Oil Company Profits

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.

2 thoughts on “Oil Company Profits”

  1. I wonder exactly how the profits were made. This whole amount was not made in america. How much of this profit is from selling oil to emerging markets. What is the price of a gallon of gas in other countries? Is it just as high here. To be upset that The Big 5 are making billions seems counter productive. Now that the big 5 have full coffers what are they gonna do with it? Is that the real issue?

  2. Yes, I too would like to know what the cost of gasoline is in countries like India and China. Posts about the cost in GB don’t really pursuade me much because in a small country like that, where people live very close to where they work, they don’t have the same needs we have in the US where we must travel more distance for work. Many people in EU have the ability to walk or ride a bike to work. I would not mind that if I didn’t have to walk 15 miles in the summer heat in Texas. So our needs and our economys are very different. Most people over there don’t have as much need for the gasoline as we do, which seems kind of a quirk in the alleged assumptions about supply and demand driving prices. Doesn’t seem to hold as a true fact in the case of gasoline.

    None of it makes any sense to me. Why would natural gas prices jump so high in our country when oil prices increase? Natural gas is from our own earth and not in any way related to getting oil out of the ground in an arabian nation. Economics is driven by pure unadulterated greed and then they use any excuse (futures, commodoties, stocks, politics, who knows what) to drive prices higher and higher. The masses of middle class workers pay for it more dearly than any other population group. It is criminal and a sin and we pay for their sin.

    Getting to work is a necessity. I have never been on any kind of subsistance in my life, but sometimes I think economics being what they are may push me into it some day soon. It is getting harder and harder to survive and pay for necessities. The standard of living of this great nation is dropping quickly and we will be equalized with emerging third world standards of living soon. Is that what is supposed to happen? Can’t pay for gasoline to get to work, lose job, begin living in shanty because no income for rent, have to have food stamps and housing subsistance. See where we are headed? If only we had not gone into Iraq.

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