Times are tough, even if you’re one of the world’s largest oil companies! Defending high gas prices at the pump for the past month – up to $2.15 a gallon here in Milwaukee – Exxon CEO Lee Raymond had this to say according to Forbes:
Raymond said he wanted to remind consumers the two biggest factors in the price of gasoline at the pump were crude oil prices and taxes. He estimated the company’s profit was around five cents a gallon.
Man, how can a multi-billion dollar mega-corp even get by on a nearly non existant 5 cent profit per gallon sold?
Well, I did some checking to see just how dire a situation it was for poor Exxon. The best I can tell (this stuff is near impossible to find by the way) each day there are about 8,500,000 barrels of gasoline produced in the US according to the Department of Energy, most of that I assume is consumed (another reason they give for high prices, HIGH DEMAND!).
Now, to be fair, that’s not all Exxon gasoline, but even Exxon says they’re the #1 fuel refiner in the world, so lets say on the low end that 50% of those 8,500,000 barrels of gasoline a day are Exxon barrels. So we have 4,250,000 barrels a day with 40 gallons per barrel….comes out to 170,000,000 gallons of gasoline sold every day by Exxon.
So, as Mr. Raymond said, they only make a tiny 5 cent profit on each of the 170,000,000 gallons of gas they’re selling. That comes out to 8,500,000 US Dollars, which isn’t a whole lot of money.. Untill you consider they’re profiting nearly nine million dollars every day. An average of nine million a day, every day of the course of a year bags them 3.2 Billion dollars per year.
And that’s just in gasoline.
Yes indeed, you can now see why Mr. Raymond feels the need to defend his company.. You can’t really buy anything these days for a nickel, so why should consumers make a big fuss?
Of course, some of the numbers I’m using above could be off, but they would have to be way off for Exxon not to be profiting hand over fist from it’s gasoline sales these days. Profiting to the tune of $21 Billion dollars in 2003 alone. Yes, I think we can all feel for Mr. Raymond and his companies razor thin profit margin.