The above screencap comes from: http://www.dailymail.co.uk/…/news.html
Haha, dig that pun in the title for this post!
Anyway, so the article is pretty self-explanatory as is the headline. Just because the price of oil goes up it doesn't mean their profits should go up as well. In fact, unless they're hiking up prices even more, their profits should be going *down* not up.
See, what is happening here is that Shell is charging us more for their product--but they've increased the price of gasoline at a rate that is not commensurate to the price-increase oil has gone through.
In other words, they're getting greedy.
One of the theories of the Free Market goes like this:
You can charge as much as you like for your product so long as the market will bear it.
Another way to put this is to say: As long as people are buying, your price isn't too high.
What the Free-Market-thing doesn't really take into consideration is that sometimes people will buy something they need even if they can't afford it.
Housing is a good example. Health care is another. So what happens when you can't afford to buy those things but you need to anyway? You take out a loan.
We know how that goes. The number one reason people declare bankruptcy these days is because of health care costs. Another popular reason? Housing loans. Perhaps you've heard of the recent sub-prime mortgage mess?
So, some of us (even those of us who don't drive SUVs) are paying in excess of $30-$40 (and even $50) to fill our tanks up. A friend of mine who does drive an SUV pays $350 a month on gasoline. That's a car payment or in some areas of the country a month's rent.
So, are we going to start taking out loans just to buy gas? I'm not suggesting that--I bet we're going to end up sacrificing other things instead. That new suit for work, or the new TiVo or better car insurance, health or life insurance, those nice things you want to buy your family and friends on birthdays, nights out with your significant other--that sort of thing.
There are a lot of "little" things we can all sacrifice so that companies like Shell can keep all that cash coming in.
And we'll have to sacrifice a lot of them just to keep our cars running. What choice do we have?
Of course, companies like Shell *could* reinvest their profits into diversifying their products. They could spend some of those gobs of cash on alternative fuels--solar, wind or hydro power for cars.
They could quite easily do that--What, you don't think $28 billion would go a long way to developing other power sources for cars?
What about the profits of the other oil companies? What about car companies? Shouldn't *all* cars be hybrids or better by now?
We consumers can't change things like this--only the oil and car companies can.
I guess they're not just greedy but lazy, too.
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