Last week ExxonMobil, Shell, and Marathon Oil all reported double digit profit increases for the 3rd quarter of 2005. While the usual suspects engage in their typical wailing and gnashing of teeth over capitalism doing its job, may I be one of the first to say congratulations. Congratulations to ExxonMobil for $9.92 billion. Congratulations to Royal Dutch Shell for $9.03 billion. Congratulations to Marathon Oil, a local Houston company, for their $770 million. That’s how the business works.
What I find amazing is how everyone immediately points to higher gasoline prices as the source of all this “obscene” profit. Is it just me or have gasoline prices been rising since at least 2001? So this increase (which actually lessened in the last couple months) cannot be solely responsible for increased profits during three months of this year.
Furthermore, there is a profit more important and sinister than the one oil companies are legitimately making from the price of their products. According to the Tax Foundation, the federal government has received more tax revenue from gasoline purchases since 1977 than oil companies have received profit from them. While this comparison uses revenue for government and only profit for industry and ignores industry total revenue, the fact that the federal government has received over $1.34 trillion from gas taxes alone since that year should be immediately recognized as as the real “obscene” profit here.
If the federal government were really so concerned about how “high” fuel prices are affecting consumers, they would eliminate or at the very lease halve federal gasoline taxes.