Last night ABC News showed a clip in which a Congressional panel was …erm… discussing … the oil price situation with the CEOs of the five largest oil companies. I can’t quote verbatim what was said and I don’t remember, at this point, who was on the congressional panel, other than that woman whose last name is Feinstein. What the Congress-persons were asking the Oil Execs boiled down to, “How do you sleep at night, knowing the hardship your companies are causing the American consumer with your insane price hikes?”
The answer from the oil companies could be summed up as, “Oh, don’t let those record profits fool you, the price is so high because of the law of supply and demand. This is just Free Enterprise at work.”
I’m not going to be so rude as to say exactly what I think that is a crock of, but is smells horrible!
When profits go up to match every price hike, you cannot convince me that there’s any reason other than profits behind the price hikes. I did just a little bit of digging this morning and found an interesting trend over just the last few years. I’m sure this pattern goes back at least to the so-called energy crisis that the oil companies dreamed up back in the 1970s.
At this site I found a chart detailing monthly oil prices, with annual averages, all the way back to March 31, 1946. I only went back to 2005. For profits, I’m picking on Exxon-Mobile because they are the
worst offender largest oil company.
In 2005, the average cost of a barrel of crude oil was US$50.04 and Exxon’s annual profit was reported by The New York Times to be US$36.13 Billion. To put that number in prospective, that’s about $100,000 profit every day of 2005. Profit. That’s what’s left AFTER you’ve done the research, paid the bills, and everything else. Every Day. Including weekends and Holidays.
In 2006, the average price of a barrel of crude oil went up to $58.30 and Exxon’s profit that year was $39.5 Billion, according to CNN. That’s about $109,722 in profits EVERY DAY of 2006.
In 2007, the average cost of a barrel of crude went up again, this time to $64.20 and, surprise, surprise, CBS News reported that Exxon’s profit hit another record high at $40.6 Billion.
Given that the cost of a barrel of crude has DOUBLED since then, Exxon’s profits next year should be
The oil companies are swearing that it’s because the demand is so high and that, unless more refineries are built and this, that, and the other things happen, there’s nothing they can do about it.
Sure there is! They don’t HAVE to earn a record profit every year. It’s not as though the company would shut down if it only made $20BILLION dollars more than it spent, instead of $40Billion. Maybe, if they’re crying about how they can’t do anything about it until more refineries are built, they could, oh, I don’t know, take some of that FORTY BILLION DOLLARS and build a few refineries, and maybe update some of the existing ones which haven’t changed since the 1970s?
Last week, President Bush asked the oil producing natiuons to increase their output. Their answer? No. Why? was it because they’re already at maximum production? No. Was it because they don’t have any more oil to produce? No. The reason they gave was they didn’t see the need to do so. Of course not. They, along with the oil companies, are making money faster than our government can print it, and it’s only going to get better for them! Why should they change that?
And what I find to be the most frustrating part is that there’s not a damn thing that the average consumer can do about it. Big Oil has got John Q. Public by the private parts and every time Big Oil gives a squeeze, it gets more money.