On Those Oil Profits

Part of the reason for giant oil profits is that the industry itself is huge. But viewed in relative terms, oil and gas earnings are less impressive. The industry’s net profit per dollar of revenue was just under 9 cents, compared to 13 cents for the S&P 500, meaning the “markup” for the oil and gas industry is below average

Raising taxes on the production of oil will reduce its supply, causing oil and gasoline prices to rise even further. They sometimes call it a “windfall” tax, but in truth crude oil doesn’t grow on trees. It can take over a decade and hundreds of millions of dollars of investment to find and prepare an oil field for large-scale production.

If politicians are concerned about gas prices, they shouldn’t erect extra hurdles for those companies in the business of finding new supplies of oil. If the government really wants to do something, it can roll back restrictions on offshore and Alaskan drilling. Beyond that, it should just let market prices and the profit motive do their jobs.

[OR, government could easily/immediately reduce the 66 cents {in CA, all levels of government} of taxes paid per gallon currently - that's over 5x as much as the oil companies.. Oh, forgot - that's 'their' money...]

READ MORE