Exxon record profits again

[MikePA]

The oil companies would just adjust the price at the pump and make a legitimate profit.

Since 10 cents per gallon profit is too much, what's a 'legitimate' profit?

 

[slowrev]

According to the Energy Information Administration, on average, oil companies make 10 cents per gallon profit. Since they sell a lot of gallons, this is considered astronomical profits. If the oil companies decided to only be half as greedy, cost at the pumps would drop by 5 cents. Even if they decided to make no profit, price at the pumps would drop by 10 cents.

Now that the greedy oil companies have been dealt with, who is the next target. Federal tax at 18 cents per gallon. Is anyone complaing about that? Nope.

Next? State and local taxes which vary from 8 cents (Alaska) to 50 cents (New York) per gallon. Is anyone complaing about that? Nope.

In this scenario, oil companies are making no profit on gasoline, why should they produce it?

You seem to have forgotten the distributor and dealer profit. And the oil companies selling crude to themselves and other companies. Not as simple as you imply.
How much profit does Kroger make on a gallon of milk ?

 

[MikePA]

You seem to have forgotten the distributor and dealer profit.

No, I didn't. This thread is about oil company (Exxon) profits. Plus someone else posted about what the dealer makes.

And the oil companies selling crude to themselves and other companies. Not as simple as you imply.

They make 10 cents a gallon. If it's more complex, please enlighten us.

How much profit does Kroger make on a gallon of milk ?

Probably too much.

 

[slowrev]

Mike, I am assuming that is pure profit after all expenses, etc has been considered ?
Don't get me wrong I feel that specualtion and world tensions is causing most of our oil price grief. But apparently it is not too bad, since the useage is not dropping much and people still buy guzzlers.
Perhaps Exxon should bail detroit out since their guzzlers have helped Exxon to make a lot of money ?

 

[MikePA]

slowrev, the 10 cent profit figure was from EIA. I am not sure how it was calculated.

 

[MadReferee]

How much profit does Kroger make on a gallon of milk ?

Speaking of profit, supermarket overall profit margin is in the 1%-2% range. They make up for the low margin by selling in volume. The average convenience store is working at about 20%-25% overall profit margin (excluding gas sales). You would be surprised how little retailer profit there is for some items, and how much for others. And the distributors are always trying to squeeze you. My worst distributor was Coke, the best was Budweiser. My 3 biggest profit centers were beer, cigarettes and magazines.

Now let's get back to oil company profits.

 

[frank_f15]

Single digit oil prices. I wouldn't mind it. The oil companies would just adjust the price at the pump and make a legitimate profit. Our cost would be less and they would still do fine. It's a pipe dream though. It ain't going to happen. I hope your stock goes up at the same rate as fuel prices, but I bet that will not happen either.

10 cents a gallon for oil company profit? How did they squeak by before? Gas prices in my area have dropped 25 to thirty cents recently (diesel hasn't) with profit margins so thin the oil companies and the retailer must be selling at cost. I don't think so.

When gas goes to 250 dollars a barrel then I suppose most of you will suspect there is something rotten it Denmark. It will really be smelling bad by then.

I won't even try to understand the current price of gasoline or diesel, but i do beleive 3 things 1) the fuel prices are increasing the price of everything 2) until it stops selling neither the oil companies or the producers will lower the price 3) I BELEIVE WE ARE BEING HAD

 

[Casey1]

Oil is not 2 or 3 times more expensive to get out of the ground than it was two years ago. A barrel at 70 dollars? I know in Saudi they get it out of the ground cheap. Maybe Exxon is not the one making most of the profit but somebody sure is and it's not us. SkyPup maybe? LOL

I passed by an Exxon station today and their price was $2.51. Two weeks ago it was 2.95. Oddly enough their diesel is still $2.95. Ten cents doesn't cover that and I suppose diesel is much harder to refine than gasoline. They are not selling the ultra low sulfur there yet either.

The milk and egg thing is interesting too. Sometimes they sell those at the Exxon station.

 

[ducati996]

Since 10 cents per gallon profit is too much, what's a 'legitimate' profit?

Gee - since they were profitable and not complaining when oil was between $35 to $42 a barrel we can start there.

 

[MikePA]

Gee - since they were profitable and not complaining when oil was between $35 to $42 a barrel we can start there.

Gee - you didn't answer my question, again. For the sake of argument, let's say that profit was 1 cent per gallon. That'd reduce what you pay at the pump by 9 cents or 3%. Wow.

 

[slowrev]

on the egg and milk thing, I can get a cow and chickens, it is however quite difficult to make gasoline
I rank energy more like medicine, gotta have it, can't make it.

Much of the oil being sold now was drilled into when it was selling for $40/bbl or less. Also the profit on gasoline is not the only profit that oil companies make.
There is many items made from petroleum, what about the prices on those ? have they gone up a corresponding amount compared to gasoline ?
Then there is natural gas, hmm it does not seem to come from the middle east.....Why has it gone up so much ?I understand the supply and demand thing, but still think we are being ripped off to some degree.
Ben

 

[ducati996]

According to the Energy Information Administration, on average, oil companies make 10 cents per gallon profit. Since they sell a lot of gallons, this is considered astronomical profits. If the oil companies decided to only be half as greedy, cost at the pumps would drop by 5 cents. Even if they decided to make no profit, price at the pumps would drop by 10 cents.

Now that the greedy oil companies have been dealt with, who is the next target. Federal tax at 18 cents per gallon. Is anyone complaing about that? Nope.

Next? State and local taxes which vary from 8 cents (Alaska) to 50 cents (New York) per gallon. Is anyone complaing about that? Nope.

In this scenario, oil companies are making no profit on gasoline, why should they produce it?

Not sure where you got 10 cents a gallon but based on EIA breakdown
of unleaded gas being at $2.98
the breakdown for the crude is 52 % , refining 26%, distrubiton & marketing 6% and taxes 15%
Either way its more than 10 cents a gallon -if you could please define if its net or gross profit

Gasoline and Diesel Fuel Update

 

[MadReferee]

Not sure where you got 10 cents a gallon but based on EIA breakdown
of unleaded gas being at $2.98
the breakdown for the crude is 52 % , refining 26%, distrubiton & marketing 6% and taxes 15%
Either way its more than 10 cents a gallon

Gasoline and Diesel Fuel Update

As I said earlier, everyone pays the same amount for gas at the bulk distribution terminal. The difference in prices from the terminal to the pump is usually in the 30-50 cent range. This markup DOES NOT GO TO THE OIL COMPANIES, it goes to the local distributor, hauler and retailer.

The big oil companies are making their profit earlier on in the process.

 

[MikePA]

Much of the oil being sold now was drilled into when it was selling for $40/bbl or less.

1. It doesn't take that long to get a barrel of oil from the the Middle East to the refinery. So, the oil being sold now was not drilled when it was $40/bbl.

2. Even if it was, items that are getting more expensive are priced at what it will cost to replace them in inventory, not what it cost to acquire them.

An example;

Your Unit Cost - $1.00
Your Unit Selling Price - $1.10
You sell 1 item.
Wow, you made a 10% profit and have $1.10 in the bank.

Problem is, now the cost to replace the item in inventory is $1.20 and you don't have enough money to buy it. The more volatile your replacement cost, the harder it is to set prices. Too low and you lose money and make the shareholders mad, too high and people accuse you of excess profits.

 

[MikePA]

Not sure where you got 10 cents a gallon but based on EIA breakdown
of unleaded gas being at $2.98
the breakdown for the crude is 52 % , refining 26%, distrubiton & marketing 6% and taxes 15%
Either way its more than 10 cents a gallon -if you could please define if its net or gross profit

Gasoline and Diesel Fuel Update

Try doing more research on the EIA site. Oil company profits on a gallon of gas is 10 cents when gasoline costs $3.00.

 

[Casey1]

It's funny that the oil drilled for 30 or 40 dollars a barrel is the same oil drilled for 70 now. There is something wrong and I don't know exactly what it is but if you believe there is only 10 cents a gallon profit going on then I will sell you some ocean front property in Arizona for oh 10 cents an acre.

 

[MikePA]

It's funny that the oil drilled for 30 or 40 dollars a barrel is the same oil drilled for 70 now. There is something wrong and I don't know exactly what it is but if you believe there is only 10 cents a gallon profit going on then I will sell you some ocean front property in Arizona for oh 10 cents an acre.

What do you mean 'there's something wrong and you don't know exactly what it is'? What's wrong is the people who pump the oil out of the ground have doubled the price of a barrel of oil.

The OIL COMPANIES LIKE EXXON make 10 cents a gallon. I did not say the people who pump the oil out of the ground are only making 10 cents a gallon. EXXON does not pump the oil out of the ground. EXXON is not a retailer. This thread is about EXXON.

 

[slowrev]

1. It doesn't take that long to get a barrel of oil from the the Middle East to the refinery. So, the oil being sold now was not drilled when it was $40/bbl.//

//

HUH ?
You mean wells drilled before the war are not still producing oil ? All oil does not come from the middle east.
Ben

 

[MikePA]

1. It doesn't take that long to get a barrel of oil from the the Middle East to the refinery. So, the oil being sold now was not drilled when it was $40/bbl.//

//

HUH ?
You mean wells drilled before the war are not still producing oil ? All oil does not come from the middle east.
Ben

I misunderstood your comment. I agree, I imagine there are wells that have been producing that long. However, no refiner, such as Exxon, controls what they pay for a barrel of oil since they (the refiner) do not pump the oil out of the ground.

 

[SkyPup]

Exxon stations have a way higher margin on their eggs, milk, bread, Gatorade, beer, magazines, and drinking water than they do on their gasoline.