Simple Question

From WRAL:

Political Parties Divided On Gas Price Solution

POSTED: 5:15 pm EST February 1, 2006

RALEIGH, N.C. -- Is the real problem a few pennies extra at the gas pump or a record $36 billion in profits made by a petroleum giant?

I did not even have to read the rest of the article.


But how else . . .

are we going to build all those roads in Los Angeles if we don't have more taxes?

I know, let's ask Exxon Mobil to build and operate all the roads! That's what I'd call a true market-based solution.

Then we could get Coke to take over all the public water utilities! And school lunch programs!

And Lockheed to take over the Army and Air Force!

And Art Pope to take over all the North Carolina media! (Oh wait. That's already a done deal. Right Ricky?)

Gotta love those free markets!

$ or %

exxon is a huge company. those profit figures are a product of huge revenues. i don't think that their profit percentages are that out of whack for their revenues. it's like comparing wal-mart's profits to the local minimart. some minimarts are more profitable than wal-mart (return on investment), but we don't ask them to cough up their profits as excess.

(p.s. i'm not a neocon by the way)

I think it's the revenues that are in question

You may be right about the margins, but how do you explain the astounding year-over-year jump? It's certainly not from strategic cost reduction or performance improvements. It's from a dramatic jump in gross revenues . . . which seems to be obviously linked to pricing increases.

The Question

The question was what had a bigger effect on the rise in prices.

Also, we have laws on the books to deal with monopolies and cartels gouging consumers. This is because we feel that it is improper to gain that kind of pricing power through size alone. With the mini-mart, their margins will be reduced naturally through competition. One reason why the gas industry is different is that there are many barriers to entry into the business.