Oil companies Trim Profits Before Elections

[Orsino]

http://www.consumerwatchdog.org/energy/pr/?postId=7005

Santa Monica, CA -- The recent sharp drop in gasoline prices from this year's record highs is steeper than the drop in the price of crude oil, indicating that refiners are taking less profit in order to push the retail price lower as the election approaches, said the nonprofit Foundation for Taxpayer and Consumer Rights (FTCR). It is a pattern that is also evident, though less sharply, in the autumn of the last two election years, 2002 and 2004....

Hamilton analyzed the gap between pump prices and the spot price of crude oil in election years, compared to the non-election previous years. He found that in 2002, 2004 and now in 2006 there was a moderate to substantial shrinking of that gap, meaning less profit potential for the oil companies, in measurements taken the first week in October. See his charts at: http://www.consumerwatchdog.org/energy/rp/7002.pdf (gasoline prices) and http://www.consumerwatchdog.org/energy/rp/7003.pdf (gap between crude and gasoline). Underlying data is available at: http://www.consumerwatchdog.org/energy/rp/7004.pdf.

"This pattern of the last three election years is an indication that motorists who smell something fishy in the rollercoaster prices they've endured this year may be on to something," said FTCR President Jamie Court. "The rise to record high gasoline prices this spring unleashed a wave of justified criticism of bloated oil company profits. Now the price drop in the pre-election period, by a percentage well beyond reductions in the price of oil, smells just as bad."

[TheCowsCameHome]

1. I suppose Exxon's 10+billion last quarter was a real sacrifice, huh?

[williesgirl]

2. Their profits are obscene, at our expense. They should all go to jail. recommended

[BootinUp]

3. Probably worth a read.

Although I think people underestimate the effect of a slowing economy.

[GreenTea]

4. It's so obvious, can you imagine the idiot mentality by those who believe or think

it's just coincidental?

There are NO coincidences in politics!

[Orsino]

5. Well, to their credit...

...DUers who have invested a lot in a skeptical stance can quite reasonably claim that prices are controlled by a lot of factors, most notably supply and demand. Where they err is in assuming that cronyism must therefore be insignificant. Faulty logic.

The petroleum industry is willing to do favors, and to take losses, to promote oil-friendly government. They prove this, after all, with massive donations every election cycle. Why would we assume that they wouldn't monkey with prices, even a little bit, to achieve much the same end?

Sure, they'll take a profit cut if they think it will pay off. It would just be hard to show how much of that is going on, without seeing the e-mails. The OP references an article that's a good start.