How the Oil Companies Taught YOU To Be Happy With the Price of Gasoline.

"How the Oil Companies Taught YOU to Be Happy With the Price of Gasoline -- And How the Government Is Doing the Same with Your Freedoms."



The laws of supply and demand have been cited to justify the ever rising price of gasoline over the last few years.

The oil companies have repeatedly released reports of oil and gasoline shortages due to man made conflicts and natural disasters and they used these reports as the "reason" that gasoline prices were spiking.

Yet, during this exact same time frame, the oil companies have REPEATEDLY posted record profits.

My question is this; If oil SHORTAGES are responsible for the increase in price, then why do the oil companies continue to make more and more of a profit each year?

Let's break this down in simple terms.

Let's say that you are a farmer.

You grow and sell tobacco.

For the last 10 years, your crops have yielded 10,000 bales of tobacco and you sold each of these bales at $10.00.

That leaves you at $100,000 gross from the sale.

Now, let's say it cost you $80,000 to get that crop from seed to sell.

You are left netting a $20,000 profit.

Okay, the next year, as a result of poor weather conditions, your crops only yield $5,000 bales of tobacco.

In order to turn the same profit, you must sell the bales at $20.00 each.

The above example runs along the same lines that the oil companies give for the increase in their product. They tell us that, as a result of some unforseen hardship, their supplies are down and they are having to raise the prices accordingly.

However, if this is indeed true, how it is that they are able to double or triple their profits from the previous years? If they are simply raising prices to compensate for less available product, wouldn't they be posting profits similar to all the previous years? One would think so, yet, this is not the case.

At the very least, these companies are doing nothing less than PRICE GOUGING.

When a grocery store in Florida does the same thing in preparation for hurricane season, that business runs the risk of being fined and/or shut down completely. Yet, the oil companies seem to be able to practice this as they see fit.


Well, if that's the case then; Why don't they just jack the price up to $6.00 a gallon and be done with it?

Simple, if they double the price of gasoline overnight, there would likely be riots and protests out the ass.

So, how did they go about this price gouging so effectively.

That's an easy one as well. For the sake of this post, I shall use rounded numbers as examples.

5 years ago, the price of gasoline is $1.50 a gallon.
The oil companies want to raise the price, but they want to do so without too much resistance.
So, they hike the price to $2.50 a gallon.
People are pissed off, but not so much they actually busy themselves with protesting or rioting.
Slowly, the price creeps back down to $2.25 a gallon and the public is happy again because the price is going down.

So, what have they accomplished? They raised the price of gasoline by $.75 a gallon and not only is the public not mad about it, they are actually happy because it's not any higher.

Rinse, repeat
Rinse, repeat

And now, here we are. Using this exact same method, in repetition, they have more than doubled the price of gasoline and avoided any type of REAL public backlash.

Sure, the American people are sick of having to pay so much for gasoline, but they let it slide because "At least it's not as high as it was last week."

They have officially spoon-fed us a nice bowl of crap and taught us to like it.



This same method has been used time and time again in MANY aspects of the American society. From healthcare prices to the freedoms they take away, they stair step us into acceptance.

How much longer are we going to put up with it?

What price does the gasoline have to reach before we do something about it?
How many of our freedoms do they have to take before we say enough is enough?

We have turned into a society of sheep being led to slaughter.

Instead of saying, "HEY! WAIT A MINUTE!! JUST WHAT THE HELL DO YOU THINK YOU ARE DOING?", we say "Well, it could be worse."

We don't seem to care about ANYTHING until it's knocking at our door.

Instead of saying, "Hey, they MUST be doing this for a reason.", we turn on Fox News or CNN to make sure they tell us everything is going to be just fine.

It use to be considered un-American to NOT question the government. Now, you are an America basher if you even begin to question a decision the government makes.


Why force something on you when they can sucker you into accepting it?

Why thrust tyranny onto a populace and risk revolt, when you can slowly get them to give up their liberties of their own free will using the guise of "security"?

Why charge $2.50 and risk protest when you can charge $2.25, make just as much money AND keep the flock happy?

We, the people, ARE that frog in the water and the temperature is slowly rising.


Jasn


Line
Read
Line

Great post! Conocos income is up 89 percent. I would expect it to stay the same if they were just making up for setbacks. In my mind this is treason and price gouging.

Oil companys make record incomes in last quarter.

Oil companies awash in record levels of cash

You really explained it well. I knew exactly what was going on but am not that great of putting it to pen in ways people understand.

Of course the nature of how it is done is why people aren't getting upset too badly about all this. It's a shame, but the passion of the people to do more than breathe is gone. I guess being armchair revolutionists is about as fancy as it is going to get.

reply to post by groingrinder


Indeed, if they were simply "compensating" for lost product, you would expect their profits to remain the same. Instead, they skyrocket.


Price gouging! Nothing more, nothing less.

But why should the government do anything about it? They are all big oil puppets.


Jasn

Everyone knows it price gouging. Everyone knows they are going to keep rasinig the price. And why wouldn't they? This is a capitalist world. And the oil companies have the liquid gold. The consumer buys that liquid gold to get to work in thier car or bus, etc. The consumer doesn't drill the holes, build the oil refineries, build the oil rigs, buy the land, etc. If you drive a vehicle, pretty much you must pay whatever amount they are charging you for.

The way of putting it is this for oil companies. "We have the goods, the only goods, we have all the supply, we charge whatever we want because you cant get it elsewhere, and if you can good for you, but i bet they'll charge the same amount as us because as the end of the day, they make more money."

Please know that there is really nothing the governments can do except subsidise for the consumer, which is really just the tax man paying more, ie, yourselves.

reply to post by DaRAGE


Or the government could put stipulations on the oil companies that force them to have to compete.

OPEC is a monopoly. Break it up and start levying huge fines against them for conspiring to drive up oil prices.

There is a reason that this country has anti-monopoly laws.


Jasn

Gasoline doesn't come from seeds.

Oil has to be located, drilled for, pumped out of the ground, transported, refined, transported again and sold by a retailer for profit.

That's a lot of infrastructure.

An awful lot of our oil comes from overseas.

Some oil producers don't like America.

There is more competition for crude oil than ever.

Demand for gasoline and heating fuels is high, very high, even if at the moment it is lower than in recent months.

We live in a free market.

Companies who incur the costs of bringing petroleum products to market want a return on their investment. The more the better.

We own cars. Sometimes, we own more than one car.

We own trucks. Sometimes we own trucks and cars.

We love SUVs and trucks.

Sometimes we own a truck and an SUV.

These vehicles get miserable gas mileage.

Traders and speculators are driving up the price of oil.

This is an artificial influence on the market and eventually the bubble will burst.

It's sad that gasoline costs as much as it does.

I don't like spending as much on gas as I do.

But, I could do somethings to make my gasoline expenditures less.

I could sell my car.

I could get a job closer to home, so that I could walk to work, and drive less, if selling the car is not a viable option.

I could carpool.

I could buy more fuel efficient vehicles. Most people can accomplish this without buying those over-hyped hybrids and just get a car that gets double digit gas mileage.

You could get a motorcycle or scooter to ride on nice days.

And the list goes on.

The best way to solve this problem is for Americans to use less gasoline and to do that for good, instead just until the prices go down a few cents, because if the price goes down, demand will again soar.

The economics of oil is more complex than the economics of farming, not to take anything away from the essential work of our farmers.

[edit on 2007/11/10 by GradyPhilpott]

reply to post by GradyPhilpott


I can think of a better solution.

How about we fire those refineries back up and actually USE the oil we have here?


Jasn

Originally posted by SimiusDei
How about we fire those refineries back up and actually USE the oil we have here?

That would leave no excuse for interventions overseas. That's why it's not done.

reply to post by Beachcoma


*shifty eyes*

There's something about your avatar that makes me wish I had a club.

Can't figure out what though.



*runs away to avoid flack from cruel joke*





Jasn

reply to post by GradyPhilpott

I really do not think economics has anything to do with outrageous profits. That is just greed. You gave a long laundry list most of which did not address the excess profits issue. Every business has their overhead and their profits. That is the nature of being in business. If all the grocery stores suddenly marked up their product the way gasoline is, there would surely be government crackdown and prosecution under anti-trust laws.

I seem to remember a episode of the Daily show where a man who owned a gas station was interviewed and talked about and showed the oil company actually reposessing his whole store because he refused to raise his gas prices! I think it was Ed Helms that said "Dont FXXX with oil companies!" That awoke me to the reality of the scam, making a profit is good if its fair but what oil companies are doing is unfair in so many ways I will not have enough time in the day to list them all!

reply to post by groingrinder


Every complaint I've heard about oil company profits has been in terms of dollars not percentages.

Don't we want oil companies to be profitable? Don't we want people to buy their stocks?

Don't' we want a steady flow of petroleum products, even at high prices?

Check out these links. Things may not be what you think.

www.taxfoundation.org...

www.iht.com...

ap.google.com...

www.thestreet.com...





[edit on 2007/11/10 by GradyPhilpott]

We got an oilman in the White House. Doesn't it strike anyone else as odd these prise rises just so happen to coincide with his "reign"?

Gas prices have been rising for the last 35 or more years, through the presidencies of Nixon, Ford, Reagan, Bush, Clinton and Bush.

See a pattern there?

I don't.

There have been some dips in prices at times, but my adulthood has been characterized by high gas prices, high demand, low supply and long gas lines.

It probably won't get better.

reply to post by GradyPhilpott


I just find it odd that it was relatively cheap for a while there in the Clinton years and now its higher than it even was back in the Energy Crisis days.

Don't the Oil companies have a sort of monopoly on the whole international sector? If that is so, what is stopping them from raising prices to their whim? It should be noted that sure the dollar is diving and isn't worth as much oversees. Then again is there something else playing into all of this?

Remember guys, the price of oil is a leading indicator of inflationary expectations. When considering oil company profits...factor-in a substantial loss in purchasing-power of the USD....courtesy of a decade of Wall St. corruption, fraudulent banking and financial sector practices, and an abysmal performance by the US Treasury Dept & your neighborhood Federal Reserve.

The effect of a rapidly declining Dollar on oil producers with a Dollar-peg, especially import-dependent producers like Saudi Arabia, is acute inflation. Imported products from the Euro-zone start to get a bit expensive. Are they still making money? You bet, but there is zero incentive to ramp-up production in earnest until the Dollar stabilizes. A more likely reaction is for producers to hedge against losses by investing their Dollar reserves in stronger currencies and commodities like Gold & oil. Unfortunately for the US consumer, this practice only puts further pressure on the Dollar, and upward pressure on oil.

Most Americans won't experience direct repercussions from the unfolding subprime debacle, but we all dislike higher pump-prices. If oil-shock is what it takes to wake-up the average American...then so-be-it. There's been alot of fleecing going-on, and imo, it's about to get fleecy-er.