It would have saved him about $100 per year on gas, he said.’ So, folks, the next time you hear any government official start ripping into Big Oil, I want you to remember this story. Add to it the taxes they charge and now this demand that retail gasoline station operators bump their price by a minimum of 9.2% over wholesale.
I know some of you say, ‘Rush, lets just stop gas wars.’
Why do you want to stop gas wars? What’s the problem with gasoline wars? Whatever happened to free enterprise and all that? Whatever happened to people wanting to compete with one another? At any rate, a companion story: ‘Congressional Democrats, under pressure from constituents complaining about high gas prices, promise that the Fourth of July will be Energy Independence Day.’ Well, whoop-de-doo! The Fourth of July is going to be energy Independence Day. ‘The speaker of the House Nancy Pelosi and top Democrats, other top Democrats announcing yesterday a fight against what they charged was price gouging. The Democrats added they will hold anti-trust hearings about Big Oil.’ This is in the Washington Times today. You talk about drilling dry holes! How many times have these people been there? Do you people understand that all of this is a bunch of rhetoric to try to feed your anger — your ignorant anger, by the way. You are ignorant about the reason for prices. No, no, no. It doesn’t mean stupid! You just don’t know why prices go up. It’s something about gasoline. You understand it in other areas, but gasoline seems to just knock everybody for a loop. So you have these Democrats coming along and saying, ‘Well, windfall profits, Energy Independence Day, July 4th, we’re going to make sure that people understand we are for them. We’re going to attack Big Oil!’ It’s a dry hole.
They attack Big Oil all the time, and the gas price continues to fluctuate, go up and down. A windfall profits tax is going to raise prices, folks. Just keep this in mind with the story I just told you about the state of Wisconsin. This is what Pelosi said: ‘This Congress, under the Democrat leadership is working to make up for years of inaction, taking America in a new direction helps bring down the cost of gas and promotes energy independence.’ Somebody better send her the story about what’s going on in Wisconsin. (interruption) What is it, Mr. Snerdley? He’s paying attention now. Snerdley has a question: ‘If there’s record demand, why is the price is out of control?’ Because gasoline is something people need. They just they need it, and it’s the summer driving season.
RUSH: Montgomery, Alabama, Chad, you’re next on the EIB Network. Hello sir.
CALLER: Rush, mega dittos.
RUSH: Thank you.
CALLER: Original listener when you were out in Sacramento.
RUSH: Thank you, sir.
CALLER: Listen, I was calling to tell you a little bit about this Wisconsin Unfair Sales Act on the gasoline prices.
CALLER: It’s a typical below cost pricing statute that a lot of states have.
CALLER: And the purpose of it is to prevent predatory pricing caused when a company sells below its actual product cost to put a competitor out of business, and then once that competitor is out of business, they raise their prices to the consumer when there’s no longer any competition.
RUSH: I understand all that.
CALLER: Yes. It’s a Wal-Mart scenario.
RUSH: Well, yeah, it’s the independents versus the Big Oil-owned stations. I understand all that. I just think there’s a little hypocrisy here. Like, the governor of Wisconsin is a guy named Jim Doyle, and he’s out there threatening all these massive tax increases on Big Oil. The gasoline price goes up, and he’s the first to blame Big Oil. He gets people all revved up and riled up, and I just thought people should know that the states are requiring, a 9.2% rate. The law could easily say, ‘You can’t sell below your cost,’ and leave it at that.
CALLER: Yeah. And a lot of states actually do have statutes that don’t set the 9.2 cents. [sic] What that 9.2 cents represents is, basically, the state assuming that the cost of transporting the gasoline and the cost of the overhead that goes into the total cost —
CALLER: — has got to be a minimum of 9.2 cents.
RUSH: No, it’s 9.2%.
CALLER: Right. Well, other states, like Alabama, basically say you can’t sell below your costs, and then everybody fights over what’s cost, you know, and it’s really two things you’re fighting over.
RUSH: Well, I understand, but this guy was still making a profit with his gasoline sales.
CALLER: Yeah, and I think that’s unbelievable that you have a statute that would punish him when he’s still making a profit.
RUSH: Yeah, and they do. But keep in mind, now, I only mention this — I understand all these other things, the independents versus the big guys. This guy, I don’t know if he’s independent or not. His station is a BP station. I don’t know if he owns it or if British Petroleum does and he’s just managing it or franchising it or what have you. That’s not the point here. The point is that this is a governor who has been out there trying to scare people to death about the rising price. He’s gonna come down on Big Oil for ‘windfall profits,’ and make sure they pay through the nose. I just want people to know that when they go buy gasoline in Wisconsin, that their state is mandating a minimum profit of 9.2% over the wholesale cost. Their state is mandating it — not to mention all the taxes that they collect at the state level and the federal level without having to spend one dime to produce it. They’re just scavengers. You know, they’re like a bunch of buzzards up there, turkey buzzards or what have you, just waiting for the carcass of the consumer to roll in — and they don’t produce any gas. They don’t drill for oil. They don’t research and develop. They do not refine it. They do, zilch, zero, nada — and sit there and wail and moan and cry.
RUSH: Bill in Heron, Michigan, it’s great to have you on the EIB Network. Hello.
CALLER: Good morning, Rush. Mega dittos.
RUSH: Thank you, sir.
CALLER: I agree with you on some points on this Wisconsin thing. I owned a gas station here in Michigan for about 20 years, and we never made 9.2 cents per gallon. The reason why, is the oil companies give you the price to sell your gas at, and they also charge you rent on the building that you have from them, which is about five cents a gallon. Selling gas, you don’t make any money. The gas station owner does not make money. If you have a convenience store that sells gas, that’s where you make your money. If you have a mechanical bay in your station, that’s where you make your money. You don’t make any money off gas.
RUSH: I’ve heard that my whole life. You know something? That’s even better. If nobody’s making any money off gasoline, then who the hell’s benefiting from all the gouging?
CALLER: I’m telling you, the oil companies sets the prices on gasoline.
RUSH: Well, so what? They’re the ones selling it to you. Sony determines the price of their Blu-ray DVD players. Sony determines the price of their televisions they sell to Wal-Mart and everybody else.
CALLER: That’s right.
RUSH: Well, let’s go after Big Electronics here!
CALLER: I totally agree.
RUSH: No, we don’t —
CALLER: I don’t think there should be any set prices from any company selling anything, because all that does is just rip off people.
RUSH: Exactly. They ought to be able to set the price based totally on the market. Exactly right.
CALLER: Right. Right.
RUSH: Now, you’re telling me, when I pull in — well, I don’t pull in but when the staff pulls in — to the local station and they use the full-serve pumps (because I don’t want my staff getting gasoline-stained hands and fingers when they come back home), are you telling me that the premium price above whatever self-serve, high test, whatever it is, is not profitable even though some guy’s coming out and squeegeeing the windshield?
CALLER: Here in Michigan we have mostly self-serve. There are some full-serve pumps there. But there’s very, very few. The only people that can go to a full-serve one and get it pumped by the individual with no extra charge, are handicapped people. You don’t sell enough gas here in Michigan at a full-serve island to make any money. I don’t care if you charge ten dollars a gallon, you’re not going to make enough money because nobody buys it. Everybody pumps their own gas.
RUSH: All right. If you charge ten bucks a gallon you’d sell less. Somebody would go down the street. But you’re right: all these price controls are a good economic lesson for what happens. Kilgore, Texas. Alan, thank you for waiting. You’re next on the Rush Limbaugh program.
CALLER: How you doing, Rush?
CALLER: I’m listening to what you were just saying about Wisconsin. There’s a bill on the governor’s desk here in Texas that the governor is going to sign, that’s going to put a moratorium on the 20 cent gas tax down here.
RUSH: That’s because there’s panic over the rising price.
CALLER: Well, they say we’ve got enough in our slush fund down here right now to cover any expenses that would come out of taxes for the next three months.
RUSH: Well, is he running for reelection?
CALLER: No, he just was reelected last election. Rick Perry.
RUSH: Rick Perry. Okay. Well, he is a Republican, then, right? Yes. Yes. That explains it.