Who knew? Big Oil is non-profit
You may have seen an ad or two by "The People of America's Oil and Natural Gas Industry" lately. With price reaching $120 a barrel and $4 a gallon, the monopoly fuel for transportation in the U.S. apparently feels the need to do a little explaining. A spokesmodel on TV tells us there's enough oil here to fuel 60 million cars for 60 years (if only we let the oil companies go get it.) A voice on radio suggests we stop knocking oil companies because they are us; we all own a piece (through our pension funds). We really ought to stop beating up on ourselves.
Last night, Stephen Colbert took a closer look at a newspaper ad on "The Price at the Pump." He discovered "oil is a zero profit business." Check out the video clip after the break.
Reader Comments (Page 1 of 1)
Randy 3:03PM (5/09/2008)
make me laugh
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Tim 5:51PM (5/09/2008)
Yes, 15% of the retail cost of gas goes to oil company refining & distribution, but only 1/3rd of that is their cost and the rest (about 10% of the net cost at the pump) is PURE PROFIT.
Oil companies make 10% no matter what the final retail price. When gas was $1.00/gal, they made 10 cents per gallon. They are making 40 cents per gallon because gas is now $4.00/gal. The higher the prices go, the more money they make because that 10% is a CONSTANT!! Now you know that they are making record profits because the price increase at the pump and NOT because of volume sold or increased margin.
You can thank the Neo-cons and Democratic-Socialists liberals for driving up gas prices and oil company profits while giving YOUR tax dollars directly to the oil companies. Of course, if you back the status-quo of Obama, Clinton II or McCain for president it YOUR fault because ignorance is no excuse.
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MikeW 8:33PM (5/09/2008)
I choose none of the above.
Why no mention of the collapse of the $ USD, that would the biggest gottcha of the cost of gas.
or the fact that they insanely low speed limits remove people from reality. I "NEED" 300hp just to get by.
Ron Paul for Reasonable & Prudent speed limits (and nation wide conceal carry-by forcing states to honor other states conceal carry)
Just say no to invading/bombing Iran.
I am not ready for the Great Great Depression.
{I don't have my homebrew diesel shed in operation yet)
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Dad 10:52PM (5/09/2008)
"enough oil here to fuel 60 million cars for 60 years "
Hmm, 300 million cars in the U.S.A.. So not so many years?
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Joe 10:26AM (5/10/2008)
From Item Number 2...
If price of the oil that is bought from OPEC is 4 times higher then the profit is still $ 0.10. Because the $1.00 gas was bought with $20 per barrel. Now it's $120+. The profit margin is the same. Maybe you should take a different course in Economics.
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mike 1:10PM (5/10/2008)
Joe, that's a big IF you got there. What IF the oil companies don't buy their oil on the "SPOT MARKET" and are NOT paying spot market prices for their oil. What if they buy DIRECT from Saudi Arabia? Then, they'd be making Quite a bit More...
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montoym 11:06PM (5/13/2008)
Well mike, being that Canada is our largest supplier of oil, I don't know why we wouldn't make a deal like that with them rather than the Saudis.
But, realistically, the true answer is that the oil we are buying from Canada(and Saudi Arabia) costs the same since it's a commodity and is market driven.
What sense would it make for Canada(or Saudi Arabia) to sell us oil for less than market value when they could sell it to anyone else for a higher price?
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