By JLP | October 30, 2005
A lot of people are upset at the fact that oil companies like Exxon, Chevron, ConocoPhillips, BP, and many others are showing record revenues. Of course these same people weren’t feeling sorry for the oil companies back when oil was at $10 per barrel. What we seem to forget is that one of the major factors that affects how much we pay at the pump for a gallon of gas is that of taxes. As The Tax Professor points out with this post, tax revenues from gasoline exceed oil company profits.
Don’t get me wrong, I don’t like paying more for gas. In fact, I hate it. But, I also understand supply and demand. If the demand for a good goes up, while the supply of that good basically stays the same, the price of that good can go nowhere but UP. That is what we are seeing right now. With China and India moving toward capitalism, they are hungry for cars and the fuel that makes them go. The oil companies just happen to be producing a product that is in high demand and are reaping the rewards.