Others have already made the point here but I will add

1. All shareholders make the same dividends ... they make money based on their investment. Its the fundamental way American business runs since our inception
2. CEOs work FOR the shareholders. If they make lousy profits, they get the boot. They make better profits, they get more money ... the American Way. This is no different than in most any "job". Do lousy, you get fired. Do well, you may get a raise.
3. "Contribute to the community" Once again, NO American company exists to contribute to the company ... they exist to make money for their shareholds .... thats it. If they didn't, they would not exist.

The foundation of this country was supposed to be equal opportunity for all.

Where does it say that? The Declaration of Independence says all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

There is nothing in there about equal opportunity for all. It says you have a right to "pursuit" happiness. But the Declaration is not law. The Constitution is law and there is no "right" in their for equal opportunity. Later laws discuss equal opportunity to eliminate discrimintion, sex, race, age, etc., a totally different subject.

The fact is, the rich get richer and that is exactly how a free enterprise system works ... you come up with, invent, provide, create a better way to sell widgets, cheaper, then you too will put Exxon out of business in your pursuit of happiness. You do have the opportunity to do that.

 

Yawn.

 

I might be the only one to think this... but I hope gas prices continue to rise. We pay much less than other countries around the world. I hope it changes the way people drive and changes their views on smaller, more efficient cars.

I love my car but I especially like the idea of letting it sit in the driveway as I ride my bike or jog to work.

 

Try riding or jogging to work in Houston. I'm sure your co-workers will have a few words with you.

 

I'm with bpetzold on this one,

I understand that companies are out to make profits, and I won't deny them that. I also understand that rising costs to the gas companies are passed on to the consumer, fine. But the fact that costs are going up across the board, yet Exxon-Mobil is on track to make an $80 billion profit this year? What's that, twice the profit of last year? And the price of crude is NOT double what it was at this time last year.

Call it what you want, but I call it some serious GOUGING going on. And they are fine with the public thinking it's all because of those initial companies that pump the crude out of the ground.

I'll tell you how it'll play out as well. The gas companies will continue to raise the price of gasoline well over the rate of their own costs until enough people are driving hybrid/cylinder deactivation/smaller vehicles and biking/walking/subwaying to work to actually make a dent in their profits. Only then will the cost of gasoline rise at a more natural, slower rate. I'm sure that these same companies don't want to build any more or are against other companies buidling more refineries, as that would eat into their profits as well. All with a little unintended help from the NIMBYs.

My 2 very shiny pennies.

 

I don't haveto eat corn or drink OJ if I don't want to. But I do have to get to work on a rubber wheel of some sort. (Bicycle is out of the question.) Fuel isn't a mere commodity governed by pure supply and demand. The demand is quite inelastic. The supply is rigidly controlled by a cartel! Why does a company be owed the same percentage profit, if they control the selling price. Excess profit = windfall= price gouging. All legal, or so it seems if you ask our government, or at leat the oil guys that are in there now. Didn't take a super economist to see it coming after the prez said it in the State of the Union.

 

This is how I'll explain why their profits can double. Let's take for example, it takes a company $40 to get gas to a consumer. That's the cost and it's pretty much fixed. Next the price of oil is determined by the markets, so let's say a year ago, it was $50. Now, gas has gone up and and it's a bit more expensive to get gas to the consumer, let's say $50. Unfortunately, the market doesn't care about the cost. It has decided that the price is now $70. Guess what, Exxon just doubled their profit. Many of you seem to think that oil companies set the prices. The real people you should be angry at are the people on Wall Street. That's where prices are dictated. You guys really have to start realizing that this isn't a PS2 or a Television we're talking about. It is a commodity and thus normal pricing rules don't apply. Commodities are priced by the financial market.

You're right, demand for fuel is very inelastic. Mainly because it runs so many things in our daily lives and there's no replacement for it. However, that has nothing to do with supply.
1) Yes, a large percentage of world reserves is in the Middle East. It dwarfs the entire world.
2) They control supply, but as it is now, they have little or no excess capacity, all of which is controlled by Saudi Arabia.
3) OPEC is a cartel and follows all economic rules of cartels including cheating by the members. OPEC can allocate production to each country, but in the end all the countries cheat and produce more than they're supposed to in hope of extracting rent.
4) Given the rule of cartels, don't you think they're all producing as fast as they can to extract as much rent now? They've gone through so many years of only getting $10 / bbl, that they want to make as much money as possible.
5) I don't understand the rest of what you're saying, but some of it seems political...

 

All I know is that I paid $3.17/gallon for 93 in Arlington, VA on April 22.

On April 24, I paid $4.13 for a venti latte at Starbucks in DC -- waaaaay less than a gallon.

By comparison, we're doing OK w/ gasoline.

 

Dude, the Starbucks Cartel is totally gouging you. You need to call up your Senator to get a Congressional hearing together.

 

Actually, that was the discussion on the AM radio today. Congress wanting a windfall tax on oil profits. However, it dont mean squat unless the tax is applied back into the pump prices. Since there is a federal tax on gas and congress wont lower that, then take the windfall tax and use it to lower the pump price by applying it to the federal gas tax .... Is that going to happen???

Not in this lifetime since every congressman wants the windfall tax to go to their own pet projects.

 

Actually, Americans are using more fuel than ever before and Oil companies have been restricted by environmental concerns from increasing refinery capacity by building addional refineries. It really is a supply and demand issue, there is a certain amount of supply and we want more fuel than is available, so the prices go up. Like I tell my friends here around DC... work from home one day a week and take public transportation one day a week. If every working American did that, we would cut back on fuel usage tremendously. Also, try riding a bicycle, scooter or motorcycle to work. Scooters get between 50 and 100mpg and bikes of course use only food fuel...
Mike

 

I'm glad that I decided to trade my SUV in one morning on the way into town. The gas had jumped overnight by $.20 so I put enough in to make it to the dealer. This was in early 2001 when prices hit $1.50. Sadly. Those were the days.

Last week it cost $38.50 to fill up the MINI. I'm guessing a $1 more per gallon in a few months. I hope I'm wrong but I'm not counting on it.

I now wish we would have bought the house we were looking at in town. If so, I would be riding a moped to work.

 

Would this actually work (F the shareholders)??!?!?!

An e-mail I recieved:

GAS WAR - an idea that WILL work

Join the resistance!!!! I hear we are going to
hit close to $ 4.00 a gallon by next summer and it might
go higher!! Want gasoline prices to come down? We
need to take some intelligent, united action.

Phillip Hollsworth offered this good idea. This makes
MUCH MORE SENSE than the "don't buy gas on a certain
day" campaign that was going around last April or May!
The oil companies just laughed at that because they
knew we wouldn't continue to "hurt" ourselves by
refusing to buy gas. It was more of an inconvenience
to us than it was a problem for them. BUT, whoever
thought of this idea, has come up with a plan that can
really work. Please read on and join with us!

By now you're probably thinking gasoline priced at
about $1.50 is super cheap. Me too! It is currently
$2.79 for regular unleaded in my town. Now that the
oil companies and the OPEC nations have conditioned us
to think that the cost of a gallon of gas is CHEAP at
$1.50 - $1.75, we need to take aggressive action to
teach them that BUYERS control the marketplace..not
sellers. With the price of gasoline going up more each
day, we consumers need to take action. The only way we
are going to see the price of gas come down is if we
hit someone in the pocketbook by not purchasing their
gas! And, we can do that WITHOUT hurting ourselves.
How?

Since we all rely on our cars, we can't just stop
buying gas. But we CAN have an impact on gas prices if
we all act together to force a price war.

Here's the idea: For the rest of this year, DON'T
purchase ANY gasoline from the three biggest companies
BP, EXXON and MOBIL. If they are not
selling any gas, they will be inclined to reduce their
prices. If they reduce their prices, the other
companies will have to follow suit. But to have an
impact, we need to reach literally millions of BP, Exxon
and Mobil gas buyers. It's really simple to do! Now,
don't wimp out on me at this point...keep reading and
I'll explain how simple it is to reach millions of
people!!

I am sending this note to over 30 people. If each of us
send it to at least ten more (30 x 10 = 300) ... and
those 300 send it to at least ten more (300 x 10 =
3,000)...and so on, by the time the message reaches
the sixth group of people, we will have reached over
THREE MILLION consumers.

If those three million get excited and pass this on to
ten friends each, then 30 million people will have
been contacted! If it goes one level further, you
guessed it..... THREE HUNDRED MILLION PEOPLE!!!

Again, all you have to do is send this to 10 people.
That's all!
(If you don't understand
how we can reach 300 million
and all you have to do is send this to 10 people....
Well, let's face it, you just aren't a mathematician.
But I am . so trust me on this one.) :-)

How long would all that take? If each of us sends
this e-mail out to ten more people within one day of
receipt, all 300 MILLION people could conceivably be
contacted within the next 8 days!!! I'll bet you
didn't think you and I had that much potential, did
you! Acting together we can make a difference.

If this makes sense to you, please pass this message
on. I suggest that we not buy from BP/EXXON/MOBIL UNTIL
THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP
THEM DOWN. THIS CAN REALLY WORK.

 

In Manitoba (Canada) regular (bleck!) fluel is $1.09CDN/Litre...this is equivalent to approx. $3.50 USD/gallon.

Premium fuel (91 octane only for MINI) is $1.19 and up/litre....$4.50/gallon CDN or about $3.80 USD/gallon...over $50 USD for a fill

That being said...it doesn't stop me from driving as I know many european countries have been paying far more for a long time.

 

I can't work from home and neither can MiniNurse. I take the Metro everyday and they just recently raised their prices. It used to cost me $2.85 one way and is now $3.90. It is still cheaper than driving to work and less stressfull.

I already don't buy gas from these companies. I buy from Shell/Texaco.

 

Then you are already doing your part and that's . I actually am getting gas at Wal-Mart (Murphy(?)- I believe) and it's one of the cheapest in my area according to this wonderful site:

[FONT=Arial]http://autos.msn.com/everyday/gasstations.aspx?zip=&src=Netx[/FONT]
[FONT=Arial][/FONT]
[FONT=Arial]It's apparently updated every evening [/FONT]

 

When we used to live in FL there were Super Wal-Marts everywhere. I miss them alot.

 

I only buy from Sunoco or Citgo anyway. Viva Hugo!

 

I think I like your idea of mass transit. Not only the gas, but seriously FOUR people almost hit me today. Not like drifting into my lane, like almost HIT me

Ironic, being that I was driving a rental b/c a girl hit me last week...

 

Those countries that pay more for gas than we do, do so because of much higher taxes on that gas.

 

You make a lot of good points, and a couple with which I disagree. Guess which ones I will respond to?

Ahh, but they have much more than doubled their profit. The market price may now be $70/bbl, but that is meaningful only if they are buying that oil on the spot market. They are not. They already have a variety of long term supplies at essentially fixed costs. When prices go up, profits go up nearly in line with those increases, and not just on a percentage basis.
What does have to do with supply is lack of refining capacity. The oil oligopoly in this country has figured out that by not building badly needed refineries, they can reduce the supply of gasoline on the market and thereby greatly increase their unit profit. That is why no new refineries have been built in this country for over 30 years. It is not environmentalists. No permits have been denied during those 30 years. No, oil has consciously decided not to build more refineries. It does not take a conspiracy, only all of them acting in their enlightened self-interest, for them to do that.

I am not sure if you are the one who has been pushing the "buy oil stock" mantra, but I will ask you anyway: Why should I buy stock in a company if I think that company is antithetical to my beliefs and to the good of the country? For profit? Corporations may be able to be so single-minded, but I am not.

 

even better, the oil companies even shut down several plants over the last
few years. there was a big stink in california not too long ago about
why a couple of plants there were shutdown and the resulting tight supply.

(it wasn't due to environmental pressures or lack of permitting)

 

I only used an increase in costs from $40 to $50 to demonstate that there are also increased costs from distribution. It is by no means an accurate number. For all I know their costs went from $40 to $42. I was only using an example as to how oil companies profits would not just increase proportionally, but rather exponentially since many of their costs are fixed.

Regarding the market price of a barrel of oil, it is decided by the financial markets. There's so many threads going on about oil that I can't keep up with them. There are many reasons why it's sold at a market price and not on a cost plus basis. One, it's the most economically efficient way of doing it. Two, many of the countries that give concessions to the major oil companies wouldn't agree to a cost plus agreement since it would reduce their cash inflow. Three, if they were selling it for a cost plus basis when the market price was much higher, you can believe that a gray/black market will arise. It would be very prudent for people to go around buying all of it up and reselling it at a market price.

The reason there hasn't been any refinery capacity is because the big oil conglomerates didn't believe and may still not believe that the price of oil will stay that high. They've weathered over a decade of getting only $10/bbl and just now it's increased to $70/bbl. What goes up must come down...Maybe. You can't justify an oil refinery when you're afraid that oil might go back down to $10/bbl. This all has to do with corporate finance and it's very telling that many companies in the oil industry still use a $20-$30 / bbl to value the net present value of a capital project.


I have said it a couple of times as a way to hedge yourself against oil prices, but I don't know if I'm the one. It could be one of many people who share my view. Regarding your position, it's perfect. It's exactly what a capitalist market is. You've effectively utilized your power as an agent to reduce their profit by not increasing their stock prices... Now, all you need to do is boycott and get others to boycot their gasoline and you'd be golden.

 

You know, we can talk until we're blue in the face about markets, commodities, corporations and so forth. I'm not really interested in that. No one has been able to explain to me without using abstracted facts, hearsay or random opinions, why the oil companies are having such a windfall. I understand, to some degree the market dicatates the price, etc, blah blah blah. But looking at the simple fact that while raw material (crude) and manufacturing (refining, transport, etc) have all gone up, should dicate that price goes up. Therefore companies raise their price to keep their profits in line. Makes sense. How then do profits double (or more) from this? I understand they need to make money, that's why they're here. But it seems to the layman that there's some shenanigans going on. And you know it's political. It concerns our government and their complacency with big corporations and a general lack of concern for the people. There I said it.
SHENANIGANS

 

Adding to what the previous member posted... I read an interesting article on msnbc this morning.

Japan is looking to completely bypass us to get their oil. And it looks like they will get it much cheaper than we get ours. Basically, the article stated that Japan has never pissed off any Islamic country so they will get it cheaper than the US, since so many people hate us.

Odd article but makes me wonder.