>Snip.....
>From: "R. Denton" <foxriverkid@earthlink.net>
>Subject: Re: Oil Profit
>
>Jim,
>
>I'm not sure what you are trying to say. Are you justifying the high prices at
>the pump? I hope not.......
Bob,
I'm not trying to justify the high price at the pump. No way. I was just
looking at the breakdown of a barrel of oil into its constituent parts and what
they might sell for. Imperfect for sure. I guess my point is that if the cost
of oil doubles, and the selling price doubles, then the total profit dollars
would double while the profit percentage stayed the same.
So, you made twice as much this year as last year. 'Course your costs doubled
too.
Also, if you sell more you make more. I'd be more interested to look at the
long term net profit of the industry - sure, you can expect some economy of
scale, but if the net is constantly rising, (the retail price is rising faster
than the cost-of-goods-sold, in this case bulk oil) then one could argue that
the pump increase is not a function of oil increases.
Somehow supply and demand fits in there too - which is what made the lot next
to my house worth more than my lot (same size) with a house on it. Then some
bozo puts a half million $ house on it and the county says - "well, yours must
be worth that too - here's your tax bill - have a nice day". Ouch.
Thanks,
Jim W.
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