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Posted by D. Sherman on Friday, February 22, 2008 at 12:39:58 :
In Reply to: For the record... posted by MoparNorm on Friday, February 22, 2008 at 12:14:39 :
I guess getting cheated out of $.01 on $20 worth of gas is significant, but when you paid 35.9 cents for ethyl at the high-priced station where they pumped your gas, checked your oil, washed your windshield, gave you a free map, and gave your kid a plastic dinosaur, nobody seemed to really care if that dial clicked up by an extra cent or not.
Where the oil companies are really raking in the money isn't in retailing gasoline, which has become the low-margin end of the business, it's in selling crude to refineries. If some oil company had an oil field 10 years ago that was producing oil at a well-head cost of $3/barrel, that oil field is probably still producing at pretty close to that same cost, only now they're selling that barrel of oil for $90 instead of $20. As long as they're still pumping oil out of existing, developed fields, it's like a license to print money. When some of the new discoveries come on line, which are fields that wouldn't have been economical to work at less than $50/barrel or so, their profit margins will go way down.