April 26, 2006
Texas Rainmaker compares the oil industry to others making larger profits. Are they gouging too?
Center for Sanity linked with Qatar to Politicians: Shut Up...
The Pretend Pundit linked with The Real Reason for High Gas Prices...
Amy Proctor linked with Dems Pimp at the Pump...
44 Responses to “What’s the Deal With Gas?”
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8:32 am [ Quote ]
The “Phramaceuticals” as so eloquently posted here are gouging too I believe. There is much collusion with the government, and the government even made it so they can’t get a deal from the pharmaceuticals by buying in bulk, hilarious!!
Back to gouging, the way a free market of competition companies is supposed to work is companies compete to get the business from the customer. When large gas companies are making multiple billions of dollars profit off of price increases, they aren’t competing and giving the customer a good deal. That means there is collusion between the gas companies to not compete. Pretty straight forward.
9:13 am [ Quote ]
Unbelievable; someone wasted this much time to come up with a graphic to support fat cat ExxonMobil. I’d love to see what kind of bar chart this yahoo would come up with to support Pres. Bush if he started killing puppies.
9:20 am [ Quote ]
Oops, I missed the source of the graphic, “Business Week & Oil Daily”. According to a recent article in the same magazine, oil has been shown to promote stronger, healthier growth of seal populations.
9:25 am [ Quote ]
I understand the logic behind pointing out that other industries are also making big profits, but honestly I think it’s foolish and bad strategy for Republicans to engange in. This will turn out to be one of the worst screw ups since Terry Schiavo if conservative pundits are not careful. All it will do is anger people and make them suspicious of what these ‘Big Oil’ defenders have in their portfolio. Bad strategy, guys.
9:27 am [ Quote ]
I notice you used the figures for the 3rd qtr. 2005. Why not 1st qtr. t006?
10:25 am [ Quote ]
Meanwhile, our “high” oil prices are still dramatically lower than elsewhere in the world, for example Europe.
10:28 am [ Quote ]
Perhaps the first quarter figures arent out yet.
It would be nice to have a thorough review of this problem before we start trotting people out to the guillotine.
10:51 am [ Quote ]
Haven’t owned a car in 10 years. Use public transportation and walk.
10:56 am [ Quote ]
Ian, when you were upset about the oil company’s CEO getting a fat pension I was getting a little worried about you regarding this matter
.
I’m glad you see the oil guys are not as “greedy” as some folks make them out to be.
10:59 am [ Quote ]
The answer to your question is “yes.”
Fuel has cost more in Europe for many, many years because the Europeans sensibly tax gas heavily to reduce driving, increase fuel efficiency, and protect the environment. It works very well.
You should drop over and have a look around.
11:05 am [ Quote ]
Let’s see, Business Week and Oil Daily….so you just put up the oil industries own propaganda!
11:08 am [ Quote ]
Ian, I posted this data on Monday using both the charts Texas Rainmaker used. I included a link to the page/data as well.
I said:
US oil companies make approximately a 9 cent per gallon profit. Federal and state taxes equal anywhere from 26.4 to 53.5 cents per gallon.
http://www.conocophillips.com/newsroom/other_resources/energyanswers/oil_profits.htm
It’s a good resource. Conoco.
11:10 am [ Quote ]
PS… the point being, this gas scare is a big to do about nothing. If the economy stunk, as with Jimmy Carter, you could make a case for Presidential ineptitude. However, the economy is great, unemployment down, interest rates down, inflation down… so the main culprit is TAXES and dependance on foreign oil.
Dems are demagoguing big time.
11:26 am [ Quote ]
I notice everyone that’s challenging the source of the chart doesn’t offer any of their own facts to dispute it. Come on geniuses, show us the contradictory statistics.
So I guess Business Week is now a right wing propaganda machine? For what it’s worth, the Oil Daily provided just the information on the oil industry profit margins. Still, can you guys offer some evidence that the 8-10% average for oil industry profit margin is wrong?
While you’re sitting there drooling, here’s some more to chew on. A report from Industry Week from 1999 showing pharma profit margins in the 20s – with some in the 30s, Coca-Cola even averaged 19% over 4 years and Microsoft over that same period averaged nearly 28%. That article reports that “Oil had only three companies with profit margins above 10%.”
But thanks for playing.
11:41 am [ Quote ]
So the argument is, “suck it up, we can afford to be gouged”? Not this cowboy. Jabba the Hut (aka Lee Raymond)got his golden parachute as if he’d founded Exxon in his garage drilling for oil with his Black and Decker. No big deal. I suspect that this latest run-up, just like the Katrina run-up, is a test to see how much we’ll pay without driving less. Run it waaay up ‘till there’s outcry and a laughable promise of a probe (bend over), then lower the price from the highest point to where we feel better but are still paying a quarter per gallon more than before the run-up. They look like good guys, “See! The price adjusted. It’s the market!” but only compared to the high point of the run-up.
11:44 am [ Quote ]
If anything, the source of the charts validate them. Who knows better about what constitutes the breakdown of oil prices than an oil company? Also, the other source Conoco uses is the US Dept. of Energy.
If anyone can produce another source to counter the chart, Conoco should be brought up on charges of fraud. Of course,that won’t happen.
11:51 am [ Quote ]
Dems Pimp at the Pump…
US oil companies make approximately a 9 cent per gallon profit. Federal and state taxes equal anywhere from 26.4 to 53.5 cents per gallon. (the national average is in the mid 40 cent per gallon range) Since Democrats have never met a tax hike …..
11:55 am [ Quote ]
G Wiz said, “I think it’s foolish and bad strategy for Republicans to engange in.”
You didn’t really explain why. I think it’s a great strategy.
Dr. Hamandegger said, “I notice you used the figures for the 3rd qtr. 2005. Why not 1st qtr. t006?”
The 1st quarter of 2006 just ended. The data still has to be compiled, evaluated and published.
11:55 am [ Quote ]
“PS… the point being, this gas scare is a big to do about nothing.”
Indeed it may be by the cost of gas in other parts of the world, but for a country that has always had cheap gas almost as a birthright, its very hard to swallow now at the pump for the average joe. I wouldn’t be cutting your nose off despite your face just yet.
Something as “small” as a dollar a gallon increase in gas puts tens of thousands of Americans closer to or under the poverty line and they ultimately blame the government, regardless of whether the government is Republican or Democrat, its a fact of life people, accept it. With this government’s current operations in Iraq, the Katrina fiasco, people are losing faith in government, any government and this is just another nail in the coffin.
12:10 pm [ Quote ]
Ok so who can we blame on this on? Bush? Love to but this gas crisis isnt going away so something needs to be done about it. But what???
12:40 pm [ Quote ]
Ok so who can we blame on this on? Bush? Love to but this gas crisis isnt going away so something needs to be done about it. But what???
I’m sure Bush is drving around the country with his gas-guzzling motorcade of SUVS in order to come up with a solution.
12:43 pm [ Quote ]
Lets see, oil is up to $70 a barrel, we are entering the summer months which means you have to take into account ethanol (thanks enviropsychos), the fact we having done anything as far as reducing dependence to heat homes and such (thanks for not letting us build nuclear power plans), the fact that we havent built a refinery in how many years, nor the fact that the BIGGEST profit from gas is going to our GOVT which is pulling about .26-.50 per gallon of gas.
1:02 pm [ Quote ]
I’m sure Bush is drving around the country with his gas-guzzling motorcade of SUVS in order to come up with a solution.
And Im sure that Presi…oops…I mean Senator Kerry is driving around in his gas-guzzling Suburban in order to come up with a solution. Well, its not really HIS truck, it belongs to his..ahem..family.
Do you really expect the POTUS to be conveyed around in a fleet of Ford Festivas? That armor plate would really do a number on the suspension.
1:29 pm [ Quote ]
Dear Lord, some of you people…
“When large gas companies are making multiple billions of dollars profit off of price increases, they aren’t competing and giving the customer a good deal. That means there is collusion between the gas companies to not compete.”
Plane tickets tend to be approximately the same between some airlines as well, does that prove collusion? How about a more simple answer: different companies use the same raw materials, the same refining methods, are subject to the same taxes and the same EPA standards, hence the resulting prices will be approximately the same.
“According to a recent article in the same magazine, oil has been shown to promote stronger, healthier growth of seal populations.”
And apparently you adhere to the old article that lead paint increases your life span.
“I notice you used the figures for the 3rd qtr. 2005. Why not 1st qtr. t006?”
Because they aren’t available yet.
“Meanwhile, our “high” oil prices are still dramatically lower than elsewhere in the world, for example Europe.”
Wrong. Our GAS prices are lower. Oil costs are the same.
“the Europeans sensibly tax gas heavily to reduce driving, increase fuel efficiency, and protect the environment.”
That is “sensible” if you have other options for transportation. Many here in the US do not have access to mass transit or pedestrian means. All the high taxes do then is hurt the customer/worker. Could explain why Europe tends to have higher unemployment rates than the US, ya think?
“I suspect that this latest run-up, just like the Katrina run-up, is a test to see how much we’ll pay without driving less.”
Or supply-and-demand rules… ya know. Funny too, cuz after the Katrina clean-ups, gas went back down. Failed to mention that, didn’t ya?
“I’m sure Bush is drving around the country with his gas-guzzling motorcade of SUVS in order to come up with a solution.”
So, by comparison, the millions of people across the US who drive SUV’s are that much more so to blame?
I love the idiocy on some of these blogs. It’s addictive.
2:24 pm [ Quote ]
G Wiz said, “I think it’s foolish and bad strategy for Republicans to engange in.”
Amy Proctor said, “You didn’t really explain why. I think it’s a great strategy.”
Mainly because there is an election coming up very soon, and in a country where most people are still non-partisan, the last thing the Republicans need to do is give people a reason to vote against them. Defending the profits of oil companies would do just that. Yes of course many of the arguments against the oil companies are senseless, but we have a mainly liberal media in that means perception is reality. It’s a losing battle to sit and tell people they are okay spending more on gas just because other industries are making X profit too. If you cant see how that would turn off voters then I dont know what else to say.
2:26 pm [ Quote ]
Amy Proctor said, “You didn’t really explain why. I think it’s a great strategy.”
Your turn. Please explain to me how defending the profits of oil companies is a “great strategy.” I really can’t wait to hear this will bring people out to vote Republican.
2:31 pm [ Quote ]
The Real Reason for High Gas Prices…
People are frustrated – and with good reason. While free markets always makes more sense than central planning, the gas market does not respond as well as other market segments do. As a vehement defending of free markets and devout…...
2:48 pm [ Quote ]
Please explain to me how defending the profits of oil companies is a “great strategy.”
Because it’s rational and moral. Cox & Forkum had a great cartoon today, touching on an issue that I’ve noticed for some time: when a wage earner provides a service to an employer for more money, it’s called “making a living”, when a large company provides a service or product to customers at increased prices, it’s called “price-gouging”.
Republicans (some) have historical ties to the oil industry. This taints their view as biased. They are correct, but they’ll be painted that way. Democrats are noted as anti-big-business, so they are deemed more credible.
Can’t blame anyone but the gullible public.
3:27 pm [ Quote ]
No, Hootie, gas went back down to above pre-Katrina prices. That is point. It goes up dramatically then back down to just above where it was. This practise (yes, intent is implied) desensitizes the consumer to 20-30 cent hikes. After a one dollar run-up it feels great when it comes back down 75 cents but you’re still paying higher prices.
3:29 pm [ Quote ]
“Please explain to me how defending the profits of oil companies is a “great strategy.””
“Because it’s rational and moral.”
Because it’s moral
?!?? BWAHAHAHAHAHA. Great explanation!
4:03 pm [ Quote ]
So, gas companies should not be allowed to make a profit?
I’m tired of hearing raw numbers. The graph shows the percentages being made. Why is no one attacking the banking industry for making, ‘obscene,’ profits?
The pharmaceutical industry spends huge amounts of money on research and testing for the development of new drugs. Nobody ever mentions that when they attack their profits.
What’s the definition of, ‘gouging’ to you liberals, anyway? Any time a large corporation makes a profit?
Sheesh!
4:21 pm [ Quote ]
G Wiz,
I think posting the charts is a good strategy for several reasons. It reveals the truth: banking, cell phones and high speed internet are all optional. Its a matter of priority, and Americans are chosing to use optional goods (cell phones, etc.) at a greater rate than gas. For example, I spend $40 for gas a month, maybe $60 including my husband’s gas usage. We spend $65, which is cheap, for our 2 cell phones (optional) and for our digital phone, internet (wireless laptop/ connection) and cable combo we pay $130 a month. That’s more than double what we spend on gas to get where we NEED TO GO.
Food and beverage profits are above gas profits. Are Americans having larger families, more kids and NEEDING to spend more on food/beverage? No. Families are smaller but they opt to eat out more and eat more, getting fatter. And who needs beer, wine, Coke and Pepsi? Its a want, not a need… yet people are willing to pay more for their personal preferences than for necessities like gas.
The graph puts it in perspective. We’re a spoiled country of whiners who blame anyone else but ourselves for our problems. People say, “I’m willing to pay high taxes so the poor and elderly can be taken care of, so the roads will be fixed and public schools financed.” Fine, then don’t bemoan the high tax rate on gas which adds to the overall cost of gas. If you want to pay taxes, pay taxes and suck it up. If you want to not pay so much in taxes, look at the Democrats who are responsible for high taxes on gas. Here are some facts about Dems and taxes on gas:
– In 1992, 131 Democrats Supported Imposing The Federal Diesel Fuel Excise Tax In The Same Manner As The Gas Tax. (H.R. 5649, CQ Vote #360: Motion Rejected 200-207: R 68-90; D 131-117; I 1-0, 8/4/92)
– In 1993, 217 Democrats Supported A 4.3 Cents Per Gallon Increase Of The Federal Gas Tax. (H.R. 2264, CQ Vote #406: Adopted 218-216: R 0-175; D 217-41; I 1-0, 8/5/93)
– In 1996, 93 Democrats Voted Against A Temporary Repeal Of The 4.3 Cents Per Gallon Gas Tax, Which Would Have Saved Motorists $2.9 Billion. (H.R. 3415, CQ Vote #182: Passed 301-108: R 208-15; D 92-93; I 1-0, 5/21/96)
– In 1996, 180 Democrats Voted Against Ending Debate On Bill that Would Have Temporarily Repealed The 4.3 Cents Per Gallon Gas Tax, Which Would Have Saved Motorists $2.9 Billion. (H.R. 3415, CQ Vote #180: Motion Agreed To 221-181: R 220-0; D 1-180; I 0-1, 5/21/96)
To conclude, the chart makes a very valuable comparison between our needs and wants. Viagra, Ritalin, Clariton, and prescription birth control all make a bigger profit than gasoline. I think that’s worth pointing out.
4:34 pm [ Quote ]
Since you Libidiots don’t trust the oil industry chart, how about this one from Yahoo biz?
http://biz.yahoo.com/p/120qpmu.html
Industry: Major Integrated Oil & Gas Net Profit Margin % 9.00
6:52 pm [ Quote ]
YEah Conoco is a fuckin bastard as well…they laid off my uncle becuase he didn’t “devote all time and effort to the company”...hence the CEO and local franchises were making millions rippin off people in Houston…
Lets bring back death taxes and estate taxes just to scare the shit out of these greedy monopolizers.
6:54 pm [ Quote ]
They laid off a “shit load” of people, to be precise…
7:10 pm [ Quote ]
The BIGGEST price gouger is the FEDERAL
GOV’T @ around $.40 per gallon. Why no outrage from the left? Just cut the Feds $.40 off the top…NOW
8:41 pm [ Quote ]
Great response Howard. Very inciteful… as usual. Can you define, with a rational response, why Oil companies do NOT morally deserve their profits?
Tom, notice I said it went back down, not how far. Point in fact, gas prices (at least in my area of PA) did go back down to pre-katrina prices. We saw $1.99 here for awhile after the hurricane. Then it went back up to $2.30. Now we’re at about $2.99.
Interesting fact of the day: Gasoline prices in today’s dollars are 28% higher than in the 50’s (given inflation). When you consider the environmental requirements, the government tax on gasoline, increased benefit costs and wages, that 28% is eaten up rather quickly.
If you want a simple explanation of the economic principles of gasoline, visit CapMag.com and read any Walter Williams paper on the subject.
8:52 pm [ Quote ]
Neal, the death tax would hurt middle class and low income the most. The wealthy can afford to lose a good portion of their inheritance, people struggling to pay for funeral services can’t. Also, it’s completely immoral to tax someone because they died, regardless of their wealth. Finally, notice how you want to use taxation as a form of punishment, as opposed to a worthwhile goal. That wreaks of jealousy, not concern.
1:54 am [ Quote ]
I’ll give up my SUV when you give up…
Plastic
and every other petroleum based product.
X
9:19 am [ Quote ]
What’s the definition of, ‘gouging’ to you liberals, anyway? Any time a large corporation makes a profit?
Glad you asked. My opinion is when an industry has benefited by tax breaks (to the tune on billions) has been exempted from cleaning up the environmental messes it creates, has been allowed to create a virtual monopoly (allow by our Govt regulatory agencies), been given billions our our tax monies for purposes of “developing” and “exploration” of oil fields, all these perks which costs the people, and then, IN A TIME OF WAR, when our kids are risking their lives, they charge AS MUCH AS THEY CAN GET AWAY WITH. When they’re making record profits (records for ANY industry throughout ALL HISTORY), yep that’s gouging.
Play back the billions we gave them in tax breaks. Pay back the billions we gave them in exploration funding (corporate welfare). Pay for all the environmental damage they’ve caused (rather than our taxes paying for their mistakes), then what’s left over is profit.
Keep in mind, the “corporation” is just a license granted by the people (though the Govt) giving a group PERMISSION to operate a business. It’s not a right, it’s a privilege.
It’s designed that way because the profit motive knows no morals. It’s the job of the Govt to keep a ethical watch on corporations. If they go too far their license should be repealed.
We don’t need Exxon. Exxon needs us.
9:21 am [ Quote ]
Unfortunately when the oil corporations install some of their own as leaders of our Government, we the people loose.
9:25 am [ Quote ]
I love the fine print…
“Sources: Business Week and Oil Daily”
But with world oil prices trading around $72 a barrel, analysts say full-year profits for the oil majors are likely to surpass the record-setting earnings of 2005, when Exxon reported a $36.13 billion profit – the highest ever for a U.S. company.
http://kutv.com/topstories/local_story_116132840.html
10:35 am [ Quote ]
Good argument Dallas, I somewhat agree with your definition. When a company’s resources are offset by tax-payer dollars (not tax breaks, but our actual tax dollars) it seems only fitting that they do right by the tax-payers and foot our bill at some point. I also agree that having special interest people in the government is like letting the fox watch the henhouse.
However, I disagree with any notion that a business should have to sacrifice profits at the expense of “the people’s” will… for example, “it’s war, so we should be cut a break on gas”. Do you volunteer to reduce your personal income (i.e. profits) to benefit others? Of course not! You need that money. It is no different for the gas station owner. I wonder, who sets the price of gas we pay at the pump: is it the corporate big wigs or is it the gas station owner? If it’s the owner, then you really can’t blame him for trying to increase his personal income as much as possible.
“We don’t need Exxon. Exxon needs us.”
Wrong. We don’t need a company if the company provides a product we don’t need. In fact, many people do need gasoline to operate their cars, so they do need the “Exxon”s of the world. It’s the essence of capitalism, free trade. If you don’t like the conditions of the trade ($3/gallon) you are free to find alternative means to your ends (travel). No one is obligated to provide you the means.
1:58 am [ Quote ]
Qatar to Politicians: Shut Up…
..the Qatari Energy Minister sees this and suggests that if the politicians would quit with the rhetoric which is driving the prices up, if they would stop, he thinks prices would drop at least $15 a barrel….