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Mike’s Musings: Big Oil… Soaking our Savings

Those of us who use more than a tank of gas on a weekly basis, have felt the doubling of gas prices in our pocketbook. What use to be a $40 fill-up is now $80 and if you own a diesel truck, it is much worse.
Some of us have taken our angst out on local service station owners. However, our local small business owners don’t set gas prices. Heck they only make a penny or two per gallon, whether the price is $2 a gallon or $5 a gallon. They make their money on soda and candy bars, not gas.
Others point to President Biden as the culprit. It is true he halted construction on pipelines and has frozen the leasing of oil drilling rights on federal land. It is also true his administration has championed electric vehicles at every turn to encourage drivers to purchase electric vehicles instead of those that run on gas.
I certainly believe the Administration could encourage drilling on US soil and return us to energy independence instead of dependence on others. I believe that would bring down inflation immediately. I really don’t understand why they won’t.
But there is another culprit for this much ballyhooed blame game. I point directly at oil companies. While we struggle to pay for gas, food and other necessities, oil companies are swimming in record profits.
Just last week Exxon Mobil, based in Irving, Texas announced an unprecedented $17.85 billion profit for the second quarter. Chevron made a record $11.62 billion for the quarter and UK Shell shattered its own profit record.
I about fell over in my chair when I saw these quarterly profit numbers. I had a suspicion someone was making out as the price per gallon soared, but never in my wildest dreams did I think the oil companies would be recording record high profits as we peons were drowning in debt.
In Great Britain, lawmakers passed a 25% profit windfall tax on big oil. Total, headquartered there, expects to pay a $500 million tax next quarter. That’s all fine and dandy, but the tax goes to the government and not to the people that are suffering.
France has a better idea, and that is they have asked local gas stations through their suppliers to reduce prices at the pump. Essentially rather than a profit tax, France has asked big oil to reduce their pricing to distributors who then are asked to reduce their prices to the local gas station owners.
This approach reduces the profit of big oil, but helps drivers like you and I. No company, in my opinion needs to make the record profits big oil is now enjoying at the expense of regular consumers. They need to spread those profits around. But then again, our state and federal arms of government are also making more than their fair share on gas profits. Shouldn’t they too be rebating taxes they get every time we pump gas?
We expect big government to be greedy. I as well as others have asked both state legislatures and the federal government to suspend the taxes they impose on gas prices. For the most part they have refused.
Oil companies are enjoying huge profits recently because the demand for oil and gas has increased greatly since the pandemic. Additionally the Ukrainian-Russian War has reduced the flow of Russian oil which has put a small dent in worldwide supply. Those factors have allowed big oil to charge more and as a result, screw ordinary drivers. Hopefully they will find it in their corporate souls to share the billions they make every 90 days.

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