I’m not the only one pointing out that so called “oil profiteers” at Big Oil are not exactly profiteering as much as some think.
“From 1986 to 2003, using 2004 dollars, the real national annual average price for gasoline, including taxes, generally has been below $2 per gallon,” noted the Federal Trade Commission in a 2005 report absolving the industry of collusion. “By contrast, between 1919 and 1985, real national annual average retail gasoline prices were above $2 per gallon more often than not.”
In other words, gasoline prices were lower than at anytime since 1919 for much of recent history. Some conspiracy! Maybe somebody should have been investigating consumers for “gouging” the oil companies.
And just who is the profiteer here? While the average profit on the sale of a gallon of gasoline is nine cents, the average state and federal tax on that same gallon of gasoline is about 45 cents (and 52 cents in Michigan). And if we must have an investigation, how about investigating the extent to which government regulations drive up prices and block new production?
Management guru Peter Drucker once remarked, with his usual drollery, that profit is “whatever government lets a company keep.” But most folks have a vastly inflated view of corporate profits. One regular survey of Americans found that the majority believes the average corporate profit is between 30 percent and 40 percent of sales, while the real figure is closer to 4 percent.
That’s something else to explain: If Bush and the Republicans are in bed with Big Oil, went to war in Iraq to secure more oil for their buddies, and are letting them jack up the price of oil—why is Bush and some in the GOP among the loudest voices calling for investigations? Of course, as we see here investigations of the oil companies are a red herring.
We have to find the truth, not just what’s emotionally satisfying
Technorati Tags: gas prices, oil, politics, taxes
Dom,
Can’t you see how these numbers ignore the mind boggling conspiracy afoot? Don’t you see??
There is a sinister cabal of albino oil executives that have secretly jacked the price of gasoline to fund the Priory of Exxon.
There is a ranch in Texas where someone found an mysterious, ancient FAX documenting the fact that Judas invented the cigarette, and THEN became the first head of OPEC – OPEC really stands for “Oil People Executed Christ”.
Don’t quote me on this, but “some experts say” that Mary Magdalene anointed Jesus with crude oil! Don’t you see what that means? Jesus would have been walking around with black smudges on his face, just like A CAR MECHANIC!!!!
2000 years BEFORE THERE WERE CARS!!!
This is the secret being kept by the Priory of Exxon.
Please, please open your eyes, Dom!
“By contrast, between 1919 and 1985, real national annual average retail gasoline prices were above $2 per gallon more often than not.”
These numbers depend upon how the 2004 dollars were determined, and what is meant by “more often than not.” These numbers are not numbers we can work with statistically. This is closer to anecdotal evidence than to verifiable fact.
So, since we are talking about pet theories and anecdotal evidence, my husband, who pumped gas in 1961 before going to college, remembers 9 cents per gallon. When I bought my Mustang in 1967, I paid 28 cents per gallon. In 1967 the cost of gasoline was not a significant factor in my budget. It was an incidental. More like candy bars than like the entertainment budget or one of the utility bills. So I’m not buying this argument.
My own personal theory—more hope than theory actually—is that there is a synthetic fuel replacement for gasoline that cannot be manufactured economically until gasoline reaches a certain price level. It is probably in the best interests of the U.S. to see the country switch fuels, and so gasoline prices must rise to provide demand for the new fuel, and so the price rise has “help.”
Regardless of why prices are so high today, may I just comment that when Exxon and Mobil or Chevron and Texaco were hurting in the 1990’s b/c oil was selling for only $30 a barrel I didn’t see anyone worrying about the oil workers getting laid off from their jobs and the like. No one was saying we should prop up the price of oil to make sure these people get enough money to live on and not have to lay off workers…
It’s hypocritical that now, since they’ve pared themselves down to companies that can earn a profit at $28 a barrel they’re being targeted for just that capability when the price is now higher and their profits are going up. It’s just silly and selfish on our part.
If you want to be mad a companies price gouging, take a look at farm subsidies and how they keep American Farmer’s in business while preventing the third world from making the money they need to grow themselves out of poverty.
I especially love how ignorance reigns supreme regarding Halliburton. If the Libs had been right about Cheney and Halliburton, I would have invested in HAL five years ago and made a killing.
Take a look at HAL’s chart relative to XOM or even the S&P. Until oil prices started going up (due to low supply, high demand) their stock price was what it was in 1984. Oooooooh…scary!
Wow, they must be REALLY sneaky to have done so badly since Cheney and Bush have been pulling all the strings for their rich oil buddies.
Meanwhile, Yahoo! made 45% profit last year. Hmmm…I wonder how Cheney managed that?
And I have never been able to explain to a liberal the significance of Cheney’s assets being “divested” and in a “blind trust”. They just can’t figure out how all the propaganda about Cheney and Halliburton can be correct if he doesn’t own any stock and doesn’t work there anymore. I mean he just HAS to be evil, right?
http://www.factcheck.org/article261.html
The hysteria continues.
“The oil company execs are garden variety crooks on a universal scale.
This is not a fact verifiable by numbers, but a 65 (or so) year old man taking 400 million to retire is evidence enough for me. (Those are verifiable numbers.) “
Is it a crime to make this much money? Is Mel Gibson a criminal for making millions on movie?
$400 million was what the board approved. Is it a lot? Yes. Is it obscene? Yes (from my perspective). Is it criminal? No.
Some of the criticism here borders envy, which is not a Christian trait. It is not like the retired industry executive is sitting in a big room filled to the ceiling with money and gold.
I know the poor are being squeezed with higher energy costs, but the rage against pump prices and oil executives bonuses is predominately from those comfortable with the ‘go any where/do anything’ American lifestyle (I see the thousands and thousands of solo drivers on the rode each day).
“Thou shall not increase gas prices above $2 per gallon because Americans need to drive everywhere in large vehicles.” (Must be the 11th commandment that I have missed).
“Considering he’ll never live to spend half the money and considering people are losing their jobs all over the country due to high fuel costs, it looks like a crime to me.”
Call for his arrest. In fact, I think it is obscene for anyone making over $100K per year. Think about…why does anyone need such money? Especially folks who consider themselves Christian?
$400 million…let’s assume there are 100 million working poor in the US…therefore, Mr. Oil Executive stole $4 each from them.
Geez…evny is rotting not only perspectives but I would wager some souls too.
F
Wow! Now profit is a meaningless number?
Revenue minus operating expenses = profit. An accountant can weigh in on whether profit is calculated post dividend. I know there is a difference between profit and net.
XOM – 10%
Yhoo – 45%
As for HAL, it split once since 1984. Just like that evil corp Goodyear Tires on which I made 300% in just over a year, while Halliburton was tanking.
Or EMC, which split six times since 1990.
Or Yahoo!, that split five times since 1998, and has gained 10,000% in value.
Poor little Halliburton. If the liberal hysteria generators wanted to blast Cheney, they should have pointed out how badly HAL did under his direction! Instead they LIED, ignored the facts and made up a big conspiracy that, even if it was true, would have been the biggest FAILURE I can imagine.
I don’t think that crimes are only committed at the end of a gun, but I have never felt it was a crime if I lost my job. Or if others benefitted more than I, or had more opportunities. If that was the case, I’d be coveting my neighbor every minute of every day.
You say that people are losing their jobs over the rise in gas prices. How do you reconcile that with the fact that unemployment is at an all time LOW. And employment is booming in Texas, and Colorado because of the booming oil industry. Those folks are thanking God for their blessings! And rightly so.
You may not like my numbers, or Dom’s numbers or the Department of Energy’s numbers, but eventually, you should try to research this yourself.
You can’t fight the numbers. The oil industry has been one of the worst performing sectors for thirty years. Yes, they are making money now, but last year made almost exactly the average of the Dow Industry Index average of just under 11%.
Are there bad people in the oil industry? Sure. Just like Yahoo. Public Education….see where I’m going?
But there are good people too, and I happen to think Lee Raymond is one of them.
Ferde, I am guessing that you have never run your own company. I used to be a socialist. I bought into the whole “management is bad”, “workers are oppressed and good” thing. Until I became a business owner. I saw how my employees always assumed the worst, felt “entitled”, always thought I was making a million bucks, when in fact my partners and I were taking salary cuts so we didn’t have to have lay offs.
The oil companies are not making huge profits. They are not evil. Gas is cheap, by almost any standard except that of spoiled Americans. They employ hundreds of thousands of people. They provide our most important commodity. They are booming now and employing directly and indirectly tons of people all over the southwest.
If you look beyond todays headlines and look at what these companies and their investors when through for the last twenty years, you’ll see that this hooplah is much ado about nothing.