The Denver Post reports that refiners are making huge profits off the increase in oil prices:
As motorists paid record gasoline prices this summer, oil refiners were ringing up record profits - and that was before hurricanes Katrina and Rita. In a free market system, private enterprises are free to earn what they can (note the headline from the front page of Friday's Wall Street Journal: "How some doctors turn a $90 profit from a $17 test"), but the dramatic rise in energy prices deserves scrutiny.But, you wonder, this is a workplace health and safety blog, why is he writing about obscene profits being made by refiners?
If gas prices just reflected rising crude oil costs, refiners would enjoy higher revenues with consistent profit margins. Instead, U.S. refineries' gross margins (gasoline prices minus crude oil costs) tripled from $7 per barrel in September 2004 to $22 per barrel last month, reports Denver Post writer Steve Raabe.
On Sept. 1, during Katrina, refinery profits hit record levels of nearly $32 a barrel on gasoline sales, compared with more typical margins of $6 to $8 per barrel. The increase in refining margins that day was 434 percent over the same day a year earlier. Those numbers smack of avarice.
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From September 2004 to last month, net income rose for ConocoPhillips 65 percent, 39 percent at Royal Dutch Shell, 38 percent for Exxon Mobil and 31 percent for BP Amoco.
Good question. But close readers of Confined Space know the answer. Last week I noted a Wall St. Journal article that doing needed maintenance of their plants (which means temporarily reducing output) or taking advantage of skyrocketing profits -- and risking dangerous explosions -- by keeping the plants running beyond their needed maintenance schedules.
Safety culture vs. higher profits. Injuries, deaths and enviromental pollution vs. higher profits.
Choices, choices....
