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Big Oil's enormous profits ignite suspicion of gouging
Key Excerpts from Article on Website of Denver Post
Posted: November 11th, 2006
http://www.denverpost.com/business/ci_4105814
As motorists continue to pay more at the gas pump, two of the nation's largest oil companies on Thursday reported second-quarter profits of nearly $18 billion. The huge profits come at a time when refiners are marking up wholesale gas prices to levels seen during the weeks after Hurricane Katrina, reigniting concerns about the possibility of price gouging. Exxon Mobil Corp. said Thursday that its second-quarter profits increased 36 percent to $10.36 billion, the second-largest quarterly profit ever for a U.S. publicly traded company. Royal Dutch Shell, which operates 155 gas stations in Colorado, reported earnings of $7.32 billion, up 40 percent from a year ago. Including earnings from BP and ConocoPhillips, which reported earlier this week, four of the nation's five largest oil companies netted more than $30 billion in profit during the second quarter. National gross profit margins for refiners have hovered around $21 a barrel this week, compared with about $12 a barrel a year ago. Amid outcry from lawmakers about its profits, the oil industry this week paid for advertisements in 14 newspapers - including The Denver Post, The New York Times and The Washington Post - that insist oil companies' earnings are not exorbitant. The national average price of regular unleaded gasoline is $3 a gallon this week, according to AAA. The price would be about $2.60 a gallon, factoring in taxes and transportation and other costs, if the refiners' gross profit margin had remained at the same levels from a year ago.
Note: At the bottom of this article is an excellent, revealing graph showing the extent of profit margins for oil refiners since January 2005. Very few other major media have been willing to show the hard data in this article.
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