November 9, 2005

Oil Company Execs Apparently Responsible for High Profits But Not Lower Prices

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 5:24 pm

When I heard that oil company executives would be appearing at the Senate today, I figured there were going to receive some kind of award for getting so much of their Gulf Coast refinery capacity up and running so quickly, and for helping to stabilize markets to the point where pump prices for gasoline throughout the Midwest have gone either close to or below $2 (see Cincinnati, Columbus, Cleveland, and Indianapolis).

Or perhaps the execs were about to be congratulated on achieving such great returns for their shareholders, millions of whom are average Americans who have invested directly or indirectly through their retirement plans in the stock market.

No, they’re getting grilled about making too much money.

Dear Senators: Grow up. The oil companies have done a great job recovering from the summer hurricanes; of course, it was in their competitive self-interest to do so, but that doesn’t negate the accomplishment. Free markets work.
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UPDATE: EU Rota weighs in with the point that governments merely sit around and “siphon” off gasoline taxes that are vastly more than the “obscene” profits of the oil companies that do all the work.

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4 Comments

  1. I am curious to know how many of those Senators own stock in the oil companies.

    Comment by Wulf — November 9, 2005 @ 11:03 pm

  2. Probably more than a few, even if indirectly in an index fund.

    Comment by TBlumer — November 10, 2005 @ 12:46 am

  3. Video archive (Real Audio) of the hearing and Opening Remarks of Oil Executives. Senator Boxer’s publicity stunt (cajoling oil executives to donate their bonuses for low-income individuals) (as characterized by Senator WasteTed Stevens) is at 1:56:38 into the video.

    Comment by Porkpolis — November 10, 2005 @ 5:46 am

  4. Regarding stock investments, the Ohio Public Employee Retirement System invests in Exxon via their Large Cap Mutual Fund. I wonder what the Teacher’s Union thinks about Washington politicians desire to lower their returns on investments?

    Comment by Porkpolis — November 10, 2005 @ 5:51 am

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