Still Being Gouged at the Gas Pump

I can understand how it might takes a lot more capital to produce a gallon of gasoline than it does to produce a gallon of bottled water.  I can also see how sheer volume and not necessarily margin will dictate the size of the profit that a business entity ultimately makes. 

What I cannot understand is how the American population is allowing oil companies to get away with such excessive profits without taking a stand against gas prices that, at over $3.00 / gallon, are over 40% more today than they were 1 year ago. 

To put those numbers into perspective, Wal-Mart, #1 in the Fortune 500 for 2007, reported $3.2 billion in profits during the same quarter. 

As a suburban society that is almost entirely dependent upon our automobiles for day-to-day living, the long term effects of these prices are bound to be detrimental to the buying power of millions of families.  Taken in concert with the price increases that are soon to come from businesses whose bottom line is already being affected by increased transportation costs, our economy is poised to fall hard beneath the wake of this perfect storm.   

So how do we address the issue before it completely collapses the middle class economy?  The obvious answers might be to curb consumption by somehow taking responsibility for the current prices ourselves, which to some degree I concur.  However, if we look at the profits that all 5 companies listed above made in just the last 3 months of 2007, it is easy to see that prices are not being driven by supply or demand.  Gas prices and billion dollar profits are being driven by the management of those multi-national corporations and their fiscal responsibility to investors to maximize yields on their investments.   

This problem stems from the reluctance of our government leaders to protect the American public from the type of opportunistic price gouging that would impose a bottled water merchant with a stiff fine if they attempted the same tactics toward natural disaster victims. 

Perhaps this is more of an important issue for the upcoming elections than it is being made out to be (?). 

For a look at Exxon’s spin on how gas prices are set you can go here.