Price Gouging? a question

"Price Gouging", "Price Fixing" - call it what you want but, the Oil Companies are making a killing. All at the expense of the consumers. $8 billion in profit per quarter (Exxon) sounds like a lot to me.

Estimates of the total current gasoline taxes (in cents per gallon) , including all federal, state, and local taxes in Washington is about 46.4 cents per gallon. This money is supposed to go to road repair (primarily). When was the last time you witnessed any actual road repair taking place? New roads don't count - that comes out of another of your tax pockets.

Gold prices don't count either because nobody HAS to buy gold, but most everyone needs to by gas or one of the other products that high gas prices affects. Comments pertaining to hospital costs are correct and that is another industry where consumers are held captive.

Profit rates are not important! The only thing that matters is how rich are those Oil Companies getting off of us...Might they have happy with a little less? Say, $6 billion?

Next time you buy gas, stand in the driveway of that station and look around. All the other stations are selling for the same price, pretty much. Why? Because prices are fixed - AND THERE'S NO COMPETITION!
 
lloyds":2ic2kfyp said:
True. I have a daughter who has worked many years for one of the larger providers in portland and 80% of the patients that come through their doors have no, or limited, ability to pay. From what I have read this is not an isolated problem, this is nationwide. And the percentage in the trauma wards is even worse.
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Under this health care sub thread -

Put everyone, any age, on Medicare Part A and require a premium for Part B and D (or elect to pay for separate insurance). Instant "Universal Health Care."



Don
 
Exxon Mobil made 8.3 Billion the last quarter from an investment of 90 to 100 billion dollars. That is not a bad profit, but not what I would call price gouging. Many companies make a larger percentage of profit on their investment. I will bet we have people here with businesses that have a larger profit margin than Exxon Mobil. Is anybody that makes more than a 9% profit on their business a price gouger? We are paying twice that amount in taxes (17 billion) on the gas we use and what are we getting in return for our taxes? That is where the real price gouging is.
 
That's "$8.4 billion, on the heels of record earnings of $10.7 billion in the previous quarter." Projected over the year, that would be $38.2 billion approximately. Isn't that closer to an ROI of about 42%?

At the risk of being repetitive:
Profit rates are not important!
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However, you're right that taxes eat up a bunch of our money.
 
oldgrowth":5y16jz3m said:
Many companies make a larger percentage of profit on their investment. I will bet we have people here with businesses that have a larger profit margin than Exxon Mobil. Is anybody that makes more than a 9% profit on their business a price gouger?
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Feh...stats can be twisted any which way you like. Let's have some fun with profit margins.

Let's compare Exxon Mobil, the largest company in the US, to their nearest competitor in terms of revenue - Wal-Mart.

2005 Stats from Wikipedia:

Exxon Mobil had 2005 profits of $36.13 billion, sales of $371 billion (9.7% profit)
Wal-Mart had 2005 profits of 11.2 billion, sales of $316 billion (3.5% profit)

Exxon Mobil has 88,300 employees
Wal-Mart has 1.7 million employees

So...Exxon Mobil made 268% more profit than Wal-Mart, while taking in only 17% more revenue. And, they only have to pay 5% of the employees as Wal-Mart.

So yeah...based on the above "statistics", Exxon Mobil is seriously gouging folks. Compared to their nearest competitor in terms of revenue, their profit margin is 6.2% too high - or, an excess profit of $23 billion dollars in one year. That's about $76 they owe every man, woman and child in the US - just for last year.

Aren't statistics fun?
 
dogon dory":3ep9qtd2 said:
OK, survey time. So how many of you folks ponied up and wrote a welfare check to an oil company back in the 80s when oil was $8 a barrel and they were losing money? I mean, you know, for the good of the country so our energy supply wouldn't be threatened or taken over by foreign companies. Oops, I forgot. BP and Shell are foreign companies. Which bought out Gulf, Chevron, Arco, and Texaco, all American companies back around that timeframe.
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Is that why they ran a tanker aground in 1989 and we never saw sub $1.00/gal gas again? :lol:
 
Well there you have it - using the right math answers the question. I know in the industry I work in, when the raw material cost goes up, the profit goes down. In '05, the raw material for the oil industry skyrockets, and so do their profits. Maybe we're using the wrong word, too. Gouging sounds a little tame.


Added on Edit: Oops, the post I was referencing about wrong math/right math is gone already. I have to remember to use the quote feature.
 
During the gas shortage in the 1970's, Shell placed a full page ad in the Seattle Times to explain the price increases. I'm still kicking myself for not archiving the ad.

I can't remember the numbers, but they broke down the price increase, say $.37 per gallon. A few cents went to the refineries, some went for increased shipping costs, some went to the retail outlet, etc.

Then they indicated that 6.3c/gal was due to the increase in $/barrel from Saudi Arabia. Then they indicated that 4.7c/gal was due to the increase in $/barrel from Argentina.

Remember, now, this was not somebody shooting from the hip. This was a full page nation-wide ad from Shell.

After looking at the numbers for awhile, I says to myself, says I:

"Wait a minute! If I am putting Saudi gas into my car, why am I paying an additional 4.7c/gal for the Argentine gas you are putting in your car??? And why are you paying an additional 6.3c/gal for the Saudi gas, when you're pumping Argentive gas?"

So now we come to the real questions:

Are the CFO's for Shell really this dumb? I mean it doesn't take a rocket scientist to see that these numbers don't add up. (Actually, they DO add up, gallon, after gallon, after gallon . . . . )

OR: They know damn well that this analysis is total B.S., but we're too dumb to notice?

Conclusion: They are really, really dumb, or the analysis is clearly fraudulent. It has to be one or the other.

Like I said, I wish I had kept a copy. It would be just as dramatic now as the famous picture of Truman holding up the "Dewey elected President" newspaper.

iggy
 
I think you guys are using fuzzy math, that is the math taught in most schools nowadays so lets use real numbers.

Exxon/Mobil

2005
Income … 370,680,000,000.00
Profit …..… 36,130,000,000.00
That equals a profit of 36,130,000,000.00 divided by 370,680,000,000.00 = 9.747% of their income for the year 2005 is profit.

2004
Income … 298,035,000,000.00
Profit …..… 25,330,000,000.00
That equals a profit of 25,330,000,000.00 divided by 298,035,000,000.00 = 8.499% of their income for the year 2004 is profit.

2003
Income … 246,738,000,000.00
Profit …..… 21,510,000,000.00
That equals a profit of 21,510,000,000.00 divided by 246,738,000,000.00 = 8.717% of their income for the year 2003 is profit.

The profit is taxed by the government. Dividends are paid to the stock holders and the money is taxed again. If your Exxon shares go up in value and you sell, the government taxes that money again. When you die, your spouse or kids pay taxes on that money again. The taxes and governmental regulatory charges you pay on a gallon of gas, is more than four times the amount of profit, Exxon made on that gallon of gas.

You decide who is gouging who.

You are directing your anger at the wrong people. It should be the politicians for bowing to the special interest groups. In this case it is the so called environmentalist for putting us in this situation.

My rant for the day.

on edit
Added on Edit: Oops, the post I was referencing about wrong math/right math is gone already. I have to remember to use the quote feature.
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It's back Mike. I had some incorrect numbers I wanted to correct. Sorry about it. Didn't realize anyone had time to read it. It was there for only about a minute when I caught my mistake.
 
Why can home depot sell me 2x4's from Germany cheaper than 2x4's from here in the north woods!

Why is oldgrowth so good with math?

Why does Iggy remember a picture of Truman?

Why does da nag know so much about walmart?

Why
"Another minor detail about your own industry. "
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dog on dory?

Why is there no logic in emotion?

Why repower with suzuki, why? :moon
 
Argh

We just gotta shut this thread down soon. It's too distracting!

I'm too busy trying to decide who to vote for to replace our 50th District Congressional seat recently vacated by "Duke" Cunningham who will be vacationing at the Greybar Hotel for the next 88 months.

First we picked between 15 Republican candidates and two Democrats to get down to the final two. Now we have to endure constant TV ads, paid for by a National party, that are so filled with lies and distortions that their own local candidates are publicly distancing themselves, and one former candidate is actually speaking up for the other party's candidate.

Have we become a country where the Minority Rules? Or is it just a bastardized version of the Golden Rule (Them with the gold rule)? Or do we live by the Media's version; To hell with good journalism, controversy rules?

Oh well, it could be worse, I could be living in New Jersey.... :moon

Don
 
Another minor detail about your own industry.
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I guess I left out a minor detail of my own. In truth I was referring to the specific outfit I work for in the paper industry, because I don't presume to know very much about it on any higher plane. More correctly, I don't really care to learn much more about it. Oh - the detail: Georgia Pacific doesn't own trees; they purchase the raw material. Being so large a corporation, they can likely influence the price they pay, but they cannot control it. And they certainly do not hope for the costs to go up so that profits can follow exponentially.
 
Let’s try one more example using real numbers. No fuzzy math again.

Most of the increased profit for Exxon/Mobil has come from increased demand, (more gallons of gas sold) not an increase in the profit margin.
2005
Income … 370,680,000,000.00
Profit …..… 36,130,000,000.00
That equals a profit of 36,130,000,000.00 divided by 370,680,000,000.00 = 9.747% of their income for the year 2005 is profit.

2004
Income … 298,035,000,000.00
Profit …..… 25,330,000,000.00
That equals a profit of 25,330,000,000.00 divided by 298,035,000,000.00 = 8.499% of their income for the year 2004 is profit.

2003
Income … 246,738,000,000.00
Profit …..… 21,510,000,000.00
That equals a profit of 21,510,000,000.00 divided by 246,738,000,000.00 = 8.717% of their income for the year 2003 is profit.
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Looking at the above numbers

Profit increase from 2003 to 2004 is 25,330,000,000.00 – 21,510,000,000.00 = 3,280,000,000.00 in additional profit. If the profit margin was the same for 2004 as 2003, they should have made .08717 times 298,035,000,000.00 = 25,980,000,000.00 – 25,330,000,000.00 = 650,000,000.00 more in actual profit than they made. The increased profit was because of more sales, not a higher profit margin.

In 2005 most of the increased profit was because of more gas sold, not because of the higher profit margin. If the profit margin were the same as 2003, their profit would have been .08717 times 370,680,000,000.00 = 32,312,000,000.00 instead of 36,130,000,000.00.

From 2003 to 2005 the increased profit from an increased profit margin is 36,130,000,000.00 – 32,312,000,000.00 = 3,818,000,000.00 The increased profit for the same time period from increased sales = 36,130,000,000.00 - 21,510,000,000.00 = 14,620,000,000.00 - 3,818,000,000.00 = 10,802,000,000.00

Is it Exxon’s fault there is more of a demand than supply? Or does the blame belong somewhere else?

Now I am not a fan of big oil. I think they are too big and there is not enough competition, but taking your anger out on big oil is miss-directed. You should be mad at the environmental groups that forced the current energy policies on us and those members of congress that went along with it. Can’t you see that they are trying to blame their failed policies on someone else?
 
oldgrowth/Dave - You're correct. There's lots of blame to spread around: greedy oil companies, environmentalists, dumb politicians who bow to the special interest groups and lobbyists. And, of course, we have to shoulder part of the blame ourselves for electing idiots who ignore their constituents in favor of the corporations, lobbyists, and environmentalists.
 
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