Mea Culpa - Oil Companies

I was riding in the car with my son Gregg awhile back and I was railing against the oil companies for raising oil prices and I said, it was, “greed.”

Gregg said that’s not true Dad. Before I had the chance to debate it and listen to his argument, the subject changed and we passed to other topics.

Gregg is a learned son with expertise in the commodities market.

I did some research and some analysis. So then, this Mea Culpa.

Hello Oil Companies…

You who….Rolland here. The blogger who keeps dumping on you for raising your oil prices…

I think I’ve been wrong and I apologize to you for my inappropriate tirade against your rising oil prices and for you not paying taxes.

Here’s why.

I read recently form sources I trust that your price gouging, your windfall profits and your not paying your fair share taxes are not fair accusations.

Between 2006 and 2010 U.S. oil companies were taxed more than all the Fortune 500 companies. Oil companies were taxed at an effect rate of 27 percent. The other big guys like GE were taxed at nine percent. Verizon and Coke at 21 percent and pharmaceutical giant Pfizer around 15 percent.

There’s more:

I learned that U.S. oil company profits per dollar of sales was six cents compared to nine cents for manufacturing companies, 17 cents for computer companies and 22 cents for beverage and tobacco.
Here are some other facts I did not factor in to my tirades.

U.S. oil companies hold a combined 3-percent of the world’s reserves. That limits them from participating in setting a global price. I also did not know that the oil industry’s ROI has lagged in the S&P listing since 1982.

Then why the fluctuations on oil prices?

Politicians!  Government needs to focus on America’s fiscal and debt situation to strengthen the dollar. If the dollar buys more oil, gas prices will decline.

Guess who needs to get down to real work instead of continually casting blame?

Congress comes to mind.