"BIG OIL" companies....................

Let's say that you're selling a widget for $10
(cost of widget= $9.00) This cost includes the cost of the raw materials, equipment, facilities, and employees used to manufacture
the widget.


You're making a 10% profit.

Your profit is $1.00. Your profit margin is 10%.

Now let's say that your costs go up by $9 a widget

This increase could happen due to increase of raw materials, equipment, and facilities. Maybe you have a rogue Union that has established it’s self with your employees and labor cost have gone through the roof, can you say Ford, or GM. Maybe it’s a combination of all the factors.

(new cost of widgets = $18.00)

So, you double the price at the widget store. Now widgets are selling for $20.

Your costs are $18 per widget, so you're making $2.00 on every sale.

Your profit has doubled to $2.00 per widget, but your profit margin is still 10%.

You're still making the same profit on every dollar that you invest in your business, but your profits have doubled.

Let’s replace the widgets with barrels of oil, hmmm…….., see where I am going with this. The “Big Oil” companies have been taking a lot of flack from Elected Representatives, mostly Democrats- but there are a few dumbass Republicans in the bunch, concerning the record profits they are making from the refining of oil. They are being accused of price racketeering and gouging, you name it, the “Big Oil” companies are guilty of it. As you can see above record profits do not mean your profit margins are going up, nor do record profits indicate you are screwing the consumer.

Here are some Facts:

1. The “Big Oil” companies do not set the price on a barrel of oil

2. The “Big Oil” companies adjust to the fluctuating cost of a barrel of oil almost on a daily basis. They refine it into numerous formulas, all grades of gas, low, mid , and high octane, plus diesel fuels are formulated from the same barrels of oil. The “Big Oil” companies attempt to meet America’s demand for fuel in spite of the fact that there is more demand than there was 30 years ago but no appreciable increase in refining capacity(There has not been a new refinery built in America within the last 30 years)

3. Anyone that spouts rhetoric about how the “Big Oil” companies are scalping the consumers without mentioning profit margins- is a fuckin’ idiot- or they think you are a fuckin’ idiot. Class dismissed.

Later’