How do these big oil companies justify such profits. I know how they get them from $3.00+ per gallon of gasoline. It seems obvious to me that the relationship between the cost of a barrel of oil dose'nt equate to such high gasoline prices, just higher profits.
2006-07-27 04:10:59 · 10 answers · asked by coonrapper 4 in Business & Finance ➔ Corporations
I guess I don't see the other Utlity companies making such big profits e. g. Electricity, Natural gas.
2006-07-27 05:32:05 · update #1
Yes, if the price of coffee went up, Starbucks would make LESS profit. If beef went up, hamburger restaurants would get hurt. This concept is true of virtually all businesses. It doesn't hurt a Texas oil buddy running the government, I guess.
2006-07-27 04:15:41 · answer #1 · answered by Anonymous · 1⤊ 2⤋
Your point is?
Gasoline is worth what the market will bear. It's not the fault of the oil companies that people drive SUVs. Why would you want oil companies to artificially lower the price of oil, thus the price of gasoline, just so people can waste it?
Also, oil company stocks are owned by EVERY private pension fund in America. The oil companies have a duty to make as big a profit as the can.
Where were you when oil was below $30 dollars a barrel (just 3 years ago) and oil companies were getting killed by higher exploration costs and lower revenues?
Finally, gasoline isn't a utility. Utilities are generally companies given an exclusive franchise due to the infrastructure expense (the cost of laying natural gas pipe, water mains, electric lines). In exchange for this monopoly utilities are subject to governmental restrictions on rates and price increases.
In contrast, you're free to patronize any gas station you want to. They have no exclusivity. In fact, you're free to start your own oil company (it's done all the time when small investors buy oil and gas leases or mineral rights and pay to drill a well).
Your logic, particularly the belief that oil companies are utilities, is deeply flawed. If you want to ***** about gas prices, start with the taxes. In Illinois the tax on a gallon of gas is 48 cents.
2006-07-27 11:21:52 · answer #2 · answered by Oh Boy! 5 · 0⤊ 0⤋
no yes or no answer for this one. I'm no economist but I think you are right. Only problem with that thinking: Is Exxon the only big oil company with such astronomical profits? Is Exxon the one big name that's being fed to the media as a scapegoat for the reason to explain the insane profits so the critics can jump all over the name of "Exxon".
2006-07-27 11:15:35 · answer #3 · answered by marque_de_sade666 3 · 0⤊ 0⤋
Naturaly with the oil market the way it is profits are going to high regardless of the price of gasoline. Another thought to consider is that demand has been going up worldwide. Given the fact oil prices are so high, there's more of a profit to be made because more people are buying. Nothing wrong with it at all.
2006-07-27 11:13:09 · answer #4 · answered by TakingStock 3 · 0⤊ 0⤋
you can not look at only the 10B, let look at Exxon market cap,is about 407B, look how much % they make, the really deal is demand go up day by day from china, if is no demand and a lot of supply out there, you think you still need to pay $3 gasoline?this year pass last 6 months, china average sold 20000 car a day. that not include India, how aboutUS. Always demand drive the market and the profits.the world two biggest population country economy is keep growing,that is the key.
2006-07-27 11:30:46 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Profits, profits, profits. The rich get richer and the poor and middle class....help the rich get richer. Lots of people complain about the $3.00+ prices of gas prices, but keep that in mind when you vote for the next presidential election.
Bush is the reason for this...no doubt...no arguement...end of discussion. We are: occupying an oil producing country at the cost of 2500+ American soldier lives and for what? Answer: $3.00+ gas prices.
2006-07-27 11:18:47 · answer #6 · answered by equipmentandstuff 2 · 0⤊ 0⤋
Exactly, they use every disaster, every confflict as an excuse to line their pockets. Our government does nothing because the cash is going into their pockets too (dems and reps alike).
They broke up Microsoft & Bell for the crap they act like the oil companies aren't doing.
2006-07-27 11:13:18 · answer #7 · answered by Robb 5 · 0⤊ 0⤋
They are selling something you insist on buying. Get a bicycle. Ride mass transit. It will not help. SUV owners will buy the gasoline anyway.
2006-07-27 11:14:25 · answer #8 · answered by jude2918 3 · 0⤊ 0⤋
Because we are so dependent we will pay what ever the price
Hey they have been paying $3 or more in Europe for a decade or more
2006-07-27 11:14:09 · answer #9 · answered by SeaSea 3 · 0⤊ 0⤋
Why do you think George Bush started the war in Iraq? You know he comes from oil money. It's all so he and his cronies can make much money.
2006-07-27 11:13:24 · answer #10 · answered by spudric13 7 · 0⤊ 0⤋