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Originally Posted by itvnetop
By the Numbers
Exxon posted a 30% profit increase during the last quarter from the previous year... the annual 36 billion earning was the largest net profit in US history. Overall, the 12 US oil companies in the S&P saw close to a 50% increase over the fourth quarter.
We're not using twice as much oil as the year before... supply and demand is a part of the equation. but there's a correlation between what we're paying at the pumps and the increasing belt size of these fat cats.
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Like I said before, these profits are a result of inelasticity on gas prices. Oil companies have to pay for oil in order to make the gasoline. When the price of that oil goes up, they jack the gas prices up to compensate. But when the price of oil goes down, they don't drop gas prices as fast because they know we'll keep paying the high price, because we all NEED gas. It's something many of us can't live without. So Big Oil profits are not driven by the RISE in gas prices, their driven by the FLUCTUATION in gas prices. The bigger the swings up and down, and the more often they happen, the bigger the profits.
That's not price gouging, that's just basic principles of business. You charge the customer what the customer is willing to pay. You're willing to pay for it aren't you? As long as you keep handing over the cash to drive your car, there's nothing to complain about. That's life.