Do a google search for "oil company tax breaks" and be surprised. It is corporate welfare at its worse.
Once again a lot of people are overlooking the scale of operations in the oil industry. The nature of the industry is always going to dictate that nominal profits will often be high. This is not because of price fixing but simply because it is nature of the oil industry. But to get a fair judgement of oil industry profits you have to look at it over the course of a year; not just a quarter since quarterly fluctuations can vary significantly. But more importantly, because nominal profits can give a skewed picture of the oil industry what we really should be looking at is the margin of profit. Because of the enourmours expenses incurred by the oil industry, the its margin of profit runs normally around 7% which is much lower than other industries such as the banking industry which commonly has a margin of profit of 19%. Another thing you have to look at is prices after they have been adjusted for inflation and national income. As a percentage of national income we are actually paying less for oil than we did in the 70's. To give a better picture of just how cheap a gallon of oil is, a gallon of water (which requires no costs associated with drilling, importation or processing) costs more than a gallion of oil. The reason most people are upset with the oil companies is because they are the ones people love to hate. They are a convientent target; the "robber barons" of the 21st century. The fact that this judgement is wrong and unfair is beside the point. If you want to blame somebody, blame Congress for preventing the United States from exploring and drilling new oil sources because we will "destroy the world." Blame OPEC for holding the world hostage by raising the price of a barrel of oil hundreds of times what it costs to get it out of the ground (if you want to charge someone with "price gouging" OPEC would be a good place to start). You can also blame the American people for its failure to conserve.
We don't need to subsidize oil companies. I don't think profits are the problem, it is the relationship our government has with the oil companies that is probably the problem. We pay a lot less for oil than the rest of the world, and really the price of gasoline hasn't spiked as much in other countries because their currency is more stable. A true free market may require us to pay more for gasoline, and if it did, why do we expect our government to play any part in lowering that price?
You totally lack reading comprehension. I said the cost of alternatives are prohibitive for most consumers in the market to make any change. Hybird and electric cars are not viable alternatives for most.
Then show us these numbers or a graph. I don't think they will reveal any losses by big oil over course of the year. Where do these numbers come from? $39.5 profits within $377.64 billion in revenue is over 10%. Percentage of national income is NOT EQUAL TO average salaries. Average salaries adjusted for inflation also have come down. Exactly.
Why doesn't innocent until proven guilty apply to oil companies? We've been accusing them of screwing us for over 30 years without any evidence. No former oil exec or employee has come forward and the media hasn't uncovered anything. And it's not like people aren't looking for evidence to hang them. No smoking gun to this point. Making ungodly amounts of money legally doesn't bother me. Until someone proves they are doing it illegally, I'm ok with it. In the meantime, invest in oil to recoup money lost at the pump.
Oil profits can fluctuate wildly from quarter to quarter. In the 80s the oil companies were struggling, but I don't recall anyone being concerned then? If you do your research you will find oil companies usually have around a 7% margin of profit. You are wrong. When all factors are considered, as a % of income we are paying less now for gasoline than we were in the 70s. This has been noted several times.
Lots of very good points on both sides of the argument. I am not going to make excuses for big oil as I think Red hit it on the head with the windfall profit theory. I will say that of everything that everyone has said, there was no mention of us just not having enough facilities to refine the crude oil. Couple the lack of refineries with the rising demand for oil in places like China and big oil is frothing at the mouth. When demand outnumbers supply then we have a large part of the answer as to why prices are so high. Just my .02
What are these "high costs" you are talking about? Just about every car manufacturer has these options. Maybe your comprehension on the issue is what is lacking..
