Tuesday, April 29, 2008

Oil Profits Soar

The sky-rocketing cost of oil seems to be hurting everybody but the oil refiners.

Shell and BP report record profits inthe first quarter, with a combined net income of seventeen billion dollars (US $17,000,000,000).

The high cost of crude oil is good news for oil refiners like Shell, BP, Mobil/Exxon, et al., because there is no limit to what they can charge us for petroleum. They can argue that they have not incresed their profit margin, and technically they would be correct.

Say crude oil costs fifty dollars a barrel and the refiners build in a 100% profit on the investment, then they make $50. When crude costs $100, that built-in 100% profit earns them $100.

The refiners have no intention of maintaining a respectable profit margin, they have every intention of taking advantage of the rise in crude prices to increase their own profits.

The cost of labor has not increased in the past year, the cost of real estate has not increased int he past year, the cost of refining has not increased in the past year, taxes have not increased inthe past year, only the margins of profit demanded by the oil producers and oil refiners have increased.

These same oil companies then spend money to support political candidates that drone on and on about protecting the American people (conservatives), but the candidates supported by the oil companies (conservatives) protect only one thing: oil company profits.

The only chance we have of reducing oil prices is to reduce the amount of oil we consume. We have to stop driving everywhere and start walking more, we have to turn down our air-conditioners, and turn off one of those televisions that nobody is watching. If we can lower the demand on the supply of oil, then the price will drop, too.

We must be conservative about our natural resources. And since the conservatives won't conserve, it's up to liberals and leftists to do it for them.

BP, Shell profits soar on sky-high oil prices

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