Why are the oil cos. allowed their hugh profits and bonuses while we suffer with high prices at the pumps???

Answer 1

Hey, it's capitalism baby. It's the reason you don't have to wait in line for 3 hours for moldy bread while Party officials have a filet mignon at the State restaurant. A better question is: what are the consequences of cheap gasoline? That is what you are after, correct? Everyone wants cheap gas...

Lets take a look at a little history: throughout the 50s and 60s, gas was dirt cheap and we built progressively bigger, heavier cars and lived further and further from work, play, shopping, etc. Ride a train? How quaint and European! Then came the OPEC oil crisis with 3 hour waits to buy gas and stagflation in the 70s. All of a sudden, Detroit was in trouble because all of their cars got 10 mpg. That's when Honda's CVCC (the future Civic), along with a host of other small imports, got popular. US gasoline use actually flattened out and then DECLINED!! Gasp! You mean gas got more expensive so people used less of it? You betcha, Jimmy! It's economics 101.

Fast forward to the 90s. A loophole in vehicle taxes combined with good old fashioned macho-itis led us into a national obsession with the SUV. A bigger, heavier gas guzzler made mostly in Detroit. You know, they say that those who fail to study history are doomed to repeat it, but GM and Ford walked right into that one. Now where are we? Crying into our cupholders.

So, what is the consequence of cheap gas? Take a look at those countries that subsidize gas prices for their citizens: Iran is a great example. Their government may hate us, but their people LOVE our cars: big, steel monsters with V8s. They own a couple of cars per family, drive around on state roads even when they don't need to, all while sucking down $0.80 gas. If you want to fork over less of your paycheck to Exxon, buy a smaller car.

Answer 2

It is simple, supposed "former" oil tycoons running the country like umm the president. You know they still have plenty of friends from the industry that give big bucks to keep things the way they are. Yes we do use a lot and that is part of the problem but it is inflated beyond what it should be. Anyone making such huge record profits is obviously gouging the prices and using fear of supply or unrest in the mideast as excuses. The stock market in general is run by such tactics, fear and worry. Most have not a clue in the company they are investing in.

Answer 3

Maybe at the next Governor's meeting they could talk about the different blends of gasoline, get down to 1, 2, or even 3 blends rather than the hundred or so we have now. I suppose we could also build new updated refineries to make the gasoline. I realize that I am asking a lot from the people who "represent" us, but think of it this way. If the rest of America worked the way our representatives work, everyone would have been fired a long time ago and there would no money in our coffers.

Answer 4

For Example - If everyone needed a mattress at the same time and mattresses became scarce, the price would go to what the market would ultimately pay. Because we are for better or worse a Capitalistic Republic where everyone has the freedom and opportunity to make as much money as they can. What they do with the profits is give them to their workers and shareholders who also have the freedom to make their lives as fruitful and enjoyable as they can. Bill Gates is the richest person in the world, I never here anyone complain about the price of Windows Operating System. I can't do without my computer and I guess you can't do without your car.

Answer 5

There are many idiots out there saying its supply vs. demand economics. WRONG!!! The Oil companies openly admit that they will not build more refineries to have additional capacity. The current price spike is due to refinery capacity being purposly limited by "maintenance" and other small problems. The oil companies know that there is nobody to stop this practice. It is a legalized monopoly. Even top econimists say the price changes do not fit the supply vs. demand model.
Supposedly congress represents us. Do you hear virtually anything from them regarding this? They continually try to distract us from this with Alberto Gonzales, global warming and the like. Try to ask your representative about this. Usually your representatives website wont even allow the issue to be raised. Try it, I dare you and think about this the next time you vote.

Answer 6

A good start if Congress has the capability to put their political differences aside would be to mandate oil refinery technology upgrades. Our refineries need updating in the worst way. Our political leaders on the hill are failing the american people with their political agendas and pleasing their bases. The US is being run by big corporations while the american people who pay your salaries are being thrown to the curb fending for themselves.
For a nation that is supposed to be the richest in the world with the greatest hope for opportunity for all it's citizens - congressional leaders on capital hill are setting a bad example and poor representation.

Answer 7

You are not going to like this answer because it is not what you want to hear.

Oil companies only make big profits because they are big companies. The profit per employee, or profit per gallon of gas, or whatever, is not higher than any other kind of company, like solar cell manufacturers or whatever. It is simply that the solar cell manufacturing company is about a million times smaller than the oil company so they make a million times less profit. If the world ran on solar power, then the solar cell companies would be big and making billions in profits and you would be complaining about them being greedy.

Answer 8

Does anyone realize that our federal government makes a bigger profit from gas taxes than the oil companies do?
The average profit MARGIN!! for oil companies is 10%,
the same as most businesses. i.e. If I sold 300 billion
dollars worth of sporting goods @ 10% profit I would
make 3 billion dollars. Would you accuse me of price
gouging?

Answer 9

This question has been asnwered a million times ad nauseum. Its a simple matter of supply vs demand. Stop driving gas guzzling sports cars, SUV's, big trucks, and using Semi's to transport goods, and stop driving everywhere, and demand for gas will drop, supplies will go up, and the price will come down. The people caused this, they can stop it, don't blame the oil companys.

Answer 10

What exactly do you expect anyone to do? This is how a free market works. Are you suggesting we go to some type of centrally planned economy? You might want take a look at how poorly these systems work before you make that suggestion.