Do Oil Companies Make Excessive Profits?

If you read my post about the laws of supply and demand, maybe you can guess where I'm going with this one.  Do the oil companies make excessive profits?  I don't think so.  However, the oil market is ripe with collusion that limits competition, and that collusion hurts the consumers.  Consequently, it also hurts the US economy.

Does the collusion occur between oil companies?  I firmly believe that it does NOT!  So, where do we have collusion?  The answer is at OPEC.  That is a big one.  A huge percentage of the world's oil supply comes from the OPEC countries.  These countries have meetings where they all get together to decide how much oil they should produce to keep the price high.  OPEC doesn't control 100% of the oil, or these countries would drive the price even higher.  It seems that the rest of the world tends to crank up their production whenever the price of oil gets very far above $100 per barrel.

What percentage of the price of a gallon of gasoline is profit for the oil companies?  It is generally below 10%.  That's hardly an excessive profit margin.  In fact, the taxes imposed by our government make Uncle Sam and the states much more insidious.  They collect a much larger percentage profit from the gasoline sold than the oil companies.  Does the government deserve this big tax collected?  They didn't drill and find the oil, pump it out of the ground, transport it to a refinery, refine it, carry it in inventory, ship it to the gasoline station, invest in equipment to pump it and sell it to the consumer, or do anything else of value.  By the way, the oil company doesn't pay that tax; you do.  Of course, all of the workers in the oil companies, on tankers, in gas stations, etc. etc. pay income taxes as well.  Guess what, we pay those too because the cost of labor is built into the price.  It looks to me like the government is making all of the excessive profit.

Of course, the government under Barack Obama is doing a lot of other stuff to help us out too.  They are doing everything they can to reduce the supply of fossil fuels.  The goal is to keep the supply low enough to raise the price of all fossil fuel energy.  That's the only way they can make alternative energy even close to competitive and profitable.  Since our tax dollars have been used to invest in alternative energy companies and companies that build alternative energy equipment, this is really a form of collusion that is very damaging to the consumer.  The "tree hugger" crowd wants to price fossil fuels out of business, and they don't care what that does to the economy.  If you lose your job, that's a necessary consequence of saving the earth from that mythical disaster, man-made global warming.

This MessAPolitico is driven by ignorance and greed.  There are a lot of people that believe in man-made global warming.  There are also a lot of so called scientists at big universities that make a lot of money off of government grants.  If you want a grant, you had better make sure your research supports the EPA contention that driving an SUV will destroy the earth.  There are all those crony capitalists that are taking government money (our money) and using it to make themselves rich too.  Those so-called "green energy" businesses can't stand on their own in the marketplace, and no amount of government investment is going to make the business plans work.  But these entrepreneurs won't be starting these businesses without paying themselves big salaries that are paid for by our investments made on our behalf by the US government.  If the government succeeds at artificially driving the supply of fossil fuels down by disallowing pipelines or hydraulic fracturing (fracking) or drilling in the ocean or drilling in the ANWR or whatever, then the price may just get high enough to make alternative energy viable financially.  The question is very simply this:  will our economy still be alive at that point?

All it takes is collusion created by a conflict of interest on the part of the government MessAPolitico.  Get the government out of the way!  Allow free market capitalism to save our jobs and save our economy.