Automobile Retailers

Last time we explored who was profiting from the rising oil prices and discovered that shareholders and top businesses are turning in significant profit from the commodities markets. The mythology of oil companies not turning in profits and suffering is often tossed around to make individuals paying high prices at the pump think that the rise of crude oil prices is simply necessary and unavoidable. This couldn’t be further from the truth. Not only are oil companies turning in record profits, but the rising costs at the pump aren’t looking to come down anytime soon.

Take ExxonMobil for instance. The U.S. company turned in $40.6 billion in profits (that’s in profits, not overall) in 2007. That’s about $1,300 of profit for every second of the year. Royal Dutch Shell made a smaller but still astronomical $31 billion in the same year. Are the oil companies really suffering in the United States because of rising fuel prices? The notion that rising crude prices isn’t going to generate profit for oil companies is a silly one, but some people will believe just about anything.

So what is the story from the side of the oil companies? How do they get so many people believing their narrative that they’re suffering and that our rising gas prices have nothing to do with their desire for more profit?

Last Wednesday, oil company execs stuck to their guns in front of the U.S. Senate Judiciary Committee. They blamed government for not allowing more drilling for oil and said that global supply-and-demand was beyond their control.

The first notion of a lack of drilling seems apparent to anyone with a concern for environmental issues. Oil companies want to drill in Alaska, the forgotten state, and want to rip through the already melting ice to find precious black gold beneath. The second notion of supply-and-demand isn’t as “global” as American oil execs would have you believe, as the majority of global citizens, when asked, would prefer other sources of energy. It’s as though oil companies are hold our faces in the black stuff and begging us to get hooked on it like cigarettes.

On this framework, it’s important to learn what has happened with oil prices and what has caused this obvious addiction to oil to spiral so far out of control. Next time we’ll be looking back to 1973 at the oil crisis and we’ll explore Hubbert’s Peak Oil theory and the impact that has on today’s markets and costs.

For the time being, consumers can still fight back against oil companies by driving less and by driving responsible vehicles like hybrids and like Toyota’s Scion. In producing the Scion, Toyota joins the rest of the world in being more progressive on this important issue. Stop lining the pockets of oil execs and drive a money-saving Scion instead.

Yesterday, we discussed two of the main factors of today’s gas prices – the price of crude oil and the falling dollar. Today, we’ll discuss some of the miscellaneous factors that account for the remaining percentage of the price per gallon.

Demand
The demand for gasoline plays a pivotal role in the price per gallon, too. With the added number of cars throughout China and India, there’s an increased demand all over the world. Those two nations have literally added millions of new vehicles to the roadways in recent years. Of course, demand works the other way, too. When there is less demand, prices typically drop. However, that takes awhile to happen. So if you’re thinking that Americans should just take a week off from buying gas, that’s not enough to bring the prices down.

Refineries
The number of refineries that we can use contributes to the price of gasoline. When Hurricane Katrina happened, the price of gas went up because many refineries were knocked out of commission. But the efficiency of the current refineries also affects the prices. The more efficient they are, the less money you pay at the pump.

Local and Federal Taxes
Now we come to the taxes. In addition to the federal tax of about 20 cents per gallon, there are also local taxes that influence the prices at the pump. That’s one reason why California prices are typically much higher than the average prices across the country.

Before we vilify the “big bad” oil companies, let’s take a look at all the reasons are gas prices are so high. But if those high prices are too rich for your blood, check out the latest fuel-efficient vehicles at your local Pontiac dealer . Visit one today and start saving your gas money the minute you drive off the lot!