Gas Prices, Explained
Sen. Herbert Kohl didn't beat around the Bush when the Senate Judiciary Committee grilled U.S. oil company executives Tuesday on the price of gasoline and other fuels. How, the Wisconsin Democrat asked, can oil companies be paying higher prices for oil and still make record profits?
Easily, actually. Rex Tillerson, chairman and CEO of Exxon/Mobil, the world's largest publicly traded oil company, said that demand is sufficient for the higher price of oil to be passed on to motorists at the pump.
Kohl nailed that down: "Your ability to pass that onto consumers has been so successful that you've been able to make more money than you have ever made before."
There you have it, at a time when regular gas in the Lower Hudson Valley yesterday ranged from $2.399 to $2.579 for regular and from $2.549 to $2.819 for premium super.
The Senate committee held the session to determine if the dozen of so oil company mergers over the last decade enabled the industry to establish a near monopoly and manipulate the market toward higher prices.
"Every time there is a merger the prices have gone up," said Patrick Leahy, D-Vt. "Is that just coincidence?"
No, said the executives. In reality, mergers have enabled U.S. companies to become more efficient and helped them better compete in the search for new oil sources with foreign government-owned rivals.
Bill Klesse, CEO of Valero Energy told the senators that "the industry is more competitive and productive," USA Today reported. He said that Valero's consolidation of 17 refineries that the company bought since 1997 has resulted in increased efficiency and kept refineries operating that otherwise would have been shut down.
The senators weren't buying all that. Sen. Arlen Specter, R-Pa., said he plans to consider legislation to strengthen anti-trust laws and to make it illegal to delay refining crude oil or divert gasoline to create an artificial shortage, as some refineries have been accused of in the past.
Sen. Charles Schumer, D-N.Y., was undeterred: "It is naive to think that massive consolidation has had no impact" on prices. What is clear is that despite paying higher prices for crude oil, the industry is charging higher prices for gasoline because it can.
America's long-running love affair with the sport-utility vehicle is getting really expensive. President Bush finally admitted in his January State of the Union address that the nation has an "addiction" to foreign oil. Until Americans conserve on the highways and Congress adds fuel-efficiency to its legislative vocabulary, higher gas prices will be the norm.
TheJournalNews
Easily, actually. Rex Tillerson, chairman and CEO of Exxon/Mobil, the world's largest publicly traded oil company, said that demand is sufficient for the higher price of oil to be passed on to motorists at the pump.
Kohl nailed that down: "Your ability to pass that onto consumers has been so successful that you've been able to make more money than you have ever made before."
There you have it, at a time when regular gas in the Lower Hudson Valley yesterday ranged from $2.399 to $2.579 for regular and from $2.549 to $2.819 for premium super.
The Senate committee held the session to determine if the dozen of so oil company mergers over the last decade enabled the industry to establish a near monopoly and manipulate the market toward higher prices.
"Every time there is a merger the prices have gone up," said Patrick Leahy, D-Vt. "Is that just coincidence?"
No, said the executives. In reality, mergers have enabled U.S. companies to become more efficient and helped them better compete in the search for new oil sources with foreign government-owned rivals.
Bill Klesse, CEO of Valero Energy told the senators that "the industry is more competitive and productive," USA Today reported. He said that Valero's consolidation of 17 refineries that the company bought since 1997 has resulted in increased efficiency and kept refineries operating that otherwise would have been shut down.
The senators weren't buying all that. Sen. Arlen Specter, R-Pa., said he plans to consider legislation to strengthen anti-trust laws and to make it illegal to delay refining crude oil or divert gasoline to create an artificial shortage, as some refineries have been accused of in the past.
Sen. Charles Schumer, D-N.Y., was undeterred: "It is naive to think that massive consolidation has had no impact" on prices. What is clear is that despite paying higher prices for crude oil, the industry is charging higher prices for gasoline because it can.
America's long-running love affair with the sport-utility vehicle is getting really expensive. President Bush finally admitted in his January State of the Union address that the nation has an "addiction" to foreign oil. Until Americans conserve on the highways and Congress adds fuel-efficiency to its legislative vocabulary, higher gas prices will be the norm.
TheJournalNews
posted by Ottawa Gas Prices | 8:13 AM
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