Saturday was my grandson’s first birthday party, attended by about 15 adult guests. As usual the talking eventually gravitated to complaining about the latest perceived issue. In this case the most complaining was about gasoline prices reaching near $4. Having just returned from Germany and Poland I couldn’t help but be amused. I saw fuel as high as 4.45 Euro per liter. That’s 4.45E x 1.65 = $7.43, then $7.34 x 3.8 = $27.89 per gallon. And we’re complaining.
As usual the non-capitalists of the group also thought the big oil companies are shafting us as evidenced by the huge profits being reported. Those just don’t understand business in the least. The profits are large because the sales dollars are large. The profit margin for oil companies is only about 8% to 10%. That’s so low that most industries would fire the management if that’s all they could do.
The high sales price is due to many factors that include high demand by China’s growing economy, the weak dollar and our own government refusing to allow new refineries and wells in the US. That’s economics 101 folks, the law of supply and demand.
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Gas prices be damned, I got a new-to-me '06 F-150 with 22k on it and many trimmings, and I love it better than the old '95. I aim to heat up the planet a bit, we all must do out part to bring about Global Warming.
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