Lawmakers question gas 'mess'

[1931Chevy]

http://www.detroitnews.com/apps/pbcs...705170326/1148WASHINGTON -- While oil companies blame soaring gasoline prices on unexpected refinery shutdowns, Congress is questioning whether industry mergers and investment decisions have erased a supply cushion.

The House Judiciary Committee's antitrust task force Wednesday opened the first of a number of hearings on oil industry concentration with its chairman noting that gasoline prices have soared well above $3 a gallon and asking, "How did we get into this mess?"

"Oil companies today are enjoying record profits, and while they could use those profits to invest in more production capacity, instead they use the money to buy back shares in the markets," complained Rep. John Conyers Jr., D-Mich., the panel's chairman.

[Ach]

God, I love this. Oil companies DO NOT have a responsibility to the general public to keep prices at a certain level. They have a responsibility to shareholders to maximize profits. Now some Congressman is going to tell them how to invest? Unbelievable. If they want to regulate this, fine (or not fine-but I'm not going to open that can of worms). But until then, the oil companies will (and should) behave like every other corporation-that is, in their best financial interest.

[Havasavana]

Originally Posted by Ach

God, I love this. Oil companies DO NOT have a responsibility to the general public to keep prices at a certain level. They have a responsibility to shareholders to maximize profits. Now some Congressman is going to tell them how to invest? Unbelievable. If they want to regulate this, fine (or not fine-but I'm not going to open that can of worms). But until then, the oil companies will (and should) behave like every other corporation-that is, in their best financial interest.

I agree with you, but the politicians are doing what the whiners of this country expect. Read what has been written on this forum the past few days. People want to drive gas hogs as much and as fast as they want for cheap.

[thebuickguy]

Well from my view point Rockerfellers control over oil was broken up by the goverment in the early 20th century, to bring in lower prices due to competetion and it worked. Now we are seeing all these oil companies merging saying it will help the consumer if they keep merging, but if you ask me looks like Rockerfellers control of the early 20th century is back and we need to dash the oil companies into a thoasand pieces once more to bring back the competeting for prices.

[miami-k9]

Originally Posted by Ach

God, I love this. Oil companies DO NOT have a responsibility to the general public to keep prices at a certain level. They have a responsibility to shareholders to maximize profits. Now some Congressman is going to tell them how to invest? Unbelievable. If they want to regulate this, fine (or not fine-but I'm not going to open that can of worms). But until then, the oil companies will (and should) behave like every other corporation-that is, in their best financial interest.

You understand of course that these corporations have a massive interest in the direction and health of every country in which they supply. Their profiteering has placed enormous stress on our countries infrastructure and has caused a economic slowdown. They could, in effect, hold us hostage. US production capacity will barely provide subsistance supplies for essential services.

They have done it in the past, imagine if they did it again but this time did it long term. They do have to make certain concessions to the govt to be granted certain securities that only companies with their clout and importance are given. I assure you if every computer in the country suddenly slowed down and barely ran, Bill Gates would be sitting in front of a congressional commitee explaining himself.

[Joe Analyst]

I think what the congressman is griping about somewhat is corporate ethics in a market that, quite honestly, our current society is dependent upon. Clearly the automotive manufacturers can not change technology as quickly as oil companies can inflate prices. Our world has no alternative but to pay prices, regardless how high they are.

What would you do tomorrow if you woke up and gas was $10/gallon? Would you still want to sign into a newsgroup and defend the oil company's right to maximize profit? Or would you motor around in your Yaris with a big smile on your face and say, well, it still only cost me $60 bucks to fill.

This same scenario would be true for any public company that produces a product so deeply ingrained in our culture that the public has no choice but to pay whatever they charge--all in the name of "shareholder responsibility".
If milk companies decided to charge $8-$10 per gallon and say that it was because pasturization costs were higher, or that cows were not producing as much milk as they used to, what could any of us do about it? While we could stop drinking milk, the likelihood is that we would continue to pay since milk is part of our way of life. Plus, imagine the outcry of cereal manufacturers.

Don't get me wrong. An energy company should be profitable. But how we regulate or define that profitability in a market that sees prices change hourly at the pumps (even though its the same gas in the underground tank) should be more closely safeguarded.

[prowlerjc]

The merger of the big oil companies never should have been allowed to happen.

[skylark68]

From Wikipedia: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony." Also: "The Act was intended to prevent arrangements designed to, or which tend to, increase the cost of goods to the consumer."

Sounds like the Sherman Anti-Trust Act applies to what is happening right now due to mergers and lack of competition.

[SUPERBADD75]

Originally Posted by Ach

God, I love this. Oil companies DO NOT have a responsibility to the general public to keep prices at a certain level. They have a responsibility to shareholders to maximize profits. Now some Congressman is going to tell them how to invest? Unbelievable. If they want to regulate this, fine (or not fine-but I'm not going to open that can of worms). But until then, the oil companies will (and should) behave like every other corporation-that is, in their best financial interest.

normally i would agree with this, but the more i think of it, gasoline is more or less a necessity. there are a lot of people out there that only make enough money to just live, and say what you want about life decisions and whatever, but with gas prices going up and up, it's straining those families even more. the less fortunate people often live further from where they work and drive older, less efficient vehicles already. making gas more expensive is only complicating it more for them. i don't think we need to be a socialist society, but i also believe that we do need to at least be considerate of those less fortunate than ourselves (in our own country, mind you.... stop sending money overseas!! i know, that's another subject for another day) and when big oil is making record profits, it's killing the lower working class families. there is a balance that can be made, it just means that Mr. Oil CEO could only afford one Jetstream and not two.

[I-Love-Pontiac]

Originally Posted by Ach

Oil companies DO NOT have a responsibility to the general public to keep prices at a certain level. They have a responsibility to shareholders to maximize profits.

Oh, so if all the automakers banded together and agreed to make only expensive low efficiency vehicles, that would be ok? "Maximizing" profits is one thing. But if by doing that, you put a strain on an entire nation, it's an entirely different matter.

Exxon was never having money issues, so there is absolutely no reason they would NEED to double their profits. Last time I checked their profit margin was above 10%. That is completely ridiculous for a company that large. For comparison Wal-Mart (the only company richer than Exxon) has a profit margin of 3%. The lone fact that a single oil company is comparable to wal-mart is ridiculous on it's own.

What gets me the most though, is that they COULD build more oil refineries, and they COULD start selling ethanol, but don't just because it isn't quite as lucrative as gasoline. No one is more capable of making Ethanol and bio diesel a reality more than the oil companies.

What's equally frustrating though is how the government is doing nothing about it. Like Bob Lutz said, they need to stop putting blame and restrictions on the automakers. My favorite idea thus far was to require all gas stations to have at least 1 alternative fuel pump for however many petroleum pumps they have.