Rising Crude Oil Prices Do Not Equate to Rising Profits!

We are in the middle of witnessing the largest robbery of the century. Crude oil prices are always going to rise and fall, but passing those fluctuating costs on to consumers shouldn’t increase a company’s profits.

A street vendor sells hotdogs for $1.50 and it costs him 50 cents per link to buy his daily supply of hotdogs. Now let’s say for some reason the overall price of hotdog links goes up to 60 cents per link. If the vendor wanted to maintain his profits he would need to raise his selling price to $1.60 to cover his increased costs. He would do this because he knows other vendors will also have to raise their prices or lose profits.

Now what if there were only three other vendors in town and they got together on the down low and decided they wanted more money. As long as they all agreed to not start underselling each other they could slowly raise their prices to $2.50 per hotdog even though the operating costs only rose a little bit.

This is essentially what the oil companies have done. For every 10 cents crude oil goes up they raise prices by some multiple of 10, but never just the 10 extra cents it cost them.

In 2004 Exxon-Mobil’s profit increased 218% to

25.3 BILLION DOLLARS.

In 2005 Exxon-Mobil’s profit increased again over 30% to

36.1 BILLION DOLLARS.

(Click hyper links to view supporting articles)

Now remember we are talking about profit not earnings. They took home over 36 billion after costs and expenses including Katrina.

We’re being robbed and no one’s calling the cops.