Maybe because of the production of polyester is a more complex than
gas and the oil price has less effect?
Anyway, without going into details of the earnings of oil companies
it is a fact that Norway is making lots of money these days because
of the price of crude oil, both through the state owned oil company
and through tax on oil production. I can´t see why this should be
very different for the oil companies who is pumping the oil up from
the ground as long as the tax is the same (which it is).
On the other hand, and back to one earlier question: Why should
anyone in this international marked reduce the prices in one region
for pure kindness? Crude oil goes to the highest bidder, and the
costs of the resulting products will increase according to the part
of the production costs that the crude oil price represents. It´s a
free market and they have enough buyers.
The only way to change that is to develop other solutions making us
independent of oil, but I´m afraid the oil price will have to be a
lot higher for that to happen.
DagT
Den 30. apr. 2006 kl. 13.03 skrev graywolf:
That would be so if... If gasoline was the only product they got
from a barrel of crude. If they had no tax deductions before
reporting those profits. If...
It is pretty much the way the Rolex Watches Company is. They give
"ALL" their profits to charity (legally true). However the are
family owned and family members hold all the board of directors
seats and the board of directors are paid extremely well. Of course
profits are what is left after the BOD is paid. Great publicity and
it does not cost the owners a thing out of their pockets.
Profits are what is left after you figure in every legally possible
deduction. It is good business to leave that figure at a level that
will attract investors, but no higher. But any good accountant will
tell you that number is very adjustable as long as the business in
actually (as opposed to legally) operating in the black.
Many people seem to have a very simplistic idea of economics. If
the price of crude goes up 10% the price of a pair of polyester
slacks does not triple in a few days. Why not? They are made out of
that same crude oil.
graywolf
http://www.graywolfphoto.com
http://webpages.charter.net/graywolf
"Idiot Proof" <==> "Expert Proof"
-----------------------------------
William Robb wrote:
----- Original Message ----- From: "Shel Belinkoff"
Subject: Re: Local Gas Prices
Gallons of gas sold is only a part of such a company's profit
picture.
Profits are generated from other areas as well, including
investments and
refining. Almost 1/4 of their profits came from refining. For
example,
when they bought or contracted for crude @ $40.00 per barrel, and
the price
jumped to $60.00 per barrel, they did quite well. However, Exxon/
Mobile
did not control the price of crude - they just benefited from it.
According to a report I heard Wednesday or Thursday, the
percentage of
profit made by Exxon/Mobile was about 7%, similar to the profit
percentages
of many other businesses. While I'm not being an apologist for
the oil
companies, their return on investment and profits - from a
percentage
standpoint - doesn't seem excessive. Actually, there are many
companies in
many other fields that generate larger profits in terms of
percentage.
Someone was making a simplistic statement about how much money
they made, I was asking a simplistic question about how much
product they sold to make that money. I asked because if you break
it down to dollars made vs. gallons sold you will find that they
don't have much margin to lower the price per gallon, which was
intimated by another poster.
Your reply confirms what I was implying.
William Robb
