Gas prices reflect refinery gouging
UCAN News
Read this article as it was originally published in the Sunday Perspective Section of the North County Times.
Gas prices reflect refinery gouging
Big Oil's earnings statements read more like a confession than a profit report.
As North County's gas prices edge toward $3.50 a gallon, consumers should know that gasoline now costs 11 cents more than it did last year when oil was selling for $11 more per barrel. For example, on Thursday, the North County Times reported that the average price of gasoline was $3.41 a gallon. Meanwhile, the price of oil was $63 a barrel. On the same day last year, the price of oil was $74 a barrel, and gasoline cost just $3.30 a gallon (source: U.S. Department of Energy).
Something is terribly wrong when oil prices drop and the cost of gas goes up. Big Oil says it is all about "supply and demand," but the ugly truth is that North County residents are getting gouged deeply. Here's why: An $11 decrease in the cost of oil should mean a price cut of 26 cents from last year's price of $3.30 a gallon. The industry says it "struggles" to keep up with demand for gasoline, but according to the California State Board of Equalization, gasoline demand in the last half of 2006 was 1 percent lower even though there are more drivers on the road. While the report does show a 1 percent bump in gasoline consumption during January 2007, the cost of gasoline in North County averaged $2.53 a gallon ---- almost a dollar less than it does now.
What has happened is that the oil companies have shifted their profits centers from the "upstream" sector (oil and drilling) to the "downstream," which is refining. In the meantime, retailers are limited to an average profit of about a nickel a gallon.
Last week, Big Oil's first-quarter profit reports came rolling in with more bad news for consumers. On April 26, Exxon/Mobil reported that even though it produced less product than last year, it earned profits of 10 percent on unusually high refinery margins (source: MarketWatch) and that the margins were so high that the company "overcame lower crude oil and natural gas prices" (source: Associated Press).
The following day, April 27, Chevron joined the obscene profit bandwagon by announcing that it earned first-quarter profits of 18 percent, much of it on increased refining margins, even though the company produced less gasoline than last year (source: Associated Press, International Herald-Tribune). Meanwhile, Valero announced that it made the highest first-quarter profits in the company's history. Valero Chairman Bill Klesse said longer downtimes for planned refinery maintenance helped create the shortages that reaped record-shattering profits (source: San Antonio Business Journal). And on Thursday, Shell announced that despite "unusually low seasonal gas demand," that "better refining margins, particularly in the U.S. West Coast," drove profits sharply higher (source: MarketWatch.)
Bottom line: These aren't "profit reports," they are confessions.
Exxon didn't "overcome" low oil prices, as the reports suggest. It gouged its way to higher profits due to an almost complete lack of competition at the refinery level. And so did Chevron, Shell and Valero. They did it by restricting supply, panicking the markets, and intentionally underproducing gasoline.
Charles Langley is a gasoline analyst for UCAN, the San Diego-based Utility Consumers' Action Network. He also collects gas-price data for the North County Times. He edited UCAN's free 32-page guide, the "Guzzler Buster: 127 Secrets to Squeezing More Miles From Each Gallon." UCAN's "Guzzler Buster" is available free of charge to San Diego County residents who visit the UCAN Web site at www.ucan.org.
Like what you see? Go ahead and show your support! UCAN is a truly independent non-profit watchdog organization, dependent on grassroots donations like yours!
Utility Consumers' Action Network
File a complaint about a company online.
Terms & Conditions
UCAN.org is made available by the Utility Consumers' Action Network to assist you in becoming what you always knew you could be, a consumer ROCK STAR! We take no corporate money, and are beholden only to you, the consumer. As such, the site is here for educational, advocacy, and empowerment purposes, as well to to give you general information and a general understanding of the law. Just remember this site is NOT here to provide specific legal advice. By using this web site you of course understand that there is no attorney client relationship between you and the Web Site publisher, UCAN. The Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
That said, get to digging on the site, inform yourself, speak your mind, and earn Watchdog Bones! This is YOUR site, and we mean it. So comment on any of the content, discuss the latest issues in the forums, file a complaint on a company with the fraud squad, and generally cut loose.
See our Privacy Policy
RIDICULOUS GAS PRICES - STOP BITCHING AND TAKE ACTION
Forget 10, 20,30, 50 % decrease in gasoline demand in order to have a supply/ demand impact reduction in gas prices !
HEY...CONSUMERS...WAKE-UP...LETS GO FOR A 400 % reduction in gasoline demand.
We can then sit back back . . . and watch prices go down.
HOW DO WE DO IT ? ? ?
HERES HOW: CAR POOLS
If every American employee traveling alone in his car to work 5 days a week were to travel to work in car filled with 4 co-workers, gasoline demand would drop approximately by 300 %.
Hows that for CONSUMER POWER ? ? ?
GOT THE PICTURE ? ?
STOP BITCHING AND DO IT !
Has found. It is that site
Has found. It is that site about which I wrote.
http://timesupevil.info
Exxon Mobil Boycott 2007 - Chain Letter
For the rest of this year, DON'T purchase ANY gasoline from The two biggest companies (which now are one), EXXON and MOBIL. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit. But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers. It's really simple to do!! Now, don't wimp out on me at this point...keep reading and I'll explain how simple it is to reach millions of people!!
I am sending this note to about thirty people. If each of you send it to at least ten more (30 x 10 = 300)... and those 300 send it to at least ten more (300 x 10 = 3,000) ... and so on, by the time the message reaches the sixth generation of people, we will have reached over THREE MILLION consumers! . .
If those three million get excited and pass this on to ten friends each, then 30 million people will have been contacted! If it goes one level further, you guessed it..... THREE HUNDRED MILLION PEOPLE!!!
Again, all you have to do is send this to 10 people. That's all. (If you don't understand how we can reach 300 million and all you have to do is send this to 10 people.... well, let's face it, you just aren't a mathematician. But I am... so trust me on this one.)
How long would all that take? If each of us sends this email out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8 days!!!
I'll bet you didn't think you and I had that much potential, did you?
Acting together we can make a difference. If this makes sense to you, please pass this message on.
PLEASE HOLD OUT UNTIL THEY LOWER THEIR PRICES AND KEEP THEM DOWN. THIS CAN REALLY WORK. YOU KNOW THEY LOVE HOLIDAYS AND SUMMER TRAVELERS.
Media Request
We would like someone from your organization to come on FOX radio and speak with us today.
Please contact me
Carson,
FOX RADIO & AM 570 KVI
206-404-3092
Price Gouging
The case of supply and demand. Oil refineries cut production, then prices rise with full cooperation of the government who do not enforce laws such as price gouging or monopolies or border control unless there is a personal reason. Remember right before elections? Gas prices at the pump dropped dramatically. The rich get richer, the poor and middle class get poorer. John Doe, the Working American, suffers for it.
For Sure
Antitrust Laws for Gasoline Companies.
The price fixing by large gasoline distributors is obvious. It is against antitrust laws when major companies collaborate in order to control the market?
Definition of antitrust statutes - Federal and state statutes protecting trade and commerce from unlawful restraints, price discrimination, price fixing, and monopolies.
The record profits indicate there is no competion amongst the gasoline companies. I have not heard of any stations running out of gasoline. By raising the prices for gasoline in order to increase the supply (inventory) is the collaboration and violation of antitrust laws these companies will face. "What the market place price will bear." is not a law.
Huge law suites against the gasoline companies in the near future are in order.
For now the consumer (the victim) can only reduce consumption of gasoline, boycott, or inform their government representatives. I think all three will work. A boycott on May 15th is a good start, and a further boycott of EXXON Mobil would be needed.
organizational outrage is nothing without citizen outrage
I like your spirit! Let's get out there and give 'em hell! No holds barred! Full-scale, nuclear, sub-atomic, molecular, OUTRAGE!! oh, wait...you can't? already have a job? busy keeping up with the joneses? man, what a bummer, i thought you really wanted to start something...
It's easy to tell other people they should be passionate and do something. It's much harder to do so yourself, that requires REAL sacrifice, REAL dedication...not just hot air. Organizations draw their strength from their members and supporters. Public advocacy groups depend on the public. If citizens are not "passionate" or "outraged" then it is pretty tough for organizations to be. UCAN has been ringing the warning bell on gouging and all other types of corporate abuse for decades. But if drivers aren't outraged enough to stop filling up their tanks or concerned enough to buy fuel efficient vehicles instead of SUVs, then there is little UCAN can do. How do you go to government officials and say, "sir, we know that no one is raising much of a fuss about issue X, but we really think you need to pass a law that will make you a lot of enemies and probably cause you to lose your next election...no, no, we promise, it's a big deal, people are mad as hell, they're just too busy with other stuff to voice that right now." Come on!
Short of rioting in the streets, the only thing that will change the situation is if the economy gets hit big time. Or rather, if the "right" economy gets hit big time. Many American corporations are more profitable than ever and the Dow is setting all-time highs. Meanwhile, a large portion of the country lives in conditions of a third-world nation by health, education, and human-rights standards, but as long as "the economy is [still] strong" (ie the "Fortune 500" companies are strong), who cares? Corporations win while consumers/citizens (is there really a difference?) lose, that's just how the game is played.
So I respond by saying, "join UCAN (or another organization like it) and help the cause!" The reason UCAN, and organizations like it, ask people to join and help the cause is because of the incredible odds they are against. consider this: Exxon Mobile has a net worth of around $500 billion. UCAN's net worth is roughly FOUR ONE-MILLIONTHS of that!! But don't worry, a quick infusion of passion is easily worth $499.99 billion.
Time to get outraged about gas gouging
Jet Blue strands passengers on the runway for hours, the nation goes
ballistic at how airlines treat their customers, and then Jet Blue
immediately changes its policies.
Don Imus says "nappy headed ho", people go ballistic, and NBC fires him.
Americans are getting gouged beyond belief and the economy is suffering, yet
organizations like UCAN show no outrage. Where is your outrage? Why are you
not launching an all-out, full-scale, no-holds-barred attack on the oil and
gas companies? Why are you not exposing their pathetic attempts to mislead
consumers (e.g., We spend more money on R&D than we earn in profit)? Why
aren't you hammering on local businesses adopt "work from home" strategies?
Why aren't you shaming people who needlessly drive large SUVs?
Please don't respond by saying, "Why don't you join UCAN and help our
cause?" I can't - I have a job that already takes up way too much of my
time.
Your organization needs an infusion of passion!
Gas prices: Too broke to pay attention
Dear Anonymous,
As you observe, NBC got upset with Don Imus and they fired him.
I guess you have the same choice: You can fire your oil company and start taking the bus to work. Or you could work from home your self.
If you were a member of UCAN, you would know that we have railed against the inflationary effect of high oil prices, and have documented the government's ongoing deception regarding the true rate of inflation.
If you were a member, you would know that our gasoline project at www.fueltracker.com has helped thousands of people (as many as 20,000 a day) and has consistently documented the scope of the problem.
If you were a member, you might know that we started the gas project in 1996 when the "gouge gap" between L.A. and San Diego was routinely 25 to 30¢ higher than it is now.
If you were a member, you would know that UCAN has spurred mutliple state investigations into price gouging, and has provided numerous documents, testimony, and data to the FTC, the State Assembly, the California Senate, and the Attorney General demanding changes in the way our government treats oil companies.
If you were a member, you might have read our commentaries and news articles. You would know that we have consistently stripped the industry bare and have exposed them when they are lying.
But you don't know that because you are not a member. You are information-poor.
In fact, you could say that you are too broke to pay attention.
Charles Langley
Gasoline Analyst & Publisher, UCAN Watchdog
Post new comment