There's a lot of hot talk these days regarding the cost of gas. Politicians are getting all worked up and demanding investigations. Even the "Free Market" GOP is making a show and vowing to investigate price gouging. The oil industry says it's not their fault. This is simply the result of supply and demand and we're all at the whim of the market. Bullshit. There's a very simple way the oil companies can reduce gas prices: reduce their profit margin.
If you believe guys like John Felmy, chief economist for the American Petroleum Institute, the oil industry has no control over rising gas prices. "The reasons for high gasoline prices are very clear: the high cost of crude and the high cost of manufacturing gasoline," said Felmy. He says the image of oil companies shaking down the American consumer is just an unfortunate misunderstanding. And he says it all with a straight face.
We're but a week from reports of Exxon's CEO, Lee Raymond, hauling in a $150 million retirement payout. That's a lot of cash to regular folks like you and me, but don't think for a moment Raymond had ANY say over that compensation package. Perish the thought. Raymond claims to have never even negotiated his salary ever in his career. No, this King's ransom was foisted on him by the Powers That Be at Exxon, nevermind that HE was the Executive Power That Was.
Just the same, Raymond says his payout was reward for Exxon's success in recent years. And who can argue with that? The company posted a $7.61 billion profit in the second quarter of 2005, which was a 32% rise in profits. But that wasn't even a record quarter. It was their THIRD highest quarter. Additionally, Exxon's refining and marketing profit rose 34 percent, to $2.02 billion. So their profit rose by a third on the area that gets mentioned most as the cause for high gas prices: refining.
It's hard to feel bad for these guys who claim at every turn to be victims of circumstance, isn't it? Am I heartless? I don't know, but it seems to me that Exxon, et al., could do their part as good corporate American citizens by trimming their profit margin a hair and maybe cutting back the CEO payouts by a few million bucks or so. There's nothing wrong with making a little money for providing a service but at what pint to start to feel like your just shafting your neighbors?