if you figure it out, let me know 'cause i'm on board w/ that one.
i find it odd that, w/ the current price of fuel and the overall increasing trend for the past few years, even though people are doing most everything they can to burn less fuel, oil companies still
continue to enjoy record profits.
it would seem to me, that their profit margins placed on the retail product is increasing w/ the cost of oil/barrel.
my thinking (which must
be why i'm wrong): say the final product of refined fuel costs $1.00 per gallon. it costs the oil refinery $0.50 to make it and then they put and extra $0.50 on it as profit. so total consumer price is $2.00 per gallon.
now, when the price of supply (crude oil) increases, so must the consumer price. so if crude drives the price up to $3.00 per gallon, then add the refinery's overhead cost of $0.50 and profit of $0.50, we now have a consumer price of $4.00 per gallon.
but wait - no one wants to pay $4/gal for fuel!! so people use less fuel by whatever means possible (fuel efficient vehicles, carpooling, etc). less fuel consumed = less product sold = less profit to the oil companies.
so how, if people are trying to avoid paying high fuel prices by consuming less fuel, do the oil companies continue to have record profits???
my theory: their operating costs and/or profit margins are not fixed - they can vary them depending on the price of crude costs versus consumable supply.
i think as price goes up, that $0.50 per gallon profit (in this simplistic example) is increased as well... :shrug: