Record Gas Prices = Record Oil Co. Profits

College Confidential Community
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<p>Record Gas Prices = Record Oil Co. Profits. Now that's a pretty simple equation isn't it? But the oil companies deny gouging - they say that it's a simple matter of "market economics".</p>

<p><a href="http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20060731/OPINION01/607310311%5B/url%5D"&gt;http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20060731/OPINION01/607310311&lt;/a>
<a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/07/30/BUGRBK71ND1.DTL%5B/url%5D"&gt;http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/07/30/BUGRBK71ND1.DTL&lt;/a&gt;&lt;/p>

<p>Someone smarter than me please explain why Congress isn't doing something to address this situation:</p>

<p>1) Americans paying through the nose at the gas pump (not to mention the "pass through" cost of inflation for everyday items due to higher gas prices)
2) Oil companies reaping historic record profits (not historic oil profits, mind you, we're talking HISTORIC CORPORATE PROFITS - Billions of dollars) including massive executive bonuses / golden handshakes</p>

<p>Isn't it time for some Congressional action here? Some kind of "windfall" profit tax of some sort or some kind of "anti-gouging" provision? - esp. in the face of continued increasing gas prices?</p>

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<p>Because Americans are still willing to buy it to support the suburban lifestyle. Plain and simple. And, I laugh when I watch the news; everytime they get someone to complain about the prices on camera, they're filling up a hummer.</p>

<p>So, until people decide their suburban lifestyle isn't worth the 2.89/gal, it's pretty much their own fault, and oil companies will keep charging that much. I don't complain-- I live closer to work and can use a bike. And, when I go to college, I can just bike around the city. Plus, I'm getting a motorcycle soon (gets 75 mpg :) ) so again, no biggie in prices. I'm not complaining because I actually DO something about my situation as to not make myself so dependent on gasoline. If people don't want to pay so much per gallon, they should lower their dependence on it and force oil companies to lower their prices. Unfortunately, you're going to keep on seeing the suburban housewife complain while filling up her SUV for her ONE child, and her husband drive home in another single-driver car. Change or get used to it I say!</p>

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<p>
[quote]
Isn't it time for some Congressional action here? Some kind of "windfall" profit tax of some sort or some kind of "anti-gouging" provision? - esp. in the face of continued increasing gas prices?

[/quote]
</p>

<p>No it's time for people to stop destroying the planet for the rest of us because of their selfish need to drive to the grocery store two blocks away. </p>

<p>Seriously though, I agree with the above. We drove a lot, I even used to get my parents to drive me to school three or four days a week which was a 30 minute walk (but a 5 minute drive) [pretty pathetic, I know], but then I grew more enviornmentally conscious and a better consumer and decided it'd be worthwhile to wake up earlier and just walk-- enjoy the fresh air! As a family we began to walk more to get everywhere, we walked to the grocery store, and instead of going once a week and buying a lot to store (so that we couldn't carry our things back home) we walked several times a week and bought in smaller 'portions' so to say, or took the bus to the shopping centers, and just made a 180 degree flip, and then once we moved we sold our car.</p>

<p>I understand that a lot of people have different situations and what seems like good excuses-- so to say. But in my personal experience, many people are simply not willing to step out of their comfort zone. If everyone just practiced a -little- moderation, changed their lifestyle just a -bit-, then theese companies would not have these huge profit margins. </p>

<p>Well, at least in my opinion.</p>

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<p>Should shut the hell up about "high" gas prices. I've seen prices up here in Canada hit $1.35 a litre (a galleon is about 4.4 litres, that's $5.00 a galleon). In Europe they can pay up to $4.00 a LITRE at times. </p>

<p>There shouldn't be any government regulation of gas prices, especially if it serves to lower the cost, that would not only be bad from an environmental outlook but it's economically unsound as well. Government mandated price ceilings usually end up hurting more than they help.</p>

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<p>"2.89/gal"</p>

<p>lol wow, I think California is way above that. Illinois is averaging around like what, 3.17-3.30? And ya ICrisis, haven't you heard? America is better than Europe and Canada. Duh, everyone knows that.</p>

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<p>Don't try and goad me into an America vs. the World "debate". I'm just saying that if these other industrialized countries can get by with MUCH higher gas prices, so should you.</p>

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<p>Precisely. My parents enjoy living in the suburbs for the cheaper home, so they're willing to pay a little at the pump. They don't complain. In fact, we always say "at least we're not in Europe" haha.</p>

<p>
[quote]
2.89/gal

[/quote]

Yeah, Atlanta is pretty cheap in terms of gas per gallon (it used to be WAY cheaper before they implemented road improvement taxes). However, altogether, we pay the most of any city due to our sprawl (many of my friends' parents drive 30-60 miles to work). However, lower prices for everything compared to many metros while still having incomes comparable to Cali and NYC keeps our relative COL fairly low.</p>

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<p>"at least we're not in Europe"</p>

<p>^werd...a litre of petrol is 4 pounds</p>

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<p>None of us are paying through the nose for oil. Don't exaggerate. </p>

<p>I'm annoyed that citizens constantly look toward the American Government as the solution to all their problems. High gas prices? - Ask Congress for help! Call! 1-800-WHINE </p>

<p>It's always fair to tax those who built a company, spent time and effort to create a successful company to those who are complaining about gas prices. A bit unfair don't you think? What do you propose, that Congress pass a law that the companies CANNOT AND MAY NOT make a profit?</p>

<p>Well I'm sorry then.</p>

<p>Welcome to a country that believes in capitalism, not communism.</p>

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<p>
[quote]
A bit unfair don't you think? What do you propose, that Congress pass a law that the companies CANNOT AND MAY NOT make a profit?

[/quote]
</p>

<p>First of all, I'm not proposing that companies should not make a profit. </p>

<p>Next, the major problem as I see it is that OIL CO's are operating as textbook OLIGOPOLIES (and yes there is plenty of precedence for gov't action against collusion.)</p>

<p>For example, if Starbucks started sellling their coffee for $50 per cup instead of $5 (which incidentally is way too much for such crap coffee) - then you'd see a mass exodus out of your local Starbucks. People would go to Coffee Bean or your local coffee shop, or they'd drink water or cola - the point is - people have choice due to a highly competitive market place.</p>

<p>If Starbucks one day bought up all of their qausi-competitors (Coke, Pepsi, Water companies, etc.) and the marketplace was only left with colluding entities (an oligopoly, say Starbucks, Coffee Bean and a few others) and they were the ONLY refreshment makers around, and further, they all decided to charge $50 bucks for a cup of coffee, you'd be stuck.</p>

<p>NOW, the difference here is - YOU CAN LIVE WITHOUT COFFEE - you can't live without oil / gas. People need to drive their cars, people need to take flights, people need to heat their homes, goods need to be delivered, etc...</p>

<p>Further for those people who say, "ah screw those people who drive those gas guzzling SUV's, I drive a Prius or I don't even drive" ... DO YOU ACTUALLY BELIEVE that high oil prices DON'T AFFECT YOU? Are you kidding me? Virtually everything that you purchase in your local store has to be manufactured and distributed from somewher (i.e. it doesn't magically end up in your local store) and the rising cost of oil is most definitely calculated in the price that rings up on your register. It's called the "pass through" effect of inflation.</p>

<p>Here is a recent article on Bloomberg discussing the global oil price increase "pass through" which may very well lead to a coming recession: </p>

<p><a href="http://www.bloomberg.com/apps/news?pid=20601103&sid=a3HSBVAyFSDk&refer=us%5B/url%5D"&gt;http://www.bloomberg.com/apps/news?pid=20601103&sid=a3HSBVAyFSDk&refer=us&lt;/a&gt;&lt;/p>

<p>So please, save me your sanctimonious crap - rising oil prices AFFECTS EVERYONE.</p>

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<p>but in a traditional monopoly it's one company that owns and regulates a certain product...in the case of oil, its a bunch of companies doing the same thing. To use your Starbucks idea...its like Starbucks, Coffee Bean, and your local Coffee Shop all going to $50. And since they're all looking to make a profit, not one would think to lower prices, because people are buying coffee anyway. Now granted...switching from coffee to soda and water would be like switching from gas to hybrid or electric...but then what if the oil companies bout up car manufacturers?</p>

<p>And im just arguing your monopoly point here...nothing else</p>

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<p>To further illustrate my point, let's simplify the argument for a moment and take the classic lemonade stand.</p>

<p>Say I am selling lemonade for 5 cents a cup (or say $5.00 for a jug). Say those lemons, sugar, water, etc. cost me $3.00 per jug - i.e. I'm making $2 profit for every jug sold.</p>

<p>All of the sudden, the lemon tree neighborhood gets terrorized and the cost of lemons shoots up to $10, and therefore my total "cost" goes up to $15.</p>

<p>But then, I turn around and sell my lemonade for $50 per jug. In other words, if I'm raising my prices - IN LOCK STEP WITH MY MATERIAL COSTS (which is what oil companies are arguing) - then I should still be making roughly the same amount of profit (i.e. ~$2... in other words, if my base cost is around $15, then I should be selling my lemonade for ~$17).</p>

<p>But as it is, BIG OIL are ringing up HISTORIC PROFITS (and I'm not just talking about historic oil profits, I'm talking about HISTORIC CORPORATE PROFITS - Billions of dollars folks). </p>

<p>Fact is BIG OIL have market power. BIG OIL are gouging the consumers. If they are raising prices only in lock-step with their base cost, then it begs this simple question:</p>

<p>"Why are they recording record profits?"</p>

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<p>
[quote]
but in a traditional monopoly it's one company that owns and regulates a certain product...in the case of oil, its a bunch of companies doing the same thing. To use your Starbucks idea...its like Starbucks, Coffee Bean, and your local Coffee Shop all going to $50. And since they're all looking to make a profit, not one would think to lower prices, because people are buying coffee anyway. Now granted...switching from coffee to soda and water would be like switching from gas to hybrid or electric...but then what if the oil companies bout up car manufacturers?

[/quote]
</p>

<p>OK, perhaps Oligopoly is a better word (i'll edit to reflect that), but basically what we are talking about is "collusion":</p>

<p><a href="http://en.wikipedia.org/wiki/Collusion%5B/url%5D"&gt;http://en.wikipedia.org/wiki/Collusion&lt;/a&gt;&lt;/p>

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<p>yea I agree with that</p>

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<p>Ther title should read</p>

<p>"Record Gas Prices = Record Gov Profits ''</p>

<p>There is no such thing called 'gouging'.</p>

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<p>My keyboard is bust. When I type a key, the one next to it also registers. I have to read through and delete the extra characters.</p>

<p>
[quote]
I've got two degrees from two Ivy League institutions pal, don't need another one.

[/quote]

If they are not economics degrees, then this is an appeal to authority. So other than just grader* inflation, the Ivys are also actively involved in ego inflation I see.</p>

<p>edit: *See what I mean, damn keyboard.</p>

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<p>Here's something interesting. You will NEVER hear people ***** about these:</p>

<p>-A gallon of milk = $3-4/gal
-20 oz Dasani water is $1.10. Get six (to get 120 oz, about 8 oz short of a gal) and that's $6.60/gal for bottled WATER.
-A small Starbucks specialty coffee can cost $3-5. I don't want to know how much this is per gallon.</p>

<p>I could go on.</p>

<p>So, next time you complain about gas, ask you local convenience store why cashier you are being charged up the arse for these items, including water, the substance you need to live!</p>

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<p>
[quote]
Means you didn't put me on ignore it seems.

[/quote]
</p>

<p>No I did not. </p>

<p>Look, i'll be the first to apologize if i came off as a bit defensive. As I said, i'm wholly uninterested in engaging in a flame contest, and i'll leave it at that.</p>

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<p>OK, so that it's in plain sight for everyone to see:</p>

<p>iloveagoodbrew's initial post on this thread starts by calling me: "an idiot"</p>

<p>my initial reaction naturally is to defend myself. this tit for tat degenerates further, so:</p>

<p>i try to take the high road, apologize for engaging in what is clearly an invitation for a flame contest (something i am wholly uninterested in enganging in), and i get:</p>

<p>
[quote]
Don't even pretend to be a decent bloke with your fake 'apology'.

[/quote]
</p>

<p>What more can I do here folks?</p>

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<p>Nothing, I am done with this atrocious thead. I will be ther bigger man and resist your attermpts to start a 'flame war', whatever that might be.</p>