WE ARE ALL GETTING SCREWED

Did we deregulate electricity?

I'm not good at this topic, as evidenced by my Econ grades in college. So, sorry if this is a dumb question. How about if everyone in America stopped buying gas from Mobil for a week? Would this force them to drop their prices, at least in the short-term?

not an economist wrote:

I'm not good at this topic, as evidenced by my Econ grades in college. So, sorry if this is a dumb question. How about if everyone in America stopped buying gas from Mobil for a week? Would this force them to drop their prices, at least in the short-term?

Nope. If they just simply did not buy gas or oil for a week, they would have to stock up the day before or refuel the day after. This doesn't change demand. Or, they could just buy from a competitor which wouldn't change aggregate demand.

Now, if they didn't buy for a week and greatly reduced their use of oil (biking to work instead of driving), then that would affect demand and drop prices.

Most people complaining about these evil oil companies probably own them in some way or another through stocks, bonds, or retirement funds. I bet they don't complain when their dividend checks come in.

not an economist wrote:

I'm not good at this topic, as evidenced by my Econ grades in college. So, sorry if this is a dumb question. How about if everyone in America stopped buying gas from Mobil for a week? Would this force them to drop their prices, at least in the short-term?

No, they just cut their production and keep the prices up. The price at the pump is based on a formula that includes what the station just paid for the gas and how much it would cost to replace it.

We gripe about the price of gas, but the station is only making a few cents per gallon. Out of that few cents, they have to pay their people, utitilies, and rent. The stations really make their money when you walk into the store and buy a coke or candy bar.

The reason that companies like ExxonMobil make so much money is because they are part of the process all the way from drilling for it to processing it to selling it at the stations. Most of their money is actually made from selling to other processors, and many of them are in foreign countries. I haven't looked at this quarter's report, but I recall seeing one where 75% of their profits came from foreign sources.

We've made changes at our household by dumping the SUV for a hybrid. Based on the number of miles the vehicle is driven per year, we'll save about $3000 (at today's prices) in fuel costs.

njl2 wrote:

Gas should be made like other energy resources and put under government control. The government regulates electricity so that this doesn't happen, it should do the same for gas.

The GLOBAL price of oil is up. Most of our oil comes from overseas. The government getting in charge will make things worse.

The government can look into possible collusion but when the price of oil is up world wide over $100+ a barrel it's not really a US problem.

OPEC is a cartel. If companies did what they did it would be illegal but it is governments. So we just take it and bend at the knees.

"The fact of the matter is that we should increase the supply of oil by allowing new refineries to be built, allowing companies to extract more oil so that supply will increase. That will bring down the price of oil. That will spur the economy leading to more development of alternative fuels."

I think you meant we should allow for more exploration and drilling to increase our supply of oil. And a second point you argue for more refinieries so more gas can be refined.

The problems are 1) There is a lot more demand for oil these days with India and China growing. Most of the easy to drill oil has alreadly been drilled and where there still is a lot of oil there is political instablity in those areas. There are other areas where oil may be found and drilled but it will require more work and expense to drill it. Hoping and praying that an easy supply will always exist with better technology isn't the route I'd like to go.

2) Oil companies have increased the capacity of the current refineries a lot. They are not really interested in building new refiniers where it wouldn't be easy to get the oil to the plant and out of the plant. Bush's plan for using old military bases is not really workable.

It is very important to get the US off its dependence of foreign oil. We import something like 12 million barrels a day and produce about 8 million barrels a day. We are beggers when it comes to our energy and that isn't a good thing. As supply does diminish, we need to look at all alternatives.

Nuclear energy looks like the best alternative. We need to build standardized plants and use France as a model.

We should also develop alternative energy such as solar, wind and others but no one really thinks they can be the substitute or replace oil for the majority of our energy supply. Coal is the worst.

Increase taxes on petrol in order to reverse global warming.

Let me get this straight, if you have a hot dog stand with net margins of 10 percent. The next year the cost of hot dogs doubles, so you keep the same thin margin of 10 percent, but at the end of the month you realized you had record profits!

Oh my, how did that happen? Why are you gouging your customers? Someone's got to get to the bottom of this!

This thread is proof that the bell distribution curve has two wings.

You want honesty? Mobil pays more tax money to the government than the entire bottom 50% of US tax payers. That's cold hard truth.

An excerpt I liked:

"We dug our hole."

Flame on!

I suppose you belong to the right wing?

OP has no idea what XOM even does. Doesnt even know whether they get oil out of the ground, do they transport it, do they set price per barrel, are they in cahoots with OPEC, did they shut down Hugo Chavez's credit lines in Feb after he threatened embargo, do they have a natural gas component, do they own electric power companies in California, do they have seat on the board at Ford, how much of the total daily US consumption in mm of barrels they could provide if they began unrestricted drilling in Montana and the Dakotas etc etc etc

A Voice of Reason (maybe) wrote:

You want honesty? Mobil pays more tax money to the government than the entire bottom 50% of US tax payers. That's cold hard truth.

But don't they make as much or more than that bottom half?

It's percentage that matters, not dollars. They get a ton of tax breaks that the rest of us could never dream of..

They pay a much higher percentage of what they make, so their overall income is much less than the demographic I'm comparing against.

And I always hear about these tax breaks... can someone please give me an example of how this is bad?

I just did a quick once over of the Exxon Mobil financials and there is nothing out of line there for a large well run company in an established industry with growing demand and a high barrier to entry.

They have a 20% EBITDA margin which is good but not out of line for what I;'d expect. Their operating margin is 16%. Their Capital Expenditures are between 4% & 5% of their net revenues. Again all in line with a big well run company in that type of industry.

Maybe its the size of the company that is bothering you. would you be happier if it was split up into 100 company's with revenue of 3 Billion each and 300 million in net income? Is that more stomachable to you?

They are a well run financially sound company, nothing more or less. Not an evil empire or a savior.

Somewhere a village is missing an idiot. Actually every village is missing an idiot today - and they're all posting on this thread today.

somedude wrote:

Mobil just announced its quarterly profit. 10 billion+. The second largest in US history.

They should at least be honest instead of coming up with all of these excuses of why gas is so high.

They should come out and say, "We are going to screw the American public so that you can't buy anything else for our own greed and there is nothing you can do about it."

It's obvious that they get together. It's illegal collusion.

They also try to block the production of anything with an alternative fuel source.

I would pay 80,000 right now for a hydrogen car just so they can suck on their gas.

The good news is this will eventually lead to the only thing that will cause a change in greenhouse gas emissions.

Honesty is all we want.

Before I even clicked on this thread, I was pretty sure it was about gas prices. I couldn't agree with you more. I'm all for free trade, but when there is obvious collusion among the major oil companies, I believe the government needs to intervene. I believe high gas prices play a large role in our current economic woes. Oh, and I want a lot more than honesty. I want accountability and lower gas prices.

All humans are evil and so oil companies are evil empires.