Oil Industry Execs Interrogated November 10, 2005
From a Philly.com article (registration required)
"My constituents, and actually most Americans, think that somebody rigs these prices. That in the process, somebody's getting ripped off, and they think it's them," said Energy Committee Chairman Pete Dominici (R., N.M.), setting the stage for the nearly four-hour grilling.
"The Senate Energy and Commerce committees called in five oil-industry captains to explain their combined third-quarter profit of $32.8 billion and what are expected to be industrywide annual profits approaching $100 billion. Those profits came from American consumers who paid more than $3 a gallon for gasoline this fall and face record home-heating costs this winter."
And their defense...
"Hoping to fend off a potential windfall-profits tax, leaders of the five major U.S. oil companies denied before two Senate committees yesterday that they gouged consumers while earning recent record profits."
"One by one, the executives recounted how hurricanes disrupted oil production and pipeline activity in the Gulf of Mexico and damaged oil refineries along the Gulf Coast. And they noted that even before Hurricanes Katrina and Rita, a tight global market for oil supplies, caused partly by China's surging demand, had driven up gasoline prices around the world."
Pretty much all you need to know. So, they raise the prices in tough times because they CAN raise the prices in tough times. If they raised the prices and didn't earn record profits, then you'd know it was costing them the same ratio to make gasoline as before the tough times and during the tough times. But since they raised the prices and earned record profits, you know it cost them the same to make gasoline before and during the tough times. Maybe not the same, but definitely not at the same ratio at which they charged. I hope the good guys win.