Crooked Energy Companies

[Jidoe]

I hate the energy corporations. I really do.

The price of oil barrel has gone down from almost 150$ to 92$ (a difference of about 40%), but the prices of gas haven't changed at all.

The big energy corporations are laughing at us all, and it is really disturbing no one is doing anything about it.

[Rosuav]

Originally posted by Jidoe
I hate the energy corporations. I really do.

The price of oil barrel has gone down from almost 150$ to 92$ (a difference of about 40%), but the prices of gas haven't changed at all.

The big energy corporations are laughing at us all, and it is really disturbing no one is doing anything about it.

How recently did the barrel price drop? There'll be a fair amount of lag between that and the bowser price.

[Jidoe]

Originally posted by Rosuav
How recently did the barrel price drop? There'll be a fair amount of lag between that and the bowser price.

I realize that. It usually happens because they purchase a certain amount of gas and until they get another delivery of gas, they stick with the old price. HOWEVER, the price has been going down for the last couple of months I think, and what bothers me more is that when the barrel prices inflated, the gas companies upped the price on a weekly, and sometime daily, instances.

[Aristotle]

Originally posted by Rosuav
How recently did the barrel price drop? There'll be a fair amount of lag between that and the bowser price.

Funny thing though... when the price per barrel goes up, the gas at the station goes up immediately. When asked, they say it is because current prices are based on the expected cost of replacement of the gas they have now.

But the same is not true when the price of oil drops. Funny, eh?

[Cais]

It really is a funny thing. But not entirely surprising, they're profit driven. Not that being driven by profit is a fault. But if you were to ask a stakeholder or a CEO of an oil corp (and if you could expect an honest answer) if, after seeing their bottomline swell so drastically, they'd want to return to collecting the comparatively meager revenue of just four or five years ago, I'm sure it would be an emphatic no.

Oil and energy is a pretty interesting comodity, while I'm no expert on the economy, I do know there's only so much consumption of oil we can cut. For example, if I stop buying gasoline, given that I can't afford an alternative and that there is no public transport in my area, I will fail out of school and be unable to work. Basically, they have me by the balls, and there's little I can do but grin and bear it. I'm sure it's a similar story for the vast majority of people.

This is definitely a pet peeve of mine.

Jidoe: The big energy corporations are laughing at us all, and it is really disturbing no one is doing anything about it.

There is some good news about this, supposedly. I haven't looked into it personally yet, but apparently some states are looking into price gouging. I think it's pretty obvious that the oil corps aren't following their own rules of speculation and sucking in yet even more profit as a result. I guess we'll have to see what comes of it.

[Aristotle]

Originally posted by Cais
It really is a funny thing. But not entirely surprising, they're profit driven. Not that being driven by profit is a fault. But if you were to ask a stakeholder or a CEO of an oil corp (and if you could expect an honest answer) if, after seeing their bottomline swell so drastically, they'd want to return to collecting the comparatively meager revenue of just four or five years ago, I'm sure it would be an emphatic no.

They have never collected a meager revenue.

The problem is that there is little or no competition and the barrier to entry in the oil/gas market is gigantic.

For years antitrust regulators have looked the other way when gas stations routinely fixed prices. And then George Bush's Justice Department stupidly approved the merger of Exxon and Mobil, two of the biggest oil companies. These companies were split apart ON PURPOSE and for GOOD REASON in the famous Standard Oil breakup of 1911. That is pretty much the beginning of antitrust law - an area of law crucial to the success of our economy.

In 1911, the Supreme Court broke Standard Oil into 34 companies. The two biggest were Standard Oil Company of New York (which became Mobil) and Standard Oil Company of New Jersey (which became Exxon). Gasoline was not even as important to the economy back then as it is now (it did not surpass kerosene in sales until 1911) and yet the government then was wise enough to see how anti-competitive and dangerous it was to let so few control a resource that was so important.

But in 1999 they were allowed to merge in the largest merger in US corporate history. They are back together again and they are fixing and jacking up prices just like the bad old days. ExxonMobil is the world's largest company by revenue, at $404.5 billion for the fiscal year of 2007.

[Aristotle]

(Split from the Real Pet Peeves thread and moved here.)

[Cais]

Ah, glad you added that last thing. I was totally confused.

I actually said 'comparatively meager'. That is to say, while it may not have litterally been meager, they're definitely making hand over fist more than they were then.

And yes, oil refining is similar to the auto industry, it takes huge sums of capital to start up and break into the industry, and there's no gaurentee you'll succeed. The same is true with alternatives, alot of which are still hung up in research, which is also extremely expensive. The sad reality. Also sadly, it seems trust busting has gone the way of the dodo.

[Aristotle]

Originally posted by Cais

I actually said 'comparatively meager'.

Look, if you are going to wriggle out of your own statements in every discussion then I'll just put you on ignore and not bother. There was nothing meager, or comparatively meager, about their profits before the recent gouging. Yes, they are making a lot more now than "four or five years ago", but they were still making truckloads of money then as well.

If you are this desperate to insist you never say something wrong, just let me know now so I can avoid discussions with you in the future. I have absolutely no desire to argue semantics with someone who has to insist every single thing they said was perfect.

Gross Income of Exxon Mobil:

FY2003:  74.22 billion
FY2004:  90.68 billion  	
FY2005: 104.96 billion
FY2006: 110.42 billion
FY2007: 113.50 Billion

FY2003 is 34% lower than FY2007. That doesn't make FY2003 "comparatively meager" by any means, especially when we are talking about the company that makes more profit than any other company in the world.

[Cais]

Okay, you're right Aristotle. I guess compartively meager was the wrong wording. I should have said.... Would they prefer to go back to their still enormous revenues from there still even more enormous revenue. I was just trying to emphasise the current rise in profits, and expenses for the consumer.