Profits Increased 2003 Based On Price Gouging
A comparison of oil company profit reports and gasoline prices during the last two years shows that California's top five oil companies have seen their profits rise in direct correlation to hikes in the price at the pump, according to an analysis of government records released today by the Santa Monica-based Foundation for Taxpayer and Consumer Rights (FTCR).
View the increase in pump prices at: http://www.consumerwatchdog.org/utilities/rp/rp004216.pdf
View the increase in company profits at: http://www.consumerwatchdog.org/utilities/rp/rp004217.pdf
"When profits skyrocket in-sync with pump prices, price gouging is the only possible explanation" said Jamie Court, FTCR's president and author of Corporateering: How Corporate Power Steals Your Personal Freedom And What You Can Do About It (Tarcher/Putnam). "This should be a wake-up call for legislators and regulators to create more public controls over the price and supply of gasoline because unregulated companies are robbing motorists blind."
By comparing Security Exchange Commission filings on profits with Energy Information Administration gasoline price data, FTCR petroleum industry consultant Tim Hamilton found that, quarter by quarter, each run-up in gas prices resulted in a run-up in company profits. The data and graphs can be found at: http://www.consumerwatchdog.org/utilities/rp/ This presentation was revised on April 27, 2004 to incorporate numerous special items that offset net company profits as reported in the companies' own quarterly profit reports.
The analysis comes as gasoline companies are expected to release their profitability reports for the 1st quarter of 2004 beginning at the end of April.
"If pump prices stay up, then 2004 will the most profitable year yet for the oil companies," said Hamilton. "These levels of profits are likely to continue in the West regardless of any actions taken by OPEC between now and the elections, since these spikes in profits are being driven by refinery manipulation, not crude shortages."
Both Court and Hamilton served as member of the California Attorney General's Gasoline Pricing Taskforce.
FTCR recently has taken up the cause of trying to keep open Shell's Bakersfield refinery, one of only thirteen refineries left in California making California's special CARB gasoline. The consumer group contends that if Bakersfield, which supplies 2% of the state's gasoline, shuts down, gasoline prices will shoot even higher. FTCR has asked regulators to keep the facility open and is investigating possible legal action itself based on a case contending Shell is artificially shrinking supply to drive up gasoline prices and misrepresenting facts to the market. The goal is to force Shell to operate the refinery or sell it to a competitor rather than demolish it, as is now planned.
Earlier this month, FTCR released internal Shell documents showing the oil refiner is set to close and demolish its Bakersfield refinery despite the fact the site had the biggest refinery margins, or profits per gallon, of any Shell refinery in the nation. See http://www.consumerwatchdog.org/corporate/pr/pr004157.php3
In addition, state analysts have shown there is plenty crude oil available to the refinery in Kern County, despite Shell's claim to the contrary. See the Department of Conservation's presentation at: http://www.consumerwatchdog.org/utilities/rp/rp004198.pdf
FTCR is a nonprofit, nonpartisan consumer group. Find out more at: www.consumerwatchdog.org