As Gas Prices Rise, Oil Companies Enjoy Multibillion-Dollar Rise in Profits
Pumped up about skyrocketing gas prices? Many American motorists are.
According to AAA, the average U.S. price for a gallon of gas was $3.33 on Feb. 26, up from $2.70 a year ago. Some experts predict gas prices in some areas of the country could skyrocket to $5 a gallon this summer.
While we’re paying more to fill up, the three largest publicly traded oil companies based in the United States have been filling up on profits.
Those three companies – ExxonMobil, Chevron and ConocoPhillips – collectively pulled in an eye-popping $58.3 billion in profits in 2010, according to financial figures announced in January 2011. Mind you, that’s profit – the amount of money that companies pocket after covering their expenses.
By means of comparison, the net worth of Microsoft founder Bill Gate has been pegged at $53 billion, about $5 billion less than the combined profits of the Big Three oil companies.
Here’s the breakdown of the Big Three’s profits in 2010:
• ExxonMobil: $30.5 billion, up $11 billion from 2009. In a substantial understatement, ExxonMobil’s vice president of investor relations, David Rosenthal, said he was “very pleased” with the company’s financial results for 2010.
• Chevron: $19 billion, up from $10.5 billion in 2009.
• ConocoPhillips: $8.8 billion, up from $4.9 billion in 2009.
Certainly, massive profits for Big Oil are nothing new. And for years, American motorists have been moaning about high gas prices while oil companies have been raking in billions of dollars.
“Enough is enough. We need Congress to stand up to Big Oil and pass legislation that addresses the problems with oil profits and oil use,” Daniel J. Weiss, director of climate strategy at American Progress, wrote in April 2010.
“In short, Big Oil’s profits climb higher and higher as American consumers feel more and more pain at the pump. This needs to stop.”
Of course, Weiss wrote that well before increased instability in the Middle East sent the price of oil past $100 a barrel.
Given the recent spike in oil prices, Public Citizen has renewed its call for a “windfall profits tax” on oil companies. Revenue from that tax should go toward clean energy, energy efficiency and mass transit, Public Citizen said. The group said Americans should dismiss talk of drilling for more oil on American soil.Continued on the next page