Larry Daniels wrote:
>Buster, "profit" would be how much more we paid to put gas in our tanks than
>what it cost them to put it there.
>The cost, adjusted for inflation, pales in significance to what it "could"
>cost if we weren't getting ripped off by the oil companies. Since we don't
>have a damn bit of choice, we are victims of whatever they feel like charging
>us. Ergo, $36 Billion (with a B) in profits. Go ahead, justify that.
How many people here scream and holler about Google's profit's? Hmmmm.
I don't hear a voice in objection. OK, last year Google made 45.5 cents
on the dollar in profit. Does anybody scream and holler when they go
through the drive-through at McDonlds where they pay 11.6 cents on the
dollar every time they order a Big Mac? How about complaints over the
20.1 cents on the dollar when men pay for Viagra and its producer,
Pfizer. The reality is that a lot of other industries from software
to semiconductors and banking to biotechnology make more money on
every dollar sold than do the oil companies.
People tend to piss and moan over Exxon's profits simply because it is
by far the largest oil company in the world. If it were split into 10
smaller companies, the amount of their profit would not raise too many
eyebrows. Of course the cost of gasoline would rise simply because of
the benefits of economy of scale that come with a company's size.
And Alan, you have to admit that in the U.K. especially, the rise in the
cost of oil comes as a welcome bit of news the Gordon Brown (for you
Yanks, he is the Chancellor of the Exchequer, or treasurer)? Why?
Simply because in the U.K., government taxes amount to 67% of the cost
of petrol at the pump. The higher the cost of oil, the most tax going
to the government. (It is the same here, but on a smaller scale, and
varies from state to state.) If the U.K. taxed petrol at the same rate
as the U.S. taxes gasoline, the bottom line cost to the consumer would
be about the same.
Importantly, the price analyst for Automobile Association, the
consumer's defender, this week observed, "We are not being ripped off at
the pumps. "Oil companies cannot set the world oil price, which is set
on the world markets."
She zeroed in on the underlying reason for volitile oil prices: the
western world, from America to the U.K. to Germany must now compete with
the rapidly industrializing nations of China and India. Their almost
over-night increase in demand for oil has been the primary cause of the
rise in price of oil-gas-petrol. It is that most basic law of
economics: the law of supply and demand. And that law can't be
repealed or appealed!