American Oil Refiners Not Exactly Raking In “Windfall Profits”
Simplistic rhetoric about “greedy oil companies” aside, the truth is that these high gas prices aren’t any better for the oil companies than they are for the average gas-buying American.
After last year’s stellar profits, American refiners are going through a traumatic period. In a time of record gasoline prices, some of them actually lost money in the first quarter, and for virtually all refiners, profits are down sharply.
Experts say the refiners are caught in a double bind. The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve.
However much the companies would like to raise gasoline prices enough to pass along the full increases in oil, analysts say they have been unable to do it. Oil prices doubled in the past year, while wholesale gasoline prices rose a mere 39 percent.
“Refiners are having a terrible time,” said Lawrence J. Goldstein, an economist at the Energy Policy Research Foundation.
Those who are demanding that the state of North Dakota build a state-owned refinery should be paying particular attention.
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