After weeks of oil execs defending themselves on TV against charges of "excessive profits" by saying, "We only make 8 cents for every dollar. We're just average", here's some contrary information for thought. I just heard this same info mentioned on an NPR broadcast yesterday so I guess the word is getting out.

Check out the reports which can be download from this and this webpage. It's certainly more intellectually credible than this simplistic profit margin argument that the American Petroleum Institute has all the oil execs repeating over and over. Think about it--how useful is it to compare profit margins across completely different industries? It's hard enough to justify comparing two similar companies with similar products this way. General Motors vs. Ferrari? Ferrari vs Yahoo? Yahoo vs some fresh start up company? So who's making a "fair" profit margin and who's making "excessive" profits? It's just the wrong statistic and a smokescreen to avoid seriously addressing the question on people's minds--are gasoline prices rising more than increases in crude oil prices justify? Read the reports. Even if you don't think we're getting gouged, you'll learn important information about how the refining business works, at least in California.

With Americans buying 320 million gallons of gasoline a day, even a fraction of a penny difference in profit margin adds up to a tidy extra profit. And most Big Oil companies make most of their money selling crude oil, not gasoline anyway. Mr. Oil Exec, what's your company's profit margin on a barrel of crude when it goes from $35 to $71 in a short time?

And I agree with Blast, it's really our consumption that is causing us a world of hurt, not only at the pump, but at the expense of the environment, in our foreign policy, etc.