Quote:
Originally Posted by shah269
Hold on a sec, ok the pirce of crude went up? Ok then so did the price of gas? Ok makes sense. A more expensive raw ingreadent equals a more expensive final product. That I'll buy.
But record profits? That would only jive if the price of curde were low and the price of gas were high, thus providing greater return on invested raw product.
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What I'm saying is it has nothing to do with the man in the white house. If anything it has to do with subsidiaries that might be handed out bo congress. That has nothing to do with operating income, which is what income statements show. Income statements show income, not assets or subsidiaries. The report had nothing to do with those.
For the record, I have no idea how much money was given in subsidiaries to Exxon, if any.
Oil companies take a percentage of the price you pay at the pump. The price you pay at the pump is always proportionate to the price of crude oil. The actual gas station takes between 1-2 percent, the federal government takes approximately 14 % on top of that for road repairs, assuming vehicles with more gas consumption cause more damage to roads, therefore penalizing (usually) larger heavier cars. There is an additional tax on diesel because it's used commercially more. I'm not exactly sure how much percentage the refinery process gets, or transportation on barges, trucks or pipelines get.
The price you pay at the pump is divided up by percentages for everybody that is involved in the steps. From who we purchase crude oil from, to the transportation on bargs, to the refinery, to the shipping to local distribution centers on trucks, to the oil pipelines and so on. Since the oil companies earn a percentage of the overall gas sold, they earn more when the price is higher. 1% of $4 is twice as high as 1% of $2. Exxon is the largest oil company, thus it's obvious why they earned more during the years that crude oil and gas prices were at a record high.
What I'm saying is you have to consider the profit margin of the company, and you have to consider the amounts reinvested into the company as opposed to handed out as salaries and bonuses. Exxon has a very high reinvestment rate and is contributing much more than people realize to new technologies.