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Welcome to my blog, Solomon's Conservative Wisdom. The name of this blog comes from my middle name and the historical & biblical figure King Solomon. This group is dedicated to conservatism, and I invite all conservatives to join, I really don’t mind non-conservatives joining. All I expect is a respectful debate. So tell everyone you know.
Saturday, February 27, 2010
Now to the point of this, first some quick numbers we use 200 billion gallons of gasoline and diesel annually, if we were to multiply that number with the average profit per gallon of gasoline, $0.10, we would only get 20 billion dollars, so where does the oil company’s big profits come from? First is the misunderstanding of what a barrel of crude oil produces many seem to think you take a barrel of crude oil and turn it into a barrel of gasoline, diesel, jet fuel, and kerosene and then you mark up the price and claim a barrel of excuses of why it costs so much. The truth is far more extensive.
Here is a percentage brake down of a barrel of crude oil, approximately 45 percent of all crude oil is refined into gasoline, 7 percent is refined into diesel fuel, and another 7 percent into jet fuel. Fuels for heating and energy production account for approximately 26 percent of all refined petroleum. 13 percent of petroleum proportions serve as raw materials in manufacturing, these "petrochemicals" are used in manufacturing cosmetics, detergents, drugs, fertilizers, insecticides, plastics, synthetic fibers, and hundreds of other products in the marketplace. And such products as lubricants and specialized industrial oils account for the last 2 percent of petroleum production. Also by-products of petroleum refining are also used as raw materials in certain industries, these by-products include asphalt, the chief road building material, and
wax, an essential ingredient in such products as candles, milk cartons, and furniture polish. As you can see removing oil from our modern civilization and society right now, as those on the environmentalist’s side want, would have disastrous results.
The problem is that the oil companies don’t defend themselves, for whatever reasons they have, my suspicions are, based from when I talked to O’Reilly on his now defunct Radio Factor show and how he has treated Neil Cavuto and other conservative economists, the probably look at it from a lose-lose point of view. If they were to go on with him he would brow beat them, dismiss any points they try to make, and claim things like profit margins are smoke and mirrors.
Here are the profit margins for some big well known companies, Microsoft’s is almost 30%, eBay follows at 21%, Google’s is approximately 19.5%, which is followed by McDonald’s, Coca-Cola, and Pfizer all around 18%, Apple comes in at 15% (this might go down if the iPad falls on its face), Disney comes in at 12%, AT&T 11%, GE 10%, Nike 9%, and the Health Care industry sits around 3.3% so where do the oil companies sit in this list? With Nike at 9%, Exxon Mobil and Chevron both have a profit margin of 9%, which means for every dollar they pull in only $0.09 of every dollar is profit, now how’s that for gouging?
So how do you get the profit margin of a company? First you take a company’s profit, lets say Joe’s Book Store has a profit of $255,932, you divide that by the total dollars the store takes in, lets say that Joe’s Book Store pulls in a total of one million dollars this year, that would be $255,932 divided by one million which would equal 0.255932, move the decimal over to the right by two spaces and you get the profit margin percentage, Joe’s Book Store would have a profit margin of 25.56%. As you can see its fairly simple especially with a calculator.
So why don’t you hear these things from the mainstream media? Simple, they are made up of liberals, progressives, and populists, in addition to believing that the oil companies are evil, greedy, and polluters that want to destroy the earth, they have an agenda the same one the original progressives and Marxists had over one hundred years ago, one where the socialists make the decisions what is good for you and if it "harms" you, society, or the planet you can’t have it, they might even ban it. The problem is they are elitists who use emotion as a weapon, if they say it’s bad, you are to march lockstep with them and if you don’t you get yelled down and called names to shut you up.
People like Bill O’Reilly are caught up in that emotion, they don’t stop to calm down and look at the facts. They let the liberals, progressives, and populists use them without knowing it, thinking like O’Reilly does they are protecting the people from the greedy. The solution to this problem is simple, we need to get these people to calm down and look at the real numbers & facts so they will realize that they are being used.
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