For about a year now, the newspapers and public have been in a quandary over the cause of the astronomical gasoline prices we've been paying at the pumps here in Northern Nevada and elsewhere. I herewith divulge the cause and effect for all to know.
The cause, as cited on myriad occasions by the manufacturers of said commodity, has been the steep increase in the price of a barrel of crude oil, then the added cost of refining same. The effect has been the escalated price at the pump. However, that is not the only effect that should be taken into consideration.
On April 26, the Wall Street Journal reported a story about first quarter profits of a few of the oil/gasoline companies that own/manage/operate the various gas stations across the country. Oddly enough, Exxon reported that first quarter net profits more than doubled to $1.48 billion, a number so high, it represents or exceeds the gross national product of some entire countries. This company's revenue grew 42 percent to $55.08 billion from $38.68 billion the previous year's same quarter.
Conoco said this net income jumped to $399 million from $83 million a year ago. "The company said it was the best quarterly result in its 125-year history." Revenue rose 63 percent to $8.7 billion.
Texaco had revenues rise 57 percent to $11.27 billion, rendering triple comparable net of $574 million for the quarter. The stock price of all three companies rose accordingly. An oil analyst was quoted as saying that, "The various segments of these companies are operating on all cylinders. The earnings power of the next several years is going to be exceptionally strong."
With the oil and gas companies holding high percentage margins, irrespective of the base price of crude, it appears that you and I will be fattening their collective wallets for the foreseeable future. We can only pray that at least one of them decides to "pass along" some of the huge windfall in the form of lower pump prices.