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Seat Sniffer

This is official:

in October to December of 2007 the top 6 oil companies made over $1.5 trillion in revenue, and a record profit of $150 billion. Proof of price gouging.

Boycott of 1 Brand per month:

June 2008 - Exxon/Mobil
July 2008 - Shell
August 2008 - Arco/BP
September 2008 - Chevron/Texaco
October 2008 - Conoco/76



can we make this a sticky?

granny ring

"Proof of price gouging."

The only thing it is proof of is our insatiable appetite for gasoline.
Going by your numbers that is a 10% profit margin. Most businesses would go under if they had to run on 10%. Some bike shops operate on 30-50%

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0gravity

I'm burned by the cost as much as the next guy, but how is this necessarily "proof of price gouging"??

As much as I want to believe it, this situation is a lot more nuanced than just oil companies are screwing us. One of the biggest reasons the cost has skyrocketed is that oil is bought and sold on global markets in dollars and our currency has fallen precipitously (which itself is a complicated mess) so that price gets jacked up. We need to rescue our dollar.

PS: also, the vast majority of the world's oil supply isn't owned and sold by oil companies, it's owned and sold by countries. Think bejeweled Mercedes.

~ Pakiha ~

Finally someone is getting the Idea

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G-Ride

I say we do the opposite and use as much gasoline as we can to deplete the oil reserves as quickly as possible. Then we can move on to other, better fuels, and eliminate our dependency on other countries.

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Carpe omnis - seize it all

Seat Sniffer

highest prices ever AND record profits?

That doesn't make sense to me if they're claiming limited supply and increased demand.

Why has gas gone up more percentage wise in the past 2-3 years than it has in the past 10?

You're saying its because our currency sucks, but then that means the euro is worth 1/2 of a US dollar because they're paying $8.00/gallon?

thephat

It depends on if you are taling about bottom line profit, or margin.

For retail of any kind 10% bottom line profit is considered really healthy. I would be loaded if I could take home even 5% of what we bring in at The Path. If you are talking abouy margin on goods sold, then your numbers are in line.

Marshall Willanholly

I'm as bummed as anyone about the rate at which gas prices have risen in the past few years, but boycotting a different brand each month isn't going to do much of anything:

http://www.snopes.com/politics/gasoline/gasout.asp

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Kid A

not sure your LBS is making that kind of scratch. there may be that kind of markup on product before overhead etc but that would be printing money. not to many co's have 50% returns

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"I AM NOT LOUD! I'm exuberant."

allison

If you really believe in it, stop driving! Many people do this already.

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My Blog
The Path
Crank Brothers

Kid A

not sure that is proof of gouging but imo they are certainly taking full advantage of situation. there are clearly other factors also related such as OPEC, what's going on in Venezula, the consumption on energy in china, etc. Prices are certainly off the hook and may keep rising but there are alot of parties here such as auto manufactuer that can help solve the problem by turning our better fuel efficient cars, etc

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"I AM NOT LOUD! I'm exuberant."

Seat Sniffer

Unrealistic. They have us by the balls and they know it. I hear we still enjoy the lowest prices in the world, but hasn't that always been the case?.

uzziboy

let me ask you something are you a business major? do you have a degree in business? Because you are flat out wrong!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I am tired of people defending the oil companies for some odd reason. you are in fact my friend getting fu*ked hard by them.

read this:

Fortune Magazine) -- The notion of the little guy striking it rich - finding gold at Sutter's Mill, discovering oil at Spindletop, or cashing in on a dot-com IPO in Silicon Valley - runs deep in American lore. But something even more historic transpired in 2006: A massive swath of the established economy - also known as the Fortune 500 - collectively generated unprecedented earnings.
The grand total: $785 billion, a 29% increase over 2005. Those returns obliterated the previous cyclical peak, $444 billion, achieved in 2000 at the height of the tech explosion. Put simply, American companies are enjoying the most sumptuously profitable period in the 500's 53-year history. Last year post-tax profit margins hit 7.9%. That's 27% higher than the 6.2% posted in 2000, then lauded as exceptional.

Exxon and Chevron aren't the only two oil giants to report impressive earnings recently. Conoco (COP, Fortune 500), the nation's third-largest oil company, trounced profit estimates by nearly 25% when it reported last week. And Royal Dutch Shell PLC, Europe's largest oil company, reported a 60% increase in profits Thursday.

The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others...but not by an inordinate amount.

So when you choose to talk about something you do not know, do some reasearch before you say it

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Why ask why, does it really matter????????

Uzzigirl on riding at Peters, "I'm allergic to stinkyness"

G-Ride

When public companies report "profits" they are talking about net income (earnings), not gross margin. This is also usually an EBITDA number, so there are further expenses beyond the net income number. And yes, a 10% net income is considered healthy at any level, retail, wholesale, or otherwise. The 30-50% bike shop number is gross profit margin.

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Carpe omnis - seize it all

FFW

Hmmm...
Average of 8% profit for integrated oil companies. Before dividends! Mfg industry avg is 9.2% (excluding auto industry at -26% profit, yes that's negative).

http://assets.opencrs.com/rpts/RL34437_20080404.pdf

The company I cureently work for would divest my site if we went lower than 10% for very long!

1) Conservation in the short run - bike or mass transit to
work - just drive less

2) Alternative energy in the mid to long run
-nuclear is probably cleanest, safest midterm fix
-harness the hot air spewing from our nations capital for
a limitless renewable but not necessarily clean longterm solution - dairy farm flatulance collection to supplement as needed

Seat Sniffer

That makes sense but I think they forgot to add this reason:


I understand that gas is a fungible commodity, and that demand will be shifted from one brand to another, but if we disperse purchase frequency away from the larger companies and keep it towards the smaller ones, shouldn't a shift occur? Then viceversa?

RustyIron

We have substantial untapped petroleum reserves, but we are prohibited from exploiting these resources. Why? Because of the government regulations.

There is little incentive to build new refineries because of the legal hurdles imposed by whom? The government.

Every year you see gas stations shut down to intall new upgrades that are mandated by who? The government.

Over fifty cents per gallon sold at the gas station goes where? To the government.

And how can the government get away with driving up retail prices the way they do? Because the voters encourage them to do so. Think about THAT next time you click the button in the voting booth. More tax, less tax--you decide.

Especially in groups such as ours, we are continually faced with jerk-knee contradictions. One day everyone is an environmentalist, the next everyone wants to burn free gasoline. It wasn't more than a year or two ago that the ecofreaks were suggesting the government impose MORE confiscatory taxes on gasoline in order to drive down consumption. Now that we have higher prices, one would think they would be dancing in the streets. Some people you just can't please.

Marshall Willanholly

Some interesting reading on the power of the consumer to lower gas prices:

http://reachupward.blogspot.com/2006...dont-work.html

http://www.env-econ.net/2006/04/can_consumers_f_1.html

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0gravity

Yes, our problem is that we don't drill enough oil in the US anymore, that gas stations have to comply with pesky environmental regulations, that a tax rate lower than everywhere else in the world still has to be levied on gas.....

Yeah, I'll think next time I hit the button in the voting booth. I'll think that Republicans are a dying breed.

uzziboy