Question, If gas prices are rising, why is Exxon earning record profits?
359387
They keep their steady 10% profit margins that they've been doing for the last 20 years.\n\nSo, if the supplier say 10, you charge 11.  You make 1.\n\nIf the supplier charges 100, you charge 110.  You make 10.  Not that hard.\n\nSkim over their annual reports for the last years that you care about.  Look at the sales, COGS, gross margins, net margins to get an idea of how the fluctuations have been and compare that to the closest future price of crude oil.
463011
No, profits are the American way. I doubt you were even born when the oil companies were struggling back in the mid-seventies and early eighties. Aquisitions and mergers have made them some of the strongest American companies.\nThere are now more known oil reserves world wide than ever before. There is also more demand than ever before. Hence oil is over $72 per barrel. We could get all we need from the Canadian oil sand deposits and it would be cheap. But it is being shipped around the world.\nFigure that
478998
Let's see.\n\nIf you actually do any form of primitive Google search, the chairman got a golden parachute of 400M, not 1B.  Even if it was 1B, it wouldn't really matter that much.\n\nLast year, Exxon had 330B in revenues, so if you add back in 400M, that's around .1%.\n\nAssume you bought gas around 3$ per gallon.  .1% of that is 3/10 of a cent.  Depending on your usage, I'd say the typical person uses around 600 gallons a year.  So, you gave him $1.80.  Off 1B, it would have been closer to $5 last year.  The actual number is probably slightly higher because things that needed transport would have been passed on, but you get the general idea.\n\nPeople get hung up on someone's pay but never get around to figuring out how much it actually affects them.  Do you still worry about how much Bill Gates makes or the CEO of Google (who's made billions in the last couple years also), etc.?
502628
Not that I am for this--But dear it wouldn't matter and why you ask---well here is an article--this is starting to open up a new can of worms--please understand--Anyone in the world could have all the oil in the world..and it really wouldn't matter at this point...\n\n$3-a-gallon gas: Blame Washington, not Big Oil\nWhat's driving up gas prices? It's not just higher crude costs; it's new regulations.\nNelson D. Schwartz\nMay 3, 2006: 2:20 PM EDT\n\n\n(FORTUNE Magazine) - With gas prices roaring past $3 a gallon and consumer fury rising even faster, Congress and the White House are engaged in a Kabuki-like ritual: pointing fingers at each other over who's to blame, while furiously attacking Big Oil for reaping gargantuan profits - as drivers get hosed at the pump.\n\nIf the politicians really want to figure out who's responsible for the latest round of price increases, though, they'd be better off looking in the mirror. That's because the rise isn't only due to higher crude costs. It's also fallout from some little-noticed provisions in the energy bill passed by Congress and signed into law by President Bush last summer.\n\nBuried in the 551-page energy bill - which was supposed to ease energy shortages, not worsen them - were new regulations governing what additives go into gasoline and how it's refined. Corn-based ethanol is replacing the petroleum-derived additive MTBE, but Congress timed this logistically tricky switchover to occur just as demand for gasoline peaked ahead of the summer driving season - right about now.\n\nThe end result is an extra strain on the refining and distribution system when it can least afford it.\n\n"It's too late now, but Congress has consistently failed to sequence regulatory requirements in a responsible fashion," says Bob Slaughter, president of the National Petrochemical & Refiners Association.\n\nAdds Larry Goldstein of the Petroleum Industry Research Foundation: "The gasoline crisis is made in the U.S.A., not in Iran or Venezuela or Nigeria. At least half the increase in gasoline prices is due to unintended consequences of the energy bill, but no one in Washington wants to admit that."\n\nIndeed, while crude prices have risen 21% since the end of 2005, gasoline is up 37% - a sign of just how stretched the system is. Congress's mistake, says Goldstein, was setting the new law to go into effect 270 days after it was signed - May 5 - rather than waiting until fall, when gas demand is typically on the downswing.\n\nNow the big question is, How high can gas go? Well, perhaps the only good thing that can be said about paying three bucks per gallon is that it seems to be slowing consumption - which should, in turn, reduce prices. Over a four-week period in April, says oil analyst Jamal Qureshi of consulting firm PFC Energy, U.S. gasoline demand dropped by half a percent, to just over nine million barrels a day. That may not sound like much, but it's a reversal from the 1.7% average annual increase in gas consumption the U.S. has experienced over the past decade. If $3 is indeed the tipping point at which consumers change their behavior and alter their driving habits, it's the one silver lining in an otherwise very dark cloud for drivers.\n\nThe wildcard in this scenario, of course, is the increasing risk of a military confrontation with Iran. If that happens, says Qureshi, "all bets are off." Given that crude oil accounts for 55% of the cost of each gallon of gas (refining accounts for 22%, taxes for 19%, and distribution and marketing for 4%), an upward spike in crude oil would push gas up even if the bottlenecks caused by the energy bill ease this summer.\n\nThat's why Red Cavaney, president of the American Petroleum Institute, says the answer in the short term is conservation. Washington is indeed being turned upside down when it's left to Cavaney, Big Oil's chief lobbyist, to talk conservat
256226
This is just my opinion but for example, the big oil companies have gained record breaking profits in the first quarter of this year.  As an effect, oil prices have gone up dramatically.....)(
641301
The gas companies are actually only making around 10% profit on their gas.  This might be slightly above market equilibrium but not much.  Much of the cost goes into taxes and refining.  The bulk is from the increase in the price of crude oil.  The nominal profits are increasing because the oil companies are keeping a fixed profit margin.\n\n10% of 10 is smaller than 10% of 100.  Both have the same margins.\n\nThere's an article here: http://www.npr.org/templates/story/story.php?storyId=5365439\n\nPrice ceiling general info here: http://en.wikipedia.org/wiki/Price_ceiling\n\nYes, it would create a shortage.  We did exactly this in the 70s.  I guess it's up to the individual as to whether it's preferable to have gas lines and slightly cheaper prices or the current situation.  There's no right answer.\n\nIf the ceiling is low, they'll just cut supply or start exporting it.
833759
I can answer him. I blame Bush partly for the high gas prices because for the most part he is giving his friends in the oil industry big tax breaks every year. As a republican his belief is if you give more tax breaks to the rich more jobs will be created and prices of things will be kept down. But has it? No. I don't think he cares that the gas prices are high. It just means more money for his friends. Exxon makes 79000 dollars a minute. That is outrageous. Though it is not exactly Bush's job to fix the outlandish prices and profits, it would be nice if it really was a concern. What has Bush done to help this crisis?
368718
Some of the prices are artificially inflated. \n\nHowever, gas prices in the US are still lower than in most countries. Go to Germany or England and pay the equivilant we pay per gallon for a liter. \n\nI do think that many of the companies are taking advantage of teh recoupment of defense oil reserves and the war against terror in order to boost their profits.\n\nOn a final note, though, the war in Iraq was not about oil. If it were, we would be getting oil from Iraq. We are not, yet at least. Much of what excess Iraq is producing is going towards paying their reparations to many countries.
517644
I don't want to create a conspiracy theory here - that the gas companies haven't built refineries, so that the supply has remained steady whereas demand skyrocketed, driving up the price...as the companies have seen quarterly profits that are unheard of.  I won't try and say that this was a carefully constructed plot on their behalf, ahem.  Well, ok, I don't think it is but I do think that they've been cheap and that their current plans to expand existing refineries won't solve our problems.\n\nDemand for energy will continue to grow (disproportionately here in the U.S...) and I really believe STRONGLY in seeking alternative sources of energy so that we can not only reduce costs for Americans (costs for living...crude oil costs affect EVERYTHING...prodution, shipping...driving up prices...costs to commute, etc.) but will reduce our dependence on foreign oil - doesn't get much better than THAT!!
399975
Mtn Biker, you conveniently left out that Exxon had sales of 330B last year.  Figure 90M into that and it would have almost zero affect (maybe 1/10th of a cent) on gas prices.\n\nI don't really care if you want to put the blame on Bush.  It's the fad these days anyway.  Others have pointed out the supply/demand nature of crude oil, which sets gas prices.  You might argue he could indirectly affect gas prices, but he doesn't affect them directly.  It can be argued both ways, so read up and make your own opinion.\n\nI'd like to point out that an Exxon boycott would do just about nothing because Exxon would end up selling their gas to the other suppliers that weren't being boycotted.  A selective boycott shifts the demand, not decreases it, which is what is needed to lower prices.\n\nThe mythbuster on that urban legend is here: http://www.snopes.com/politics/gasoline/gasout.asp
219101
Consider that in 1999 I was paying .99 a gallon and in 2006 I'm paying $2.60, I'd say that it's high.  In just 7 years, that's a huge increase.  That's a .37 per year per gallon increase.  Considering that all the years before that, it was probably less than a .05 per year per gallon increase.\n\nOf course, some theorize that we're at peak oil and decreasing output.  If this is true (and only time will tell), then gas prices will go nowhere but up from here.\n\nAnd, of course, if you listen to the people who claim the wages have gone up to accomodate, let's examine this statement.  In 1999, if I was making $60-80k yr, then in 2006, I'd have to be making around $200k (or more) to keep up with that level of inflation.  And, I can guarantee you that people who were making $60-80k in 1999 would be lucky to have gotten a 5-10% total increase in salary during that period of time... which would make the salary between $63-88k today.  \n\nThere is also no way that a person who was making $60-80k salary in 1999 would jump to $200k+ in the same position.  In fact, the job positions that tend make $200k or above are generally C-Level executive positions, some Wall Street bankers, some Real Estate investors and some celebrities.  You'll certainly never get that salary level as a teacher.\n\nThe $63-88k level of salary simply doesn't keep up with the level of inflation on gas prices at all.
507433
Oil prices are set by the market.  In other words, if people are willing to spend $72.00 a barrel, then why would oil companies charge less.  The market corrects itself.  If the prices are too high, people will purchase less oil.  If the prices are too low, the miniscule profit margin that the oil companies already face will diminish.  That is why we pay what we pay.  It is what it is WORTH to buyers.  Simple as that.  If you want lower gas prices, take the bus for a while and wait until the market decides that oil is not worth as much anymore.
390170
They raise prices by restricting supply. They try to maximize their income without driving their customers to alternate fuels or into a depression. Either would reduce their income.
42936
Those are pieces of the economic picture within the US.  Based on the information that's been coming out of the oil industry, a high oil price is mostly priced into the earnings equations for most companies.  [I actually think that this is NOT the case, but that seems to be the assumption on Wall St.]\n\nThe auto makers are actually making announcements that are going to improve their profitability -- that generally makes their price go up.
68886
First, you have the price of a barrel of oil. It is set basically by OPEC and the futures market. The oil companies buy oil and this rate and send it to the refineries. Refineries then convert the oil in gasoline (among quite a lot else). Refineries in turn sell the gas to wholesalers. The wholesalers then sell to your local gas station.\n\nMany times you will see stations within a mile of each other with wildly different prices. The reason for this is quite simple: busier stations sell more gas, and therefore buy more gas than a slower station. When prices are going up, for example, the station that sold the gas faster will have to buy the more expensive gas while the slower station still has the less expensive stuff in the ground. Then people rush to the lower-priced station and the whole process repeats.\n\nGas stations make, on average, about 5-10 cents per gallon depending on the market. In short, they make more off the car wash or can of Coke than the 50 gallons of gas you just bought.
478979
Lets see, the oil company's own the wells, then they sell to the refinery's which they own. So they are selling it to themselves. they make a profit no matter what it sells for but make a bigger profit if it sells high. My guess is that the prices will go higher. While I wouldn't put it past Bush to invade a country for its oil. I don't think even he can spin this one to invade Venezuela. I think Iran will be a better choice because not many country's like them.
927848
Gas futures rose as a result of the Democrats taking office, knowing full well that they do not comprehend the importance of this resource!\n\nThanks so much for asking! I'm glad I could clear that up for you!