Most idiotic story on gas prices EVER on ABC.

[BlooInBloo]

They broke down by % the costs of a gallon of gas - extracting, refining, transporting, taxes, yadayadayada. Then they asked "what about profits?" - they're making *** 29% *** profits!! And they just gave they're CEO a $500 million retirement.


Oh yah - the idiot part: the phrase "price gouging" did not come up ONCE in the 5 minute story.

Evil bastards.

Corporate media indeed.

:puke: :mad: :puke: :mad: :puke: :mad: :puke: :mad:

[paul_fromatlanta]

1. 29% gross margin? That not really high for retail

The problem is how much we buy.

[Township75]

7. Exactly!

The problem is how much we, and now the rest of the world, buy.

The only way we are going to buy less is if the price gets ridiculous.

[BlooInBloo]

15. What do retail goods have to do with anything? Oil/gas is a commodity.

[paul_fromatlanta]

20. We are comparing the profit contained in the retail price at the pump

That includes profit for the refiner, the distributer and the retailer. 29% isn't more than is contained in most retail products.

If you want to look at commodity markup you need to look at the profit contained in the Rack price -which will be only half as much profit on average (about 14% according to the latest senate study I could find.)

Now you can argue 14% is too much profit but that's the number we need to talk about if we want to talk commodity profits.

http://72.14.203.104/search?q=cache:J6-1aIMGq7EJ:www.senate.gov/~gov_affairs/042902gasreport/sectionv.pdf++gasoline+rack+price&hl=en&gl=us&ct=clnk&cd=8

[cantstandbush]

24. But it's a lie. How does that square with "record profits?" n/t

[RoyGBiv]

26. This is not retail ...

Yes, the problem is how much we buy, but the 29% figure is not the retail profit margin.

Retail profit margin is far lower than 29%. Actually, the price at the pump is typically not even calculated in terms of a percentage rather a standard, flat "cents per gallon" markup, and this changes depending on local market conditions. Some retail centers, typically independently owned convenience stores, barely make enough to pay what it costs to pump the gas, pay the various fees, and pay labor.

[unblock]

2. 29% profit for a commodity. yeah, we've got a functioning marketplace

ask any economist what the expected return for any commodity should be....

[shenmue]

3. Half a b---

Billion dollars? Did you say billion? Retirement?

When the mob does that, it's called racketeering...

[paul_fromatlanta]

4. Here are some number to work with

http://www.energy.ca.gov/gasoline/margins/index.html


Distribution Costs $0.03 $0.04 $0.02 $0.04 $0.05 $0.01
Crude Oil Cost $1.43 $1.42 $1.39 $1.48 $1.54 $1.59
Refinery Cost and Profits $0.47 $0.52 $0.66 $0.58 $0.59 $0.63
State and Local Sales Tax $0.18 $0.19 $0.20 $0.20 $0.20 $0.21
State Excise Tax $0.18 $0.18 $0.18 $0.18 $0.18 $0.18
Federal Excise Tax $0.18 $0.18 $0.18 $0.18 $0.18 $0.18
Retail prices $2.48 $2.53 $2.64 $2.67 $2.74 $2.81

[muriel_volestrangler]

46. Interesting - it looks like the refineries increase their prices each year

at about this time. It's now about 30 cents more than the beginning of the year. I suppose that could be partly due to less heating oil being needed now winter has ended, so that gasoline becomes the 'in demand' fraction of crude oil, but looking at this graphic, the amount of oil used for heating rather than transportation is fairly small, so this does look rather like "we put up American prices because we can".

[Coastie for Truth]

5. Look up "cartelization"

[Chomp]

6. Well ok,

but here is a more pressing point:

Americans need to drive smaller cars, and drive them less often.

[valerief]

8. Hey, I have an idea. What about effective, efficient public transportation

systems? Nah, might have to raise billionaires' taxes for that.

[Jigarotta]

21. and we need to cook our hamburger well

so as not to kill our kids and elderly with hamburger disease.
it's always our fault.

[CatWoman]

9. uh huh

http://www.nytimes.com/2006/04/15/business/15pay.html?ex=1302753600&en=89993dc20e1e7e97&ei=5090&partner=rssuserland&emc=rss

[PetraPooh]

10. Wages and CEO packages come out before profits are recorded, duh.

That 29% would be hugely different if the executives were gouging the companies.

[paul_fromatlanta]

11. The annual CEO compensation is about 1/10 of 1% of the profit

And a good CEO probably makes several times that much difference in profit for the shareholders so you can see why they pay him that much.

Where the shareholders get a bum deal is huge payouts when the company is losing money.

[PetraPooh]

12. So you're saying that the CEO $500 Mil added with the compensation

of the other executives is ONLY 1/10th of 1%. I am not fully in the know but somehow I doubt this is the case in these oil companies right now. But I would be interested in seeing my opinion proved wrong.

[paul_fromatlanta]

16. I was talking about his annual compensation - this retirement package

sounds excessive. But since he reversed a sharp decline in company value and added $100 billion to company market cap stockholders may not complain.

[Eric J in MN]

29. He brilliantly decided to raise gas prices.

No one else could have thought of it.

He deserves that half-a-billion (sarcasm).

[paul_fromatlanta]

30. CEOS get rewarded or punished all the time for market forces...

Look at Internet CEOs.

[Eric J in MN]

31. Market forces determine if they retire with $100 million or $200 million?

Huge disparities of wealth are inconsistent with democracy.

Concentrate too much wealth, and the result is rule-of-the-rich instead of rule-of-the-people.

If it were up to me, we'd have a 100% tax rate on income above a million/year.

[paul_fromatlanta]

32. The tried 95% in the U.K - it caused a massive recession

as the people had no incentive to be productive once they made a certain amount.

[Eric J in MN]

33. The UK has a huge sales tax, called the VAT.

That causes recessions by discouraging consumption by ordinary people.

Not taxes on people paid absurd salaries.

[paul_fromatlanta]

43. right but before that they had a 95% income tax for rich people

The beatles did a song about it The Tax Man.

" Let me tell you how it will be There one for you, nin'teen for me"

[tsuki]

44. Punished, yeah, like Kenny-Boy Lay was punished. A 50 million

dollar paycheck the year Enron folded. Some punishment.

[Jayhawk Lib]

18. The CEO answers to the

board of directors. The directors are elected by the stockholders. The stockholders with the greatest number of shares, the ones who have the most to gain or lose, has the most votes.

It is the board of directors, the ones voted in by the share holders, that determines the CEO's compensation. If you do not like what the CEO makes, take it up with the stock holders.

[paul_fromatlanta]

19. "If you do not like what the CEO makes, take it up with the stock holders"

I agree. Thats how capitalism works. And capitalism is the worst system of economics in the world except for all the others.

[Eric J in MN]

28. There is no vote in which everyone who owns stock in Exxon

gets to choose the executive compensation board.

CEOs of Fortune 500 companies sit on each other's compensation boards and divvy up the profits.

[Jayhawk Lib]

34. The stockholders elect

the board of directors. It doesn't matter what the directors other job is they are still elected by the stock holders. In essence it is the stock holders that determine CEO pay. The stock holders with the most shares, the ones who could lose or gain the most, get the most votes.

[Eric J in MN]

35. And the board of directors appoint CEOs of other companies

to the executive compensation boards, and they say that since every other big company is paying CEOs millions, ours should, too.

[INdemo]

13. Lets face it Bush could have stopped this price gouging two

years ago but his buddies and big campaign contributors wanted their pay back and they got it..John Kennedy was faced with the same delima with the steel companies and price increases and he put a stop to in a hurry and it didn't take any price controls..The Repubs could have passed a windfall profit tax bill (like the Democrats wanted) but no according to Repubs this would have hindered production and refining.......Its bull shit..Not only are these rich buddies of his making money from speculating crude oil but also unleaded gas futures..Insider trading at its best (or worst) which ever .....

[Chico Man]

14. Higher Prices will drive innovation

It's the only way we will see a reliable alternative emerge in the marketplace.

Above all, the laws of supply and demand still rule.

[BlooInBloo]

17. Just what this country needs. Another laissez-faire economist.

[DBoon]

23. Yes people will innovate by not taking vacations

or spending less on groceries to pay for gas for their commute.

(Now a slow, long term, predictable increase in gas prices might drive conservation, but a sudden jump just takes money out of consumers pockets.)

[Chico Man]

39. The supply side feels the crunch as well

There are many corporations out there trying to blance a demand for higher wages with the rise of prices due to increased fuel prices. Not all corporations are experiencing windfall profits.

I cannot ignore the positive impacts that higher gas prices will have on many facets of our society. If it cuts into peoples vacation time in the short run, oh well. In the long run they will demand higher wages or decrease consumption if they really want that vacation.

[DBoon]

40. but as the great economist Keynes said

"In the long run we shall all be dead"

[bigtree]

36. who feels the corrective effect of those higher prices?

not the industry. The people suffer while the industry benefits, unless we tax gas and oil royalties and apply the money to the implemntation and development of realistic alternatives which would offset or replace the fossil fuels.

Laws of supply and demand crush consumers. This is not a luxury market. Fuel means survival to many.

[Chico Man]

37. This is exactly why the first to offer a reliable alternative

Will become very, very rich.

Money motivates, and there is no such thing as a free lunch.

Gas prices are still insanely low compared to the rest of the world.

[bigtree]

42. that alternative will have to be supported and defended

with a solid commitment of dollars. It has to be real and comprehensive. Piecemeal is fine, progress is good, but there's no substitute for commited national policy that is determined to finally move away from fossil fuels.

[DBoon]

22. Then why was gas selling for more than 29% less recently

Did the costs of extracting, refining, transporting, etc. just suddenly balloon?

[no name no slogan]

25. Lemmee guess: John Stossel is behind this

He's a true People's Champion, standing up for big bad corporate executives against the unwashed masses.

*sigh* he's my HERO :eyes:

[BlooInBloo]

27. ROFL!! I didn't see him....

... but that don't mean he wasn't behind the scenes...

[spanone]

38. .

[gizmo1979]

41. The best part of the story

was the young lady who said the high gas prices were forcing her not to order dessert at the restaurant.Poor poor girl.

[0007]

45. Don't ya just love Democracy? yak yak yak yak yak yak

By the time anyone gets around doing anything. More people have joined the poverty ranks, if not died because of no money for health care. The rich have gotten richer. And the soccer mon's still drives like hell in the big SUVs.

And the gansters are still in charge