Cost / Taxes / Profits

Cost*

Production*
Refining*
Marketing
Transportation
Retailing

Taxes

Federal
State
Local

Profit**

Production**
Refining**
Marketing
Transportation
Retailing

.31***

*Note:

The cost of refining exceeds the cost of production.

**Note:

The profits of production are 9 1/2 X the profits of refining.

If you were Big Oil, would you prefer to invest a billion dollars in (1) a refinery, or (2) production?

Remember this the next time you hear "We need more refineries."

***Note:

The profits of refining, marketing, transportation, and retailing, totalled, are less than one-third the profits of production

It appears we need to take a close look at the people involved in production.

All of these expenses must be paid by the gasoline consumer: YOU!

Note: Profit, which in normal business is some small percentage of cost, in this case is actually significantly higher than cost.

Source: Gibson Consulting, Butte, Montana 59701 http://www.gravmag.com/oil.html

The price of gasoline will certainly be more than $2.65 - $2.85 when you read this message. Nonetheless you get the point: the oil companies who supply you with gasoline are pocketing well over one-third of the money you pay for gasoline (as opposed to 10% or 15% profit, which most us would think of as reasonable profit).

Moreover, the complete story is much worse than that: "production cost" ($0.33) in the table above is based on the supposition that Big Oil is paying the per barrel price that you hear quoted on Corporate radio (or see on Corporate teevee, or in your Corporate newspaper). What you will not see or hear from your corporate news sources is that Big Oil does not necessarily pay the per-barrel price you were told about.

Oil-producing countries such as Nigeria are governed by dictators who are thrilled by the prospect of putting a few hundred million dollars in their pockets by selling crude oil to Big Oil at much less than corporate-media-advertised per-barrel prices, giving Big Oil even greater profits.

"Greater profits" because Big Oil does not pass their savings along to the consumer (these negotiations are secret; try to find out what Big Oil actually pays). Instead, they relish the opportunity to gouge the consumer even deeper.

DO NOT BUY FROM BIG OIL!

There are those who claim Big Oil companies conspire to obtain unreasonable, unfair, massive profits to the detriment of all consumers.

(1.) Is this true? and,

(2.) If so, from where in the system are the massive profits obtained?

Retailer: Of the five business sectors involved in bringing gasoline to the consumer, there are 167 thousand retail gasoline stations in the USA alone. A secret conspiracy involving such a huge number of people is impossible.

Transportation: The distribution network is vast and complex. A secret conspiracy involving its tens of thousands of members is impossible.

Marketing: Marketing (to include advertising) is controlled by oil companies, and tends to be in-house.

Refining: There are 149 refineries in the USA alone; there are far too many people involved here to make a secret conspiracy possible.

Which leaves production*

There are only 9 companies in Big Oil: ExxonMobil, BP, Royal Dutch/Shell, Chevron Texaco, Conoco Phillips, Marathon, Amerada Hess, Occidental, and Murphy.

Each of these companies has a Chief Executive Officer. Nine CEOs would fit comfortable around one small poker table. Is a conspiracy possible? YES.

Is this happening?: It is probably absolutely impossible to either prove or disprove.