Gas Prices High On Purpose

Many weeks ago I received an e-mail that suggested a one day boycott of gasoline purchases, exempting emergencies of course. I deleted the e-mail. I did so because I knew that the outcome would be nothing. I knew this for two reasons. First and foremost since many people depend on their vehicles to go to work or to do work, even IF they were to not purchase gas as usual the monday (or whatever day it was), they would be right back on Tuesday and therefore the total economic cost to the gas station would be zed. Nothing. Secondly, the gas stations are generally the low man on the totem pole. Yes there are price gougers out there but by and large the gas station has very little influence on the actual cost of gasoline at the pump. Fact is they already paid for the gasoline, so the providers of the gasoline already got paid, will get paid again and won't even feel the one day boycott.

Instead I have oft said that the best means for citizens to send a message to the oil companies is to pick a single outlet, Exxon for example and simply not purchase gasoline from them at all. I call this the Texaco effect. For those who don't remember, Texaco executives were exposed for the racist bums they were and as a result people avoided Texaco gas stations like the plague. As a result, of the event the local Texaco by my residence went under and was replaced by one of it's "competitors". So my thinking here was that if consumers put the target on the back of a company such as Exxon, all exxon franchises, nationwide would be threatened with going out of business and since the whole oil industry is one big cartel anyway, there would HAVE to be a change in policy in order to save that company AND the jobs that would be lost by it going under. The problem is that Americans are simply too lazy to do stuff like that. So I will assume I'm the only person who has an ongoing boycott of Exxon-Mobile, BP and Shell.

So today in the NY Times, we get a report that states flat out that the so called "shortage" of gasoline is no accident. In a totally misleadingly titled article Oil Industry Says Biofuel Push May Hurt at Pump, The oil executives said what is known by now by anyone paying attention:

In his State of the Union address in January, President Bush called for a sharp increase in the use of biofuels, along with some improvement in automobile fuel efficiency to reduce America’s use of gasoline by 20 percent within 10 years. Congress is considering legislation calling for a nearly fivefold increase in the use of ethanol.

That has forced many oil companies to reconsider or scale back their plans for constructing new refinery capacity.

In hearings before Congress last year, oil executives outlined plans to increase fuel production by expanding existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical and Refiners Association.

Did you get that? companies are "reconsidering or scaling back" plans for new refinery capacity? reconsidering? I would have bought the argument if they said that the announcement devalued the current construction of refineries. But no, the plans for increased capacity were scaled back? Why is there planning? going on? What these executives want you and I to believe is that they do not have any research departments that foresee and project consumption based on different market indicators. They want you and I to believe that they had no clue that gasoline consumption would not increase. Got that? These multi-billion dollar companies with record profits know less than you and I about gasoline consumption forecasting.

Even worse is that by their statement it takes 5 years to increase capacity by 1.6 million barrels a day. Which means had they had intended to meet forecast demand without the huge increase in prices (enough of this silly inflation adjusted crap, ask someone who's making 30 grand a year or less if inflation adjusted $1.45 price means squat when filling up is 30 bucks a pop), they had to have started at 2002. 2002 folks.

Now read this:

Refineries are a choke point in the nation’s supply of fuel. Because they have not invested enough in refineries to increase gasoline supplies, oil companies have been unable to meet the country’s growing demand in recent years. That has forced them to rely on imports, which are more expensive than fuel refined domestically.

More expensive why? Well if we've been paying attention to the news coming out of say Venezuela, then we know that not only do the oil companies own the domestic refineries they are usually the majority stakeholders in the drilling and refineries abroad. In other words, these oil execs are complaining about purchasing import oil that they already own! This is some real racket we have going on here.

More:

Until the mid-1990s, the United States had significant spare refining capacity. But because of consolidation in the industry, the number of refineries declined while unprofitable operations were shut. As demand grew, however, and capacity remained flat, the picture changed. In recent years, refineries in the United States have been running at or close to full capacity.

Get it. back in the mid 90's you could purchase a gallon of regular unleaded for 99c. I remember 5 bucks giving 5 gallons. But most important to this post is the admitting that the oil industry is "consolidated" which is another word for "monopoly" or "cartel". They admit that refineries were shut down for not being profitable.

Well thanks to Google we can find out just how "unprofitable" $1 gas was:

Gas prices boost Exxon, Shell profits

IRVING (AP) - Higher natural gas and crude prices helped Exxon Corp. and Shell Oil Co. increase profits by about 50 percent in the final three months of the year.

Exxon, the nation's largest oil company, reported Tuesday that net income was $2.49 billion, or $2 a share, on revenue of $37.62 billion in the fourth quarter. That's an increase of 49 percent over the $1.68 billion, or $1.35 per share, on revenue of $31.5 billion in the same quarter in 1995.

For the full year, Exxon reported net income of $7.51 billion, or $6.02 per share, on revenues of $134.36 billion. In 1995, the company earned $6.5 billion, or $5.18 per share, on revenues of $124 billion.

Exxon stock rose 87.5 cents to $103.37« per share on the New York Stock Exchange Tuesday morning.

Unprofitable? Really? Not good enough for you? Check this out:

For Shell and for the industry, analysts said they expected profits to rise on increasing demand for petroleum products now that all major industrialized regions are in a recovery. Many analysts predicted crude oil prices would average around $18 a barrel this year, up from just under $17 last year. In the chemicals sector, the turnaround will be even more dramatic, with some analysts predicting triple-digit percentage gains in profits for 1995.

I mean what are these oil companies taking us for? Complete idiots? Yes. Yes they are. We, sorry, y'all elect people who don't have the stones to put the brakes on these oil companies. Y'all put people in officer who work(ed) for Oil companies. Ya'll let the US Government get taken over by corporate lobbies and have turned public office into the place that goes to the highest bidder. So don't be shocked when not even the vaunted NY Times can't do basic research and challenge to Oil industry line.

Plainly put the gas prices are what they are because the Oil companies want it that way. If there are capacity issues it is quite intentional and they have admitted as such. So until the consumer puts one or more of these companies into the ground by simply not purchasing refined gasoline from them, we, the consumer will continue to be reaching for the soap on the ground.

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