I didn't have time to read this link but something I read popped into my head and I wanted to toss it out.
I read that the oil companies only actually make like 7.2% profit off their product vs 9 something that other manufacturers typically get.
I wonder if that is true?
If they are stealing from us, which I haven't seen anyone prove, then that is bad. If they are making money because they happen to be in a lucrative business, well, I can't complain. No one is going to work for free and I don't expect them too any more than I would.
I have heard the same argument Dust. My problem is that there are really no other options. I must purchase gas. I really have no choice but to do so. The sheer volume of petroleum products that are sold also factors into the equation. It's hard to compare a business sector who sells an "optional" product in limited quantities, to a business sector like oil, where U.S. customers have little choice but to purchase the 400 million gallons of gasoline we need every day.
If the price of steak goes higher, I can purchase pork or chicken. Occasionally, I see the price of streak on sale from 30%-50% off. When is the last time you saw a sale like that on gas ? I have no choice but to purchase gas. They have us over a barrel (pun intended).
The other issue is that there is really no competition. Go to any corner and you see gas at the exact same price (or within one penny) from opposing stations. They have no incentive to compete because the consumer doesn't have a choice but to purchase gas. They can all get richer by keeping the prices high and the same. Is that true capitalism?
Unlike every other business sector, oil companies are in a special position and they have a responsibility to compete fairly. If they are not competing fairly, and I don't believe they are, then they will have to be better regulated. _________________
"Linux is more than an OS, it's a state of mind."
I"ve read that margins are as low as only 3% on oil products but the shear volume of what they sale makes up. The only solution is to punish oil companies for making profit. That makes no sense. OR they could "nationalize" oil companies. Wonder why that's not being talked about. _________________ You can't hold a liberal responsible for their words because it's character assassination.
I don't support windfall taxes on oil companies, as Obama suggests but I do support more oversight, regulations and possible price controls. 50 billion dollars a year profit for one company IS a bit excessive if you ask me, especially when you consider they can charge whatever they want and we still HAVE to buy it. Simply comparing the oil companies to other business models is oversimplifying the issue. _________________
"Linux is more than an OS, it's a state of mind."
They can't charge what they want because their competition will undercut them to take their customers. Look at the size of the company and the revenues they took in. They have a product that people need. Price controls does nothing to fix the problem. We all know what the problem is, the price of oil is in fact controlled by opec. their dominance in the market has to be challenged.
The term "excessive profit" should an oxymoron in a free market as long as there are no monopoly. And oil companIES does not equal a MONOpoly. _________________ You can't hold a liberal responsible for their words because it's character assassination.
They can't charge what they want because their competition will undercut them to take their customers.
I don't understand what you mean here..
They keep their prices in line and high. It's called collusion at a distance. They don't need to compete. There's plenty of customers for all of them and plenty of profit to go around. They have intentionally kept refining capacity at the minimum so if a mouse sneezes in a refinery they can jack the price.
I agree with you about OPEC. It is a cartel but the oil companies are all on board with that, as it's in their best interest financially to maintain the status quo.
Considering they made the most profit in the history of the world this quarter, how about if, at the least, we eliminate all the tax payer subsidies the oil companies enjoy? They certainly don't need or deserve them at this point!!
How do I go about getting a subsidy?
Maybe I should check with Matthew Lesko about that. _________________
"Linux is more than an OS, it's a state of mind."
Last edited by Gadget Wizard on Thu Jul 31, 2008 3:19 pm; edited 1 time in total
you show me any hard evidence of collusion and I'll call DOJ and get them investigating.
Refining is at it's limit because idiots like polosi out there playing Capt Planet.
You do anything to their bottom line and they pass it on to the customer. That means of course the price at the pump goes up. They are a business, they have stock holders, to do anything to undercut their profits would be criminal to the shareholders.
The only thing the Nation could do about oil company profits is either buy stock in them or nationalize them. Again, why is no one speaking of that? _________________ You can't hold a liberal responsible for their words because it's character assassination.
With "collusion at a distance" there is no direct contact so it can't be prosecuted under the law. That doesn't mean it is not happening. It doesn't take a genius to figure out that it's not in their best interest to undercut each others prices, so they don't. They collude at a distance and keep their prices the same.
How convenient to blame Pelosi for that. You might not like it if an oil company decided to build a refinery in your back yard. I know I wouldn't like it. However, the oil companies could expand existing refineries and even build new ones in areas they already have access to. They just won't do it.
The reason not many are talking about nationalizing energy is that we know government is too inept to do much of anything. We will be trading in decisions being made for profit motives with decisions being made for political gains, neither of which is of optimum benefit to the American people.
Duke power is a monopoly. I have no choice but to purchase electricity from them. They can double my rates tomorrow and they would if they could get away with it. I'd still have to buy it. We have much more oversight, regulation and control over the electric companies and we know how they generate their power. At this point in history, I believe we need to have the same kind of oversight of oil companies, until we can ween off our addiction.
So, do you support the tax payer subsidies that are given to oil companies? _________________
"Linux is more than an OS, it's a state of mind."
Public Service commission regulates Duke Power as well as all other public service providers, power, water, gas even cable tv. No they can not raise your rates without going to the PSC and getting it approved. Do you really want that kind of control over the oil companies?
You know as well as I do that environmentalism has wreaked havoc on the energy sector. Sure there has to be a balance between growth and preservation. Build a refinery in my back yard, go for it, I know my gas prices will be cheaper because I'm closer to the source. Oil Companies are investing back into themselves but when we as a nation is denied the right to our own natural resources because this environmental nut thinks she's "saving the planet" it's time call a spade a spade.
I wouldn't support any new subsidies, I do not support removing any at this time because it will add to the cost we are paying.
I'd trust a decisions based on the bottom line far greater than one based on political motives.
Good discussion. I think the argument applying to nationalization would apply to the 'oversite' suggested. I think it would become political and thereby FUBAR'd.
I'm for trusting the market, myself. Looks like it is having and effect now. I also think that we need to become more energy independent. Pelosi and the Dems sure aren't helping with that.
