In a recent op-ed published in the Gazette-Mail, the author listed all the wonderful things that will happen as soon as Donald Trump takes office. One of those wonderful things, a price at the gas pump of $1.75 a gallon, deserves a closer look to understand why that may not happen.
There are many costs that go into determining the price per gallon of gasoline, such as the barrel price of oil, refining costs, transportation, labor, state and local taxes, etc.
But one component is a cost only to the consumer: the oil company’s net profit.
Last year, Exxon/Mobile showed a net profit of $36 billion. Chevron’s net profit was $21.4 billion. Shell Oil had a net profit of $19.4 billion. In total, the top 20 oil companies in the United States declared a net profit of $180 billion. That’s $180,000,000,000. (For the record, their federal income tax rate was only 2.5%.)
Let’s give that $180 billion some context. With a 2023 U.S. population of 343.4 million, that’s a net profit of $524 for every man, woman and child in our country, whether they drive or not.
It will be interesting to see how our new/old president convinces the oil companies that, while maximizing net profit is the obvious goal for any company, it should not be done by gouging the public.
That’s a tall order for someone who’s done a fair amount of gouging himself with Bibles, gold sneakers, commemorative coins and a fake university all bearing his name.
