View Full Version : Who is gouging us on oil prices?
Gawain of Orkeny
11-10-2005, 01:20
Well congress is looking into the oil companies gouging us on the price of gas. Its almost funny. Oil companies make a average profit of 7.7 cents per gallon . Here in NY you pay 62 cents a gallon in taxes per gallon. Now whos ripping us off? The state doesnt even produce or sell any gasoline.
http://www.conocophillips.com/NR/rdonlyres/11E1D154-487D-4B39-878D-
Tribesman
11-10-2005, 01:47
Don't you mean the vendor that runs the filling station as a franchise for the oil company makes 7.7 cents profit , not the oil company itself .
I was just thinking about the same thing, while watching some coverage on those hearings. I think oil companies are just about the only industry in the country that is supposed to apologize for making a profit. ~D
Gawain of Orkeny
11-10-2005, 01:53
No I mean the oil company itself.
An industry-wide study in the late 1990s showed that oil industry profits amounted to an estimated 7.3 cents on each gallon sold.1 More recently, ConocoPhillips reported that during the third quarter of 2005 earnings from its U.S. refining and marketing operations amounted to 9 cents per gallon, out of industry average retail price of $2.60 per gallon during the quarter.
Papewaio
11-10-2005, 02:36
Australians pay Aus 38 cents a litre.
Which converted to US dollars and Gallons is US $1.25 per Gallon.
Taffy_is_a_Taff
11-10-2005, 02:50
in the UK it's up to something idiotic.
Probably pushing $10 a gallon.
guess what most of that pays for?
The Yanks are only now complaining because they don'y have as much tax as other countries.
Die SUV Die
Kaiser of Arabia
11-10-2005, 03:51
We need to invade more nations and take their oil. Oil-hoarding pagans... *grumbles*
KafirChobee
11-10-2005, 04:54
in the UK it's up to something idiotic.
Probably pushing $10 a gallon.
guess what most of that pays for?
It pays for all of them having health insurance, it pays for them having an adequate social security system, it pays for them having a social structure that doesnot cowtow to the very wealthy, it allows for one of the best educational systems in the free world (the real one, not the US one), it forces conservation and it enforces environmental conformance - not to many Humvees in the GB, I bet (unlike Beverly Hills - the Gov. of Calif. owns like 5 of them).
The idea that the poor oil companys aren't gouging the f' out of us is BS. Look at the pump price, right there it tells anyone worth taking an interest what the taxes on a gallon of gas are. The oil companies are making an estimated 20 - 25 % profit margin at the moment, and claiming it is simply a supply side method of adjustment (demand - as they lovingly call it). Yeah, sure. Did you know they are selling it cheaper to the Chinese (fact - go look it up in Time, Nov 7, 2005). These guys are thugs. Their child molesters - and we are the children being molested.
An investigation is needed, and laws need to be passed prohibiting corporations from profits that exceed 7 % a year (prior to re-investment).
When Carter left office, two years after actually, an investigation was asked for by the Reagan "team" (Republicans in Congress) into why the price of peanut butter and peanut products had suddenly sky rocketted. Oh, dear. Jimmy did something to influence the market as President. Fact was, Reagan had requested that a surplus of peanut butter be stored for emergency - as was cheese (remember the great cheese and peanut butter give aways?). Reagan was quiet as a mouse, until it came out about his admin's involvement - then it was "oh, is that what y'all were talking about?".
This is, different. I know people that invested in oil company stocks (Exxon, etc) that are both gleeful and embarrassed about the checks they have receive (dividends) - they all wonder how it is.
It is, because we have an oil rich administration. We have a group (hell, Condi has an oil tanker named for her - former Exxon Emplyee, you know?) in power that owe their alliegance to a few men - all in oil (or the MIC).
Trying to make me feel that the poor oil companys are just making due, is like convincing me that a blow job is worse than creating a war.
Strike For The South
11-10-2005, 04:57
my god we agree~:eek: ~:cheers:
An investigation is needed, and laws need to be passed prohibiting corporations from profits that exceed 7 % a year (prior to re-investment).Totally ridiculous.
bmolsson
11-10-2005, 05:16
Now whos ripping us off?
Nobody. They just want you to take the bus...... ~:joker:
discovery1
11-10-2005, 05:19
An investigation is needed, and laws need to be passed prohibiting corporations from profits that exceed 7 % a year (prior to re-investment).
This is a TERRIBLE idea that would doom the economy. Why?
The industries with the higest profit margins are generally the youngest. By enacting such a law, you'd be dooming our economy. Imagine if such a law had been around prior to the vast expansion of the software industry? No would invest in it since the returns would be no better than many other industries and you would have the rist that comes with any new industry. Result: no personal computing revolution.
Oh, and BP rocks. Their machines an't charge more than 3 dollars a gallon.
Papewaio
11-10-2005, 05:30
Prior to re-investment?
So no more training including safety?
No more new equipment that is environmental efficient, safer for the worker and wastes less time?
Crazed Rabbit
11-10-2005, 05:53
Three words: Supply and Demand.
I know some people like to foolishly dismiss it, but they have not, obviously, adequately studied all the factors behind the price.
Prior to re-investment?
So no more training including safety?
No more new equipment that is environmental efficient, safer for the worker and wastes less time?
Whoa, steady there. You're attempting to use facts and logic to actually reason with a leftist.
I didn't see anyone here calling for oil company subsidies when the price per barrel was real low. But now, after having spent hundreds of millions of dollars on individual refineries, when they are finally reaping the return on their investments- which are high risk and require 100's of millions in capital, some louts want to tax them, which would reduce investment in new fields and refineries, just like it did in the 1970's.
How are prices going to go down? With new investment in refineries and fields.
Crazed Rabbit
Papewaio
11-10-2005, 05:56
But I am a lefty... who also believes in individual responsibilities and state run health and education...
Crazed Rabbit
11-10-2005, 06:00
Well, obviously you're not all the way gone. Perhaps there is hope for you to see the light yet, my friend.
Crazed Rabbit
Gawain of Orkeny
11-10-2005, 07:55
Let me get this straight again. The oil companies are gouging us by making 8 cents a gallon on their investments but the government isnt by making 50 cents a gallon without investing anything? And just who are these evil oil companies? Dosent the money go to the stockholders? Arent these ordinary Americans like you and I?
Gawain of Orkeny
11-10-2005, 08:40
Well isnt it a bit hypocrytical of congress to ask why the oil companies are making so large a profit when their making 4 times the profit off the oil companies product than the oil companies do themselves? Shouldnt they roll back the oil taxes if they want lower prices. Isnt it a fact that many libs like Gore want higher taxes on oil so that we develope alternative fuels and they are now the ones screaming the loudest. This is madness. Again as long as the money goes to the government its fine with either party. Heaven forbid it goes to citizens like us.
I didn't see anyone here calling for oil company subsidies when the price per barrel was real low. But now, after having spent hundreds of millions of dollars on individual refineries, when they are finally reaping the return on their investments- which are high risk and require 100's of millions in capital, some louts want to tax them, which would reduce investment in new fields and refineries, just like it did in the 1970's.
How are prices going to go down? With new investment in refineries and fields.
Crazed RabbitThank you. :bow:
That's something those strutting fools in DC can't seem to wrap their brains around. Either that, or they just can't pass up a chance to grandstand. ~;)
bmolsson
11-10-2005, 10:24
Let me get this straight again. The oil companies are gouging us by making 8 cents a gallon on their investments but the government isnt by making 50 cents a gallon without investing anything? And just who are these evil oil companies? Dosent the money go to the stockholders? Arent these ordinary Americans like you and I?
You are not fair to the US government. They are investing big time in oil. The Iraq invasion doesn't come for free you know...... ~D
English assassin
11-10-2005, 11:06
Well isnt it a bit hypocrytical of congress to ask why the oil companies are making so large a profit when their making 4 times the profit off the oil companies product than the oil companies do themselves?
Well, no, Big G, because taxation used to pay for government spending is not the same as a return on capital (AKA profit). You are trying to compare apples and cheeseburgers. Still, if you would like to see the US government forgo its tax take on petrol, and cut the amount of revenue lost off your military budget, that's fair. Its your country.
Ah, gotta love the right. They think their MBTs grow on trees.
Anyway, if y'all actually drove cars that did more to the gallon than a tank, it wouldn't bother you so much.
Oh, and petrol over here is about 8-10 USD a gallon, and civilisation hasn't ended.
Aurelian
11-10-2005, 14:25
Yesterday, I heard the CEO of Exxon interviewed on the "Charlie Rose Show", and then on C-Span Radio before the Senate. He mentioned something interesting about the refinery situation. He said that while no completely new refinery locations had been opened up in the US in the last 30 years or so, over the last 10 years they have expanded existing operations equivalent to three new refineries. He explained that a refinery relies on a huge number of secondary suppliers for parts and chemicals, and that they are all located near existing refineries. A new refinery in a "clear field" situation can't be easily supplied by that network, and is thus just not cost-competitive with existing operations. So, instead of creating "new" refineries, companies have chosen to expand operations on existing sites to take advantage of the more efficient supply situation.
That helps explain a couple of things: First, it is one of the major reasons that we keep hearing that no "new" refineries have been built. Second, it is one of the reasons that the refineries seem to be so heavily concentrated near each other. It's not really a great idea from a disaster management standpoint to have so many of our refineries sitting next to each other on the Gulf Coast, but it makes a lot of sense from the standpoint of the industry's cost structure.
yesdachi
11-10-2005, 17:20
Here is a quote from a Washington Post article. LINK (http://www.washingtonpost.com/wp-dyn/content/article/2005/10/25/AR2005102501655_pf.html).
Now, even as high gasoline prices continue to anger motorists and aggravate financial problems at General Motors Corp. and Ford Motor Co., the oil companies have begun to report record quarterly profit. Yesterday, British energy giant BP PLC reported a $6.53 billion third-quarter profit, up from $4.87 billion in the same period last year. And tomorrow, analysts expect Exxon Mobil Corp. to show that it earned nearly $9 billion over the past three months -- the largest corporate quarterly profit ever.
They are making plenty. Too much if you ask me and it has been at our expense. I find it funny that as soon as the gov starts investigating, the prices have dropped between 50 and 80 cents here in my city. They oil companies are a big evil monster monopoly and the fact that the gov hasn’t torn down this monster with anti-trust laws shows just how far in bed they with them. $6+ billion in profits in a single quarter! Screw them! Like others, my gas expenses have gone up by more than $200 bucks in that same quarter so companies like BP can make $1.66 billion more than last year! Or so Exxon can have the “largest corporate quarterly profit ever”! As a country we are in difficult financial times and these jackholes are making record profits by tightening the screws on us. I would feel differently if they had to do something differently but they had little or no additional effort or expense, only raise the prices.
I am a huge fan of capitalism but there has to be safeguards in place to stop crap like this. The safeguards are being ignored and the people are getting hosed.:knight:
Taffy_is_a_Taff
11-10-2005, 17:31
KC: you make me laugh. I'm from the U.K.
"It pays for all of them having health insurance"
You may have missed the post on my woes with using the NHS but surely you didn't miss the crap that EA's family is going through because they relied on the NHS. Guess what? I pay for private health insurance as well as my taxes (that are spent like a drunken sailor by the NHS).
"it pays for them having an adequate social security system"
Adequate my arse. I was unemployed for a while, guess who got into debt in a bad way?
"allows for one of the best educational systems in the free world (the real one, not the US one)" - eh, no, not anymore unless you're talking about media studies or drama.
"it forces conservation and it enforces environmental conformance" well, if you're talking about going with things like wind power (destroys natural beauty, not very effective unless you cover a place in windmills) rather than nuclear power (looks ugly in one small place, provides lots of power).
CThe government also deals with rural society disastrously, the reason the countryside looks how it does is because of farmers and estate management but that sector of the economy has been badly let down.
Also how about such practices as strip mining that still go on. nice way of conserving the environment.
"not to many Humvees in the GB, I bet" - plenty of urban SUVs though.
We get taxed hugely so that a welfare state that lets people down can be managed inefficiently. That's what it pays for.
Reverend Joe
11-10-2005, 18:18
Well isnt it a bit hypocrytical of congress to ask why the oil companies are making so large a profit when their making 4 times the profit off the oil companies product than the oil companies do themselves? Shouldnt they roll back the oil taxes if they want lower prices. Isnt it a fact that many libs like Gore want higher taxes on oil so that we develope alternative fuels and they are now the ones screaming the loudest. This is madness. Again as long as the money goes to the government its fine with either party. Heaven forbid it goes to citizens like us.
Wait... so, if the government drops its taxes, the oil companies will drop their prices?
*checks around* No, we are not in the Gaddah da Vida... so something is amiss. What in hell makes you think the oil companies will drop their prices if that happens? They are the worst of the capitalists, and if anything, they will raise their prices again and claim it is because of "disruptions caused by a shift in government policy".
Oh, and those profit margins don't add up. I recently found out, in the Wall Street Journal, that the oil companies are making billions every year in net profits. That's after taxes and expenses. Actually, I managed to calculate that they make more money every second than my father does in one year. So **** them.
Taffy_is_a_Taff
11-10-2005, 18:23
a few years ago protesters forced the U.K. government to slightly reduce tax on fuel.
the price went down.
And when I say forced I mean they physically blockaded refineries and generally tried to shut the place down.
Gawain of Orkeny
11-10-2005, 18:23
Wait... so, if the government drops its taxes, the oil companies will drop their prices?
didnt say that. But the government is certainly soaking you far more than the oil companies. In fact many liberals are in favor of rasing gas taxes so we dont use so much. Again they should be thanking the oil companies.
Actually, I managed to calculate that they make more money every second than my father does in one year. So **** them.
Typical liberal class envy. Again the profits from the oil companies dont go to a scrooge Mc Duck character sitting there counting his money. Most of it goes to the shareholders who are ordinary americans.
Mongoose
11-10-2005, 18:38
The only thing that bothers me about the oil companies is that they operate like a monopoly, as they all raise prices at the same rate and time...hmmm... Aren't those kind of agreements illegal? In a free market, if a company price gouges, they get mauled be the competition. in this kind of market, the only one getting mauled is the consumer.
taxing them more and taking the profits isn't going to help anything though. It's just going to make them gouge more.
yesdachi
11-10-2005, 18:46
Actually, I managed to calculate that they make more money every second than my father does in one year. So **** them.
Liberal class envy or not I’m with you, **** them!:knight:
Crazed Rabbit
11-10-2005, 19:03
They oil companies are a big evil monster monopoly and the fact that the gov hasn’t torn down this monster with anti-trust laws shows just how far in bed they with them. $6+ billion in profits in a single quarter!
Perhaps you missed what I said earlier:
Supply and Demand.
Also, there are several big oil companies. Thus, no monopoly, which means one company. ~:rolleyes:
These companies are in ruthless competition and would decrease prices if they could.
Finally, see my first post.
Crazed Rabbit
UglyandHasty
11-10-2005, 19:03
Its easy to make numbers say what you want them to say. That's 7% number is a fraud. It is well known within the industry, that profit below the 12%, and that to the auction, is not a good year. Any oil company that wouldnt give back at least 12% per auction would be in trouble. These guys are masters with numbers. Its easy to increase the distribution cost to inflate your cpl(cost per litre). Its easy to hide some inventory within a book. They dont talk about the insane profit they make with their refining margin. What about the diesel oil ? Wich is a distillate, they make insane profit on it. The bunker at 40 cent/litres, in wich btw they hide all sort of insane toxic stuff. Dont cry on oil company, they make insane profit with their monopol ! If you think the big heads leading these companies dont talk to each others for a global policy, you have your finger in the eye elbow deep !!
edit typo
Well, no, Big G, because taxation used to pay for government spending is not the same as a return on capital (AKA profit). You are trying to compare apples and cheeseburgers. Still, if you would like to see the US government forgo its tax take on petrol, and cut the amount of revenue lost off your military budget, that's fair. Its your country.Sorry, but that's not correct. The sole purpose of the gas tax is to fund the highway bill- originally designed to facilitate the construction of a national interstate system. Now however, it is pretty much the most pork-laden, vote buying program in government. -In it's latest incarnation, a hundred thousand or so of it is being spent on paving a parking lot at a local arena in my area.... how the hell is that a project for the federal government?? Then there's the even bigger wasters- like Alaska's infamous "bridge to nowhere".
The gas tax should be reduced- not to create lower gas prices (that'd be nice though), but because they don't need it anymore and are just wasting our money.:bow:
They are making plenty. Too much if you ask me and it has been at our expense.Every sucessful private enterprise makes a profit "at your expense". Oil companies are no different.
I find it funny that as soon as the gov starts investigating, the prices have dropped between 50 and 80 cents here in my city.That does seem incriminating until you realize that it also coincides with the end of the peak driving season, when gas prices normally fall anyway. Add to that the drop in prices after the post-hurrican scares.
$6+ billion in profits in a single quarter! Screw them! Like others, my gas expenses have gone up by more than $200 bucks in that same quarter so companies like BP can make $1.66 billion more than last year! Or so Exxon can have the “largest corporate quarterly profit ever”! As a country we are in difficult financial times and these jackholes are making record profits by tightening the screws on us. I would feel differently if they had to do something differently but they had little or no additional effort or expense, only raise the prices.Prices go up because of limited supply and increased demand. High prices, at the least, serve to have a dampening effect on demand. That is to say, when prices are sky-high people and industry look for ways to save money, whether that be car-pooling, public transit, or fuel effecient vehicles. However, if prices remained low, people would keep consuming at the same growing rate. To look at it in a microcosm- in Atlanta when they had gas shortages- which stations ran out last? Obviously, the one's with the highest prices.
Ok, now as to the oil companies and their profits... Again, realize Im over-simplifying a bit, but let's say they are producing gasoline at near capacity and selling it for $2/gal and turning a very narrow profit. Suddenly, demand spikes and at the same time production takes a hit as well- the prices sky-rocket to keep pace with demand. However, the oil companies were producing near capacity before with a slight profit- now, they are producing at capacity, but are making profit from approximately the same amount of oil. What happens? They make big profits. Does that make them criminals? Not in my book. What should they do? Prices were going to go up- no two ways about it. If you bought your home before the boom for 100k, but sold it for 300k, should you be penalized for making an "obscene" profit and gouging your customer? Should you be forced to turn over anything in excess of 110k to the government?
If there was evidence of collusion or market manipulation, then people should be prosecuted- I have yet to see that evidence. However, most people arent even talking about that- they're talking about penalizing a company for being sucessful... makes no sense.
Ser Clegane
11-10-2005, 19:30
Also, there are several big oil companies. Thus, no monopoly, which means one company. ~:rolleyes:
These companies are in ruthless competition and would decrease prices if they could.
In "ruthless competion"? Sure they are :rolleyes:
This would be the first oligopoly of established players with ruthless competition.
I would not go as far as saying that there is a price cartel (at least it could not be proven), but the big oil companies certainly are intersted in "good market conduct" and will not hurt each other if they can avoid it.
yesdachi
11-10-2005, 20:25
Perhaps you missed what I said earlier:
Supply and Demand.
Also, there are several big oil companies. Thus, no monopoly, which means one company. ~:rolleyes:
These companies are in ruthless competition and would decrease prices if they could.
Finally, see my first post.
Crazed Rabbit
I understand supply and demand but when all the people who supply the same product also work together to set the prices there is no true competition to the consumer they are essentially a monopoly that controls the supply.
I agree that they compete against each other but not to pass along savings to the consumer but to increase profits. They could have adjusted their prices to have a $2 billion dollar profit vs. the $6+ billion but they didn’t need to because there is no one to stop them from charging whatever they want when they all work together to set the prices. Oil comes from many places and is of different purities and different companies are more efficient producing/refining it but somehow it all costs the same at the pump?!?!?
Every sucessful private enterprise makes a profit "at your expense". Oil companies are no different.
I agree that is how the world works but it is a little (a lot IMO) fishy that when the rest of the US is grabbing its ankles they just happen to make record profits?!?!
That does seem incriminating until you realize that it also coincides with the end of the peak driving season, when gas prices normally fall anyway. Add to that the drop in prices after the post-hurrican scares.
I have not noticed a price fluctuation like this ( $.50 cents from a few weeks ago but a full dollar different form a quarter ago) in past years after peek driving time.
Prices go up because of limited supply and increased demand. High prices, at the least, serve to have a dampening effect on demand. That is to say, when prices are sky-high people and industry look for ways to save money, whether that be car-pooling, public transit, or fuel effecient vehicles. However, if prices remained low, people would keep consuming at the same growing rate. To look at it in a microcosm- in Atlanta when they had gas shortages- which stations ran out last? Obviously, the one's with the highest prices.
Ok, now as to the oil companies and their profits... Again, realize Im over-simplifying a bit, but let's say they are producing gasoline at near capacity and selling it for $2/gal and turning a very narrow profit. Suddenly, demand spikes and at the same time production takes a hit as well- the prices sky-rocket to keep pace with demand. However, the oil companies were producing near capacity before with a slight profit- now, they are producing at capacity, but are making profit from approximately the same amount of oil. What happens? They make big profits. Does that make them criminals? Not in my book. What should they do? Prices were going to go up- no two ways about it. If you bought your home before the boom for 100k, but sold it for 300k, should you be penalized for making an "obscene" profit and gouging your customer? Should you be forced to turn over anything in excess of 110k to the government?
If there was evidence of collusion or market manipulation, then people should be prosecuted- I have yet to see that evidence. However, most people arent even talking about that- they're talking about penalizing a company for being sucessful... makes no sense.
Lot of stuff here and I respect the way you have presented it but I only have time to comment on part maybe more later.:bow:
Prices didn’t have to go up, they chose to raise them and make the record profits. They could have easily had an average quarter/year by keeping the prices average but they were greedy and opportunistic and now there is a big stink coming from them and the gov and people are all looking at them saying wtf! If they would have played it cool they could still be rich and relatively under the radar but you cant show record profits at the expense of others who have already been kicked down and not have everyone looking to dish out a black eye for gouging them when they were down.
Demand didn’t spike it didn’t even make an unexpected change and neither did the supply (a few days of lost production from one or two companies shouldn’t hardly be concern for all the independent oil companies, unless of course they are all working together to control prices) there was only a scare of supply loss. The only thing that really changed was the price. And that’s reflected in the huge profits.:bow:
PS – Houses are a different ball game compared to oil, there is a great supply of them all over the place (someone could even build one), far different than the supply of oil. And there are massive tax penalties for flipping properties that have large value swings over short periods of time. Its not illegal but the gov watches.~;)
Demand didn’t spike it didn’t even make an unexpected change and neither did the supply (a few days of lost production from one or two companies shouldn’t hardly be concern for all the independent oil companies, unless of course they are all working together to control prices) there was only a scare of supply loss. The only thing that really changed was the price. And that’s reflected in the huge profits.:bow: Here's a financial article (http://www.boston.com/business/markets/articles/2005/10/12/pullback_in_gasoline_demand_called_a_blip_crude_rebounds/) from earlier in October that illustrates some of what I was talking about. There is more at play here than just evil bastard oil execs looking to rob you blind. ~;p There we actual short-term shortages following the hurricanes and without high prices curbing demand things could've possibly gotten ugly.
As a result of high prices, demand actually started dropping off earlier than it did the previous summer and as a result, prices are following.
http://www.econbrowser.com/archives/2005/09/gas_demand.gif
Red Harvest
11-10-2005, 22:34
Here's a financial article (http://www.boston.com/business/markets/articles/2005/10/12/pullback_in_gasoline_demand_called_a_blip_crude_rebounds/) from earlier in October that illustrates some of what I was talking about. There is more at play here than just evil bastard oil execs looking to rob you blind. ~;p There we actual short-term shortages following the hurricanes and without high prices curbing demand things could've possibly gotten ugly.
As a result of high prices, demand actually started dropping off earlier than it did the previous summer and as a result, prices are following.
http://www.econbrowser.com/archives/2005/09/gas_demand.gif
I wish that they had included zero on the scale. Many folks don't check the scales when looking tat these things.
That big dip at the end (9%) was Katrina, & pricing related, as well as the traditional end of the summer driving season.
On the topic itself:
I find the conclusions on both ends extremely flawed.
1. Oil is a commodity with pricing sometimes under the control of a foreign cartel (actually more of a single nation now...demand has risen enough to take control from all but the Saudi's.) So saying the oil companies are manipualting the oil price isn't quite true. What happened recently is that even the Saudi's couldn't control the price of oil.
2. Gasoline is a commodity, and they each do incremental debottlenecks to just keep up with the projected peaks. That is part of economic efficiency for them in maximizing profits. Yes, there is very good competition in this area. What is best for them (maintaining refining capacity in a few concentrated areas and close to peak production limits) is not best for the country or consumer. It makes us vulnerable to outages of any kind, especially during peak driving season...which also happens to be hurricane season.
3. The idea that the govt. is not doing anything of value with fuel taxes is pure bull manure. It is just a completely bogus comparison. Those fuel taxes are how your roads and bridges and such are paid for. Rather more efficient than having toll booths *everywhere* with a bunch of middlemen. (Ironically, the GOP should love it as it is a regressive tax that keeps their wealthier consitiuents property taxes lower.)
4. I don't see much point of a windfall profits tax...unless it is done very specifically to transfer the money directly into energy alternatives research, or efficiency credits for consumers, etc. That would be a positive use of heading in the right direction. Even then I have some problems with the idea.
5. The funny thing about the high profits is how much of the "Energy Bill" will go toward subsidizing the same industry, rather than working on efficiency, etc. I haven't seen a good actual breakdown yet, but one partial last night was showing about $20 billion for exploration/production type projects. I've heard of only a few billion total for renewables, research, and consumer incentives to reduce demand. Looks like they are still working on the wrong end of the horse...
Reverend Joe
11-10-2005, 22:52
Typical liberal class envy. Again the profits from the oil companies dont go to a scrooge Mc Duck character sitting there counting his money. Most of it goes to the shareholders who are ordinary americans.
Sure, Gawain. I hope you are happy off in Gawain's World. I'll just be sitting here, in the real world, where... what, who the hell is scrooge Mc Duck?
Mongoose
11-10-2005, 23:05
Perhaps you missed what I said earlier:
Supply and Demand.
Also, there are several big oil companies. Thus, no monopoly, which means one company. ~:rolleyes:
These companies are in ruthless competition and would decrease prices if they could.
Finally, see my first post.
Crazed Rabbit
No one said that. i stated that they OPERATE like a monopoly, with lots of gouging and little interest in competing. And i've said before that i'm a capitalist for them most part, but this isn't a free market. How can they not lower prices? they doing fairly well. ANSWER: They agreed not to so they and the other compaines could gouge with out mercy.
In "ruthless competion"? Sure they arehttps://forums.totalwar.org/vb/images/smilies/gc/gc-rolleyes.gif
This would be the first oligopoly of established players with ruthless competition.
I would not go as far as saying that there is a price cartel (at least it could not be proven), but the big oil companies certainly are intersted in "good market conduct" and will not hurt each other if they can avoid it.
^What he said
EDIT: Redharvet brings up a good point. Not all of this is becuase of the end of the oil industry in america.
yesdachi
11-10-2005, 23:34
Here's a financial article (http://www.boston.com/business/markets/articles/2005/10/12/pullback_in_gasoline_demand_called_a_blip_crude_rebounds/) from earlier in October that illustrates some of what I was talking about. There is more at play here than just evil bastard oil execs looking to rob you blind. ~;p There we actual short-term shortages following the hurricanes and without high prices curbing demand things could've possibly gotten ugly.
As a result of high prices, demand actually started dropping off earlier than it did the previous summer and as a result, prices are following.
So in order to save us from shortages they had to have record profits. They just had to. ~:mecry:
I’m going to send them a fruit basket.
Kralizec
11-11-2005, 00:15
Ruthless competition? I don't buy that. The only way you're going to have fair and effective competition if the technological barriers to entering the market were to dissapear. Meaning, that newcomers to the market are (nearly?) non existant because they'd have to overcome their complete lack of infrastructural means to effectively compete.
Another good example is the Dutch railroad system: there is only one network of rails, with one company exploiting them. It's impossible for anybody to start competing with them because a newcomer would have to construct a completely new network nationwide, a horrendously expensive and time consuming enterprise. Thus the NS remains the only railroad company, and as such it has degenerated into a muddy pool of inefficiency because of the lack of competition.
If there weren't such technological barriers in the oil market, there would be lots of newcomers. High profit margins attract newcomers, until the profit margin drops to a point where it's not really interesting anymore to enter.
Of course there isn't such a monopoly in the oil industry, but the relatively few "competitors" that there are have absolutely no interest in actually waging true competiton, calling that "price wars" wich are supposedly detrimental to society- much more their own interests, in fact.
Crazed Rabbit
11-11-2005, 00:43
Ruthless competition? I don't buy that. The only way you're going to have fair and effective competition if the technological barriers to entering the market were to dissapear. Meaning, that newcomers to the market are (nearly?) non existant because they'd have to overcome their complete lack of infrastructural means to effectively compete.
Apparently you don't know what you're talking about. The man who owned Tosco, a refining company, which he had built from nearly scratch, sold it to Phillips for around $20 billion several years ago.
That same fellow went immediately on to become the executive in another refining company that he built up, just as he did with Tosco.
All you have is some abstract, antiquited hypothesis. The barriers to the market are low enough, and could be even lower if we didn't have a bunch of useless regulation (not that all regulation is useless) and so many taxes. Do you think adding more taxes would make it easier?
Another good example is the Dutch railroad system: there is only one network of rails, with one company exploiting them. It's impossible for anybody to start competing with them because a newcomer would have to construct a completely new network nationwide, a horrendously expensive and time consuming enterprise. Thus the NS remains the only railroad company, and as such it has degenerated into a muddy pool of inefficiency because of the lack of competition.
That's a bad example. If NS is as bad as you say it is, a newcomer would be able to - if they were not too many gov't regulations - compete. Not with a nationwide network at first, of course, but with smaller runs. If there was a market, and capital, it could be done.
If there weren't such technological barriers in the oil market, there would be lots of newcomers. High profit margins attract newcomers, until the profit margin drops to a point where it's not really interesting anymore to enter.
See what I said earlier. Also consider that these high margins have been around for less than a year, so it's not like they been having record breaking years for a decade and tech barriers prevented entry. Check back on my first post and recall how oil companies are high risk affairs, and that five years ago they weren't making anything close to this.
Of course there isn't such a monopoly in the oil industry, but the relatively few "competitors" that there are have absolutely no interest in actually waging true competiton, calling that "price wars" wich are supposedly detrimental to society- much more their own interests, in fact.
How you any proof of oil execs saying that? Or is this just more assuming?
And if oil companies were just sitting on their butts in an oiligopoly, why are so many of them investing hundreds of millions in individual refineries? They are ruthlessly competitive, like all large businesses.
Crazed Rabbit
So in order to save us from shortages they had to have record profits. They just had to. ~:mecry:
I’m going to send them a fruit basket.I'm certainly not crying for them- they're doing quite well. But, Im not calling for them to be roasted on spits either.
I wish that they had included zero on the scale. Many folks don't check the scales when looking tat these things.
That big dip at the end (9%) was Katrina, & pricing related, as well as the traditional end of the summer driving season.Yeah, it exaggerates the drop in demand somewhat by not having zero. Also, I wish it had carried the 2004 graph on a bit further to the right.... but oh well. :shrug:
Red Harvest
11-11-2005, 02:01
Yeah, it exaggerates the drop in demand somewhat by not having zero. Also, I wish it had carried the 2004 graph on a bit further to the right.... but oh well. :shrug:
Yep, and the comment wasn't meant as a knock at you since you were just posting their graph (in case you wondered.) It's just one of those things that gets my attention. To be fair, the automatic scales often do stuff like that...but too often folks won't adjust the scale because it is "sexier" if they leave it like that.
Kralizec
11-11-2005, 02:03
About the NS, since about 10 years the NS is forced to tolerate other companies who wish to exploit their railroad system, because otherwise competition would be impossible. (competition is still mostly limited to transport of goods, though)
That was part of a government plan to turn the NS from a state run institution into a more market orientated company. Any dutchman will testify though that the NS is still shitty as hell and I think it is in great part to blame on that there are no competitors that they could lose their customers to.
Regarding oil companies, I concede that I probably know to little about it.
Crazed Rabbit
11-11-2005, 05:19
That was part of a government plan to turn the NS from a state run institution into a more market orientated company. Any dutchman will testify though that the NS is still shitty as hell and I think it is in great part to blame on that there are no competitors that they could lose their customers to.
Well their's your problem, it was a state run monopoly that is transitioning to the real market. Not the best example to rag on capitalism.
To be fair, the automatic scales often do stuff like that...but too often folks won't adjust the scale because it is "sexier" if they leave it like that.
Heh. I know that in a city near where I live, there was a big hulaballoo one year when people tried to get boats banned from the city lake. There argument was that the boats released some toxin from their engines into the water.
The funny thing was, the city paper carried a graph showing how the levels of the toxin in the lake compared to EPA limits, and the line for the toxin was appeared to be a straight line, way below the limit. They had to show a close up of only the line measuring the toxin to even show a very (parts per hundreths of million) slight change between summer and winter (when there are no boats).
But those wacko environmentalists kept on insisting it was a big danger, etc. etc. I suspect some outside group had sponsered and encouraged them, as it was never an issue before (and rightly so).
Crazed Rabbit
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