The reason they bring in so much revenue is that gasoline is one of the most consumed products in the U.S. They would naturally bring in a lot of profits, but the question is, are they taking advantage of consumers? The answer by far, is no. In fact, they are giving us one of the better deals of any other company in the country. They’re definitely giving us a better deal than citizens are receiving from other countries around the world.
Let me compare the oil companies to companies that produce bottled water such as the manufactures of Coke (Dasani), and Pepsi (Aquafina). Oil companies have way more expenses when it comes to the salaries they must pay because they have many engineers and scientists on their payrolls. Even men and women who work on oil platforms and in refineries make much more than an average citizen. Identifying where oil is, building a massive platform on the ocean, and then drilling for oil, is a huge and expensive undertaking. Then they must move the oil from the platforms to oil tankers that take the oil to various ports. From there it is moved to oil refineries where several products are made such as gasoline and resin for plastics. Then all these products are shipped around the country.
There’s a tremendous amount of expense to accomplishing the above and at the end of the day, oil companies only make around a 6% profit margin which is close to half of what many companies make in this country. For example, cable companies make around a 25% margin, tobacco around 31%, and software companies around 19%. Facebook’s profit margin is 39%. Could you imagine if these companies provided us with fuel based on their operating margins? We'd have to ride a bike to work.
Now let’s look at bottled water companies like Coke (Dasani), and Pepsi (Aquafina). All they need is a water supply that they sometimes own and sometimes lease. This water is directly pumped or transported to facilities that process the water to remove impurities. The water is bottled then placed on trucks and sent to distribution centers. This process isn’t at all as complicated or expensive as what it takes to bring gasoline to consumers.
Even though the process of bottling water is so much less expensive than processing oil, these bottled water companies make around 14% in profits, more than twice the profit margin as oil companies. In my world, gas is around $2.39 a gallon. This means that based on the profit margins bottled water companies receive, if they produced gasoline for us, the price would be around $5.58 per gallon. Now whose gouging consumers?
If it weren’t for the productivity of oil companies in the U.S., efficiency of their operations, and low profit margins, we’d be paying $10 a gallon like countries in Europe. Politicians don’t want people to know the true story behind oil companies because it’s so easy to attack them and they can act like they’re David taking on Goliath. Why aren’t they going after companies like Coca Cola and Pepsico for gouging consumers? They are picking and choosing where to place their rage based on politics.
The bottom-line is don’t fall victim to the games politicians are playing. “Big,” oil companies aren’t evil. They don’t deserve to be attacked and instead should be receiving a thank you note from us because without them, we’d be spending at least $200 more per month on gasoline. I don’t know about you, but I have better things to spend my money on.