Scrooge Oil Corporation
Posted by Exile on February 2, 2008
If you drive your car every day, as I do, to get to work and back home gain, you will have also have felt the difference in your wallets capacity to keep you rolling. High oil prices, combined with the “greeen” surcharges have made life more expensive for all of us. I pity the poor suckers that are still using oil to warm their houses. Their heating bill has doubled in the past 18 months. The Danish government is pleased with the whole affair. They add the mandatory EU green surcharges plus their own bogus green surcharges on top of the market price, then take another twenty five percent of that total price again as value added tax. The state has never had it so good. So we won’t be getting any help there.
But why are we really paying so much?
(For the benefit of my american readers, we pay about 8 dollars per US gallon for gasoline at the gas station.)
The oil companies tell us that it is the high price of crude oil that is to blame. They are barely able to buy and refine enough and because the supply is down, they have to buy at inflated prices and then are forced to pass this on to the customer. Poor oil companies, bravely struggling to keep us mobile and warm, and apologising for the need to raise prices.
I can read today, that two of the largest American oil companies are posting record profits. Hardly a sign of an industry in danger of financial collapse. Exxon Mobile and Chevron have published their profits for the last quarter of 2007. Exxon’s quarterly profit went up by 14 percent compared to the foregoing year and reached a staggering 11,7 billion dollars – in just three months. Thats about 5 million dollars per hour every day in the last quarter of last year.
Chevron did better. Percent wise. Their earnings went up by 29 percent, or up by 4,9 billion dollars for the quarter.
Both broke the existing record for annual earnings for American companies for the highest annual income ever in 2007. Exxon, the new record holder, broke the record for annual earnings by a massive 40,6 billion dollars.
Royal Shell delivered its results last thursday. It too, set a record breaking annual earnings total for British companies with earnings of 8,5 billion dollars. That’s 3 million dollars every hour in the last year.
Wanna know what is really costing you money at the gas stations?
Nothing more, and nothing less. If they have a 150 percent mark-up on their products, and that is probably a lower estimate than is true since they are gaining increased earnings, it doesn’t matter how much they pay for crude oil. If they had to pay 200 dollars for a barrel, they would get at least 500 back. They will always, at least, double their money. At our expense. The true price of oil has very little to do with it.
I’m not saying they shouldn’t make a profit. That’s what business is about. But do they really need to make so much on what has become a necessity?
For those that are interested, the standard barrel of crude oil or other petroleum product (abbreviated bbl) is 42 US gallons (34.972 Imperial gallons or 158.987 Liters).
Out of one barrel of crude you will get about 20 US gallons of gasoline. About half. The rest will be reduced to diesel and other oil products such as lubricants and tar.
All sellable at extremely high prices. Think about what you pay per gallon, or liter, for gasoline and do the math. After removing the state taxes and surcharges, I think you will find, that we in europe pay about 250 percent of the buying price of gasoline.
No wonder they broke records.