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A very fair qeustion, FW!
Here's the answer: You seem to be assuming that demand for the products they sell is a constant. It isn't. Here in America, we are in the midst of our seasonal peak demand for ga$, and our year-to-year demand is increasing. Also, more ga$ is being used overseas. And this is not to mention other petroleum products, such as plastics.
Assuming you make seven cents a gallon profit in ga$, you will make more money on ga$ without changing your markup if you sell more of it. (Kind of like the gummint taking in more tax revenues without raising tax rates because more income is being taxed, no?)
As for why gas prices go up (and down, as they do), it's much more than the oil companies. You have several forces at work, as I've explained elsewhere:
- Investors in the futures market
- OPEC (you know, those foreign countries that actually own the oil reserves and sell the stuff to the oil companies; you want to see excess profits, just look at their membership)
- Demand (touched upon already)
- Inability of supply of refined products to meet demand.
- Instability in the Middle East.
Blaming the whole thing on oil company greed betrays ignorance that is unbecoming of you (although, to judge from his past ravings, not of Dennis Kookcinich).
Truth to tell, there are some among the anti-big oil/pro-environment crowd who wouldn't mind seeing gas go to $5 a gallon or more as a means of cutting demand for it.
posted by
WriterofLight
on July 29, 2006 at 7:57 PM
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I have a question for you:
The oil companies claim that THEIR costs have gone up, so that's why the price of energy has gone up. Why then, is their profit setting records? Why wouldn't their profits remain about the same as when the price of a barrel of oil is low?
The profit isn't the same. They are using the excuse of higher costs to raise the price of gasoline. Are you championing shareholder rights? Well heck, if you want to protect your precious ExxonMobile shareholders, why not charge $5-$6 a gallon of gas?
posted by
fwmystic
on July 29, 2006 at 9:05 AM
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