Stop that profit!

Unless you live under a rock, you too have seen the massive spike in the price of a gallon of gas. Nationally the average is now $4 a gallon, with many of the liberal bastions having even higher prices. And then you hear news like this:

NEW YORK (AP) — Gasoline futures tumbled almost 8 percent Wednesday after a government report added more evidence that Americans are driving less because of higher pump prices. The Energy Information Administration said that U.S. gasoline demand dropped 2.4 percent last week, the largest drop in seven consecutive weeks of demand declines. Analysts said motorists have been forced to conserve gasoline with pump prices close to a national average of $4 per gallon.

“That $4 number is not just having a psychological impact, but a direct impact on drivers,” energy consultant Jim Ritterbusch said. “Normally, with the economy recovering, you’d expect gasoline demand to go up, but that’s not happening.” Analysts said they’re now predicting a flat driving season this summer. At best, motorists will use about as much gasoline this year as they did in 2010.

“My opinion is that they started cutting back when prices hit $3.50″ per gallon, oil analyst Andrew Lipow said. “We haven’t seen the full effect of that just yet.” Decline in demand at the pump has helped offset a variety of operating problems that idled numerous refineries around the country over the past few months.

So Americans are feeling the pinch and driving less, and the price of crude is plummeting. The price at the pump is not going to come down as fast, though. Contrary to the conspiracy theorists though, that’s because the gas dealers charge what they need to buy the next refill, and that’s not going to happen until the gas & other products currently refined at higher costs makes its way through the system and the cheaper oil makes its way in.

Of course, you read the comments, and the moonbats are out in full force blaming the evil oil companies and their profits! I already wrote about putting oil company profits into perspective. It’s ridiculous how these moonbats are angry as hell at the 2 or 3 cents per gallon profit the oil companies make, while ignoring the fact government – federal and state – is gouging people by orders of magnitude more with their gas taxes. They all want more taxes on these evil corporations!

Guess what idiots. Higher taxes will certainly hurt the oil industries total profits, but in the end, especially when you are feeling the pinch at these higher prices, it will hurt you far more. There are several reasons that the current government bosses aren’t talking about anything but more taxes too, but one of the big ones is that they rake in far more income when prices are higher, even when sales drop, because the federal tax rate is tied to price at the pump. Allowing these hacks to jack that income, totally at our expense since the cost will come from our pockets, not the oil companies, and then because you are a spiteful stupid moron that thinks tax hikes or confiscatory taxes stick it to big oil, is not just stupid, but insane.

Want cheap gas? Make supply abundant enough that nobody – well, nobody but a big and intrusive government, hell bent on controlling you, and on a crusade to redistribute wealth, I should say – can artificially jack up the price due to consumer choice, and you will get it. Econ 101. Drill for your own oil, and compliment it with other viable technologies. Sadly the envy cult, they also pretend to be about social justice, would prefer to cut off their nose to spite their face, than to let those they don’t like make profits. All of them know profits are just the rich stealing from the poor anyway….

Comments are closed.

  1. Seattle Outcast

    And the taxes on each gallon is around a $1.00 – the government is doing better in the gas business than the people actually in the gas business.

    Thumb up 0

  2. balthazar

    The profit margins of the oil companies are about 6-8% annually. You can do a little research on any of the stock market sited to get that information. That is WITH subsidies.

    Lib love fest companies like Google and Apple make 28% or so profit margins. Hummmmmm. Lets start taxing how many ipods, pads, and phones people buy, that will fix it!!!

    Thumb up 0

  3. AlexInCT *

    Your question is erroneously premissed, CM. Exxon doesn’t pay taxes: the people that buy Exxon products do. Corporations don’t pay taxes. Ever! Consumers buying their products end up paying for those through the price of what they buy.

    And I smell a rat here. Exxon paid nothing to the US government in 2009 according to the left. But that’s because of the US government’s hostile tax policy incentivized Exxon to keep its money elsewhere, where the burden was less on its stockholders. How much did GE pay this year? BP? The fact is that everybody will look for the least tax burden possible. Well everybody but democrats, especially the politicians. They all just seem to simply not pay their taxes then feign ignorance when caught.

    Thumb up 0

  4. AlexInCT *

    Well, according to the shareholders report Exxon made 2 cents per gallon. And as others have pointed out and asked: how much profit did the government make?

    Personally I am far more incensed by the 28.5 cents of state and the close to 20 cents of federal taxes I paid per gallon, than I am about Exxon making anything less than that. If I use your 7 cent comment as a barometer, and they cut their profits in half, I would still only save about 3.5 cents a gallon. If the government cut their taxes by a measly 10%, I would save more. Whose costing me more? Exxon whose then giving me that money as income on the shares I own, or government, who took that money and returns me near zero for it?

    And before you go there, yes I drive on public roads, but I would like to point out that they are in horrible condition precisely because government is horribly inefficient when they do deign to use the money to do upkeep, and more likely than not the money is spent elsewhere – in the case of the state portion here in CT, practically all of it – to prop up the welfare state that doesn’t even give me the decency of a reach around as it rapes me.

    Thumb up 0

  5. richtaylor365

    I know it is popular with some to pile on the oil companies but as Balthazar pointed out above, from a pure profit motive, many other areas of business are much more lucrative. Being a stock holder of both Chevron (stock price about where it was in 2008) and Exxon (stock price way below the 2008 levels) as well as a few drilling companies, easier money is made in other industries. We don’t hear about the hundreds of wells that come up dry, the political machinations that delay and make drilling prohibitive in some areas of the world, and the actual costs they accrue in the pursuit of car juice.

    Having said this, all subsidies given to oil companies by the feds should be eliminated immediately. This is pretty much my attitude with all subsidies to any industries, if you can’t make it in the open market, then let the free markets work and kill you off, the government should not be in the business of propping up failed business models.

    Thumb up 0

  6. AlexInCT *

    We don’t hear about the hundreds of wells that come up dry, the political machinations that delay and make drilling prohibitive in some areas of the world, and the actual costs they accrue in the pursuit of car juice.

    We also don’t hear about all the well paying jobs, for people that then pay hefty taxes, that this industry is also repsonible for. Instead we get bombarded by fairy tales about green industry jobs that never materialize without government subsidies that in proportion make what the oil industries gets look like chump change.

    Thumb up 0