I think your assumption that consumers will “pay whatever price is being charged” is simply not correct.
Make sure you don’t mix up the idea of a monopoly/ogilopoly and price sensitivity.
Just because oil is needed, and there are a small number of sellers, doesn’t mean there is 100% insensitivity to price and that demand will not drop if the price is increased.
Also, given how much oil we use (waste?), I think usage could be reduced significantly with little loss in lifestyle. Thus, the price will have an effect on demand, especially when people are starting to feel poorer as they are now.
Not sure what you mean by “does the tax increase really matter?”
It does matter. It makes gas more expensive and lowers the profits of the oil industry.
The math works out to show that a tax manifests itself as both a price increase to buyers and a profit reduction to sellers. I forget the details, but the slope of the supply/demand curves affect what ratio of the new tax is absorbed by the buyers and the sellers. If buyers will buy at any price, they absorb the cost.
Again, this is related to price sensitivity, not to the number of sellers in the market. Even a tax in a monopolistic market can reduce the profits of the monopoly if the demand curve allows for it.
