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« Spinal Cords To Be Healed By Patients' Own Stem Cells? | Main | Okay... Idea »
December 01, 2005

The Truth About Oil Companies

...is that they're not making all that much money on a per-unit basis:

Over the last five years, the American Petroleum Institute points out, the oil and natural gas industry netted 5.7 cents on every dollar of sales, compared to 5.5 cents for all U.S. companies.

Can't cite it now, but I also read that the profit margin for the oil industry was 9%, compared to 8+% for all industries.

Let me see. Democrats want lower oil prices, but they don't want to allow additional drilling or refinement in the US, and they also want to reduce the incentives to produce more (and do so more cheaply). And in the latter, of course, they're joined by many grandstanding faux-populist Republicans.



posted by Ace at 11:01 AM
Comments



Exxonmobil in the 3rd quarter reported pre-tax profits of $9.92 billion on revenue of $100.72 billion.

9.9% is hardly an obscene profit. I only cite the results of one company, but they are the biggest and certainly representative of the industry.

Posted by: Dave in Texas on December 1, 2005 11:13 AM

Democrats don't give a shit about oil prices. They don't care about economics.

They care about profits, whatever the source. They want that money for themselves. They want that as much money as possible to flow into their pockets.

This goes for everyone, not just oil companies. It's just that oil companies (a) have deep pockets, and (b) sell a product that no one really enjoys buying so it makes them an easy target for demonizing.

They'd go after pro sports profits if they could, but the fan base would go nuts over it.

Posted by: Phinn on December 1, 2005 11:37 AM

Dave is totally correct. And as I have pointed out many times, with the oil business it is feast or famine. When you are making money it seems grand, but the famine has outweighed the feast in the last 20 yrs or so.

I just couldn't BELIEVE that congress bought in the CEO's of oil companies to ask about their profits!!!! That was insane! This is a profit making business after all you know.

The Democrats say we need to rely less on foreign oil, but want to restrict drilling because they don't know damn thing about the oil business.

Everytime you come in from freezing sleet and warm your tootsies in you home you can thank an oil company. Everytime you come in from 102 heat to a cool airconditioned house, you can thank a oil company. Everytime you drive to work you can thank a dang oil company!!!

I about sick to death of this "evil" thing the Democrats spread around about this industry. Let's shut it down for a month and see who howls.

Idiots.

Posted by: Rightwingsparkle on December 1, 2005 11:37 AM

Got some energy there, Sparkle.

Posted by: Michael on December 1, 2005 11:56 AM

Every time you drive to the club and the hairdressers, you use gasoline. Every time Yolita lights the chafing dishes, she's using petroleum products. When you step into your indoor heated pool, remember it's heated with natural gas. And without jet fuel, your Lear would plummet from the sky, making that run up to Aspen problematic.

All hail petroleum profits. Er... make that "products".

Posted by: spongeworthy on December 1, 2005 12:08 PM

Phinn, to your point, federal and state taxes on a gallon of gasoline average 40 cents.

Who's making a bigger profit on gasoline?

Posted by: Dave in Texas on December 1, 2005 12:11 PM
Over the last five years, the American Petroleum Institute points out, the oil and natural gas industry netted 5.7 cents on every dollar of sales, compared to 5.5 cents for all U.S. companies.
And how many cents per dollar of sales goes to the federal government and state governments? Who are the real profiteers? At least the oil companies provide a product for their 5.7 cents of profit. Let's have congressional hearings and get some testimony from these greedy, profiteering governments. here are the tax rates on gasoline. Here is my state of Washington gasoline taxes. Washington 23 23 41.4 (Read state/combined state (no excise is Wash) and total to include federal taxes. So who's gouging?
Posted by: tom scott on December 1, 2005 12:29 PM

Having real problems connecting to Ace and it dropped my link to the page for state sales & excise taxes and federal taxes. This is 2002 data.
LINK

Posted by: on December 1, 2005 12:39 PM

http://www.energy.ca.gov/gasoline/statistics/gas_taxes_by_state_2002.html
Jeez, Ace of Spades is screwed up today. Got server problems?

Posted by: tom scott on December 1, 2005 12:42 PM

Simple economics. Supply and demand. Increase supply (open up refining to new venture capitalists) and the price goes down. Get the fucking Government out of managing the petroleum economy and let it shake out where it will.

Posted by: rls on December 1, 2005 01:23 PM

I agree with the main point here, but be careful about arguing from profit ratios based on sales. Profits divided by invested capital are far more revealing. For example, a typical supermarket only makes a penny and a half on every dollar of sales -- but because it turns its inventory over so rapidly, it makes many times that amount on invested capital. A supermarket that makes 1.5 cents per dollar of sales but turns over its inventory 20 times per year -- a conservative figure -- is making 30 cents per dollar of invested capital.

Posted by: Francis W. Porretto on December 1, 2005 05:06 PM

"Gas Taxes Exceed Oil Companies' Profits"

http://taxprof.typepad.com/taxprof_blog/2005/10/gas_taxes_excee.html

Posted by: abnjm on December 1, 2005 05:55 PM
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Cataclysmic

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