A rise is GROSS profits does not indicate a rise in NET profits, which is what really matters to a company.

Think of it this way.

Let's assume the cost of oil has roughly doubled.

Oil companies are going to have to pay 2 x as much per barrel.

They're going to pass the cost onto comsumers (oil companies not being charities the last time I checked) and we're going to pay about 2 x as much.

That is going to cause a huge increase in GROSS profits!

But since they're paying twice as much ALSO, it's not going to correlate to the same kind of increase in NET profits.

So no, I can't say I'm surprised at all that their gross profits have increased.

As for whether it's a concern of mine, I'm lucky that this isn't causing financial hardship for me. I work at home live in a city where everything is pretty much walkable. I rarely use my car.

Hard times breeds ingenuity though, and I think when something hurts people's pocket books they really start to think about the choices they make. My friends who drive gas guzzling SUVs and trucks to navigate around suburbia's rough culdesacs are thinking of downsizing next time. Maybe people will start carpooling.

If something is easily available to us, and it's cheap, we'll use it. If it's expensive, we figure out ways to cut back. I think we need to focus on the latter, not the former.

I do feel sorry for people who are living at the poverty line who this truly does affect. Some people really do need a break. But most others need to adjust their lifestyles, not get cheaper gas.

Thats a good point Pop, does anyone know what the rise in NET profit was?

British energy giant BP said that net profit jumped 63.4 percent to 7.62 billion dollars (4.90 billion euros) in the first quarter of the year, driven by sky-high oil prices.
- from yahoo

So that is net, not gross.

great point Pop! I am wondering the same thing Cabaker.

Thanks Dave!

As much as I'm all about the govt staying the heck out of the business, we def. need SOME kind of regulation here I think...

Eish, the first website I used to lookup gross vs net wasn't entirely accurate, and I passed that along to you Sorry.

I think this is a better example from Wikipedia:

In accounting, Gross profit or sales profit or gross operating profit is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments.

So, while gross profit does NOT include the cost of the oil directly, it would include overhead, payroll, taxes, interest etc. I still think net profit or net income would be a better measure.

What kind of regulation can we do? If OPEC is charging us an arm and a leg for oil, then there is not much we can do.

Maybe Warren Buffett should buy OPEC!

haha!

Maybe we could work out a barter system like Dave said...

Maybe we could start finding oil HERE!!

Yeah, you guys are right. In terms of net profits, those oil companies are probably really hurting. Good point. Let's take up a collection and help them out.

At this point, we could converting coal to gas for half of waht we are paying per barrel. A bonus is we already have a huge stockpile in North Dakota

I would rather us drill for oil here in the US then start to have government regulations. I think once you start doing that, it is a dangerous path to be on. We have to get the Environmental people to agree with the drilling first!

I say screw the environmental freaks.... We need in-house alternatives. If we have to drive a couple species to extinction, so be it....

Regulation is probably the only thing standing between oil companies and an American landscape that looks like garbage. Do you honestly think that any company cares about what they do to the environment if it weren't for the federal government? Do you really think they're going to police themselves? Whenever we remove regulation it always, without exception, leads to disaster. Just look at the sub-prime market. That's a direct result of removing government regulations. How's that working?

I'm with Cine- We absolutely have to start drilling for oil in the US, IMO. Enough is enough.

I am not sure that I want government regulations, but what is happening with the oil companies is definitely not pure capitalism...when they have lobbyists bullying our public officials against our best interests, something needs to be done. I don't have the answer, but I don't think the answer is the current situation.

I work in the transportation industry, and I can tell you that people are very scared of what is going on with the fuel prices- it's affecting so many businesses.

Sure gas prices are high, but how can you complain about paying $3.50 for a gallon of gas when you will pay a dollar for a 24 oz bottle of water? Quit paying for bottled water and maybe you can afford the gas.

My bank account isnt hurting because of gas, really if you look at your expenditures and budget correctly you can compensate.

I dont want to hear anyone whine who stands there with a starbucks coffee, talking on the newest cell phone and wearing frikkin abercrombie board shorts.

I don't buy bottled water and I can't afford the gas. I'd hold a bake sale to help the poor oil companies trying to struggle along on just their net profits, but the cost of eggs and flour has tripled in my neighborhood since the end of March.
Before we start ravaging the U.S. to feed this oil addiction, try cutting back on driving, on consumption, grow and buy local. Once you start tearing up more of the land and fouling the air even more, it's lost to generations of Americans who probably aren't going to thank you because unless we learn to conserve and find alternatives to oil, having enough is always going to be a problem.

Can I complain? I wear mostly the same clothes I have had for 4 years, my cell phone is over a year and a half old, I never buy coffee out, and always bring my lunch into work, never spending more then $3 a day on it, I take public transit to and from work and I am still feeling the pinch.

"Just look at the sub-prime market. That's a direct result of removing government regulations."

This has more to do then just lifting regulations. Much of this had to do with people complaining that lower economic class people were being targeted and would never be able to buy a home. Individuals also have to take a HUGE part of the blame. We were not forced to buy houses and to use our credit cards. That was a choice we as individuals made. All regulations do, is make it so you do not have to make responsible choices. Not everything is the government's fault.

I am not saying that the Oil companies should have free reign over our landscape, but the fact of the matter is, there is oil in US soil. We complain about OPEC, yet we are not doing anything to alleviate our dependency on them. We have no problem with letting the middle east look like a giant oil field, but heavens no, not on our soil.

Also, if people made more of an effort to walk more, take public transit, and car pool, then we would not need the government stepping into private companies. We do have a voice, but instead of just yelling about what is bothering us, why don't we stand up and make a difference.

I also realize that rural America does not have the same options as metropolitan America, but I have not seen an increase of people on the subway or train, just an increase in whining.

I don't see how us trying to impose regulations on OPEC is going to work.

btw, i dont think anyone is defending the oil companies or saying they are starving... the whole point of the net profit figure was just to get our facts straight.

Don't regulate OPEC, regulate our own behavior. Personal responsibility for oil usage.

We can't regulate OPEC. They will laugh at us.

"btw, i dont think anyone is defending the oil companies or saying they are starving... the whole point of the net profit figure was just to get our facts straight."

Exactly!

One more complaint. I was walking through the farmers market in Union Park the other day, and the prices were UNREAL. They wanted $7 for a bushel of Asparagus! $5 for lettuce! I have never been to such an expensive farmers market in my life. I wound up having to buy from a local grocer instead.

I completely agree the best way to fight the oil companies is to reduce our dependence on oil, but not everyone has access to buses, or trains, or subways or any of that... Some of us HAVE to drive, its not a choice.

That being said, there are ways to curb your consumption even if you have to drive... buy a motorcyle!

I'm trying to convice my wife to let be get a cycle. I think I'd look so cool on one....

or, buy a fuel-efficient car. If a person can separate themselves from their car as a status symbol, they can save. I fill up my paid-for honda civic for about $38. granted, I don't have 3 kids to cart around, and I live 2 minutes from work. I would walk to work if there wasn't a freeway between me and the office!

well... i don't see cars as a status symbol, but i do judge some people by what they drive... personally, i'm never going to trade performance for fuel efficiency.

Hopefully consumers will learn to be more mindful of our resources. This should be a lesson to not just switch to an alternative fuel source, but perhaps utilize more fuel-efficient transport and not be so wasteful with transport routes or purposes.

I am so glad I just moved to a bike-friendly city. That was a big consideration in our move. I only have to drive 15 miles once a week for work. I think I have filled up my Jetta once in the past month. If not I think my wallet could be scared.

What does everyone think of the gas tax vacation?

I don't think cutting 18 cents is that much. On a 15 gallon tank, it would only save you $2.70 during a fill up. There is nothing preventing the gas companies from raising prices 18 cents. The taxes from gas goes towards infrastructure...an area that is soooooo underfunded right now. There are 16,000 bridges in the same state as the Minnesota bridge that collapsed that won't get their inspections this year because of lack of funding.

While a tax vacation sounds good, I am not willing to sacrifice my safety to save $2.

...I meant state of repair, not that the bridges are all in Minnesota!

Cabaker, that is why I mentioned the people who don't have a choice to take public transit. I lived in an area before where it was impossible for me to take public transit. It just seems that the people who can, at least in the tri-state area, are b*tching and moaning, yet I don't see an increase of commuters on the train or subway. Those are the people who bother me.

Where do you live Jillness? If the taxes were removed here in WI, I would save almost 85 cents a gallon. I agree with you that that's hard to swallow when the bridges I drive on might not be inspected because of budget concerns though.

I live in CA.

They don't have the ability to lift all taxes on gas, right? It would just be federal ones, correct? I need to find more specifics!I keep hearing commentators on both sides reference 18 Cents.

Oh I know Cine, I wasn't directing that at you. Sorry if it came off that way!

I haven't heard the 18 cents figure, but that would make more sense (or cents, he he) since I don't think the Fed can get the states to take off their taxes.

Maybe instead of a stimulus check we should have all gotten stimulus gas cards!

Heres an idea and this is just a shot in the dark, but remember in the 90s how the gov't shut down for a few days? What if the government told everyone, some Saturday in the summer, to stay home? Don't drive. Don't go anywhere, all day, for one day. Just to send a message?

Obv. first responders and all that would get a pass and have to go to work.

If it is a federal tax then I would be all for it going away, every little bit helps.

Cabaker, I don't know if that would work. You would need the gas stations to close down that day so you did not get people who wanted an easy day of driving without traffic, and that in return would hurt their business.

Cabaker, I just did not want you to think I forgot about my rural peeps!

Jillness, my understanding is that the tax on the Federal level is around 18 cents, so it wouldn't make that much of a budge.

It's the states that tend to carry a heavier tax on gas.

I'm currently in Jersey where we have some of the lowest gas prices in the country. Why? Our state doesn't tax gas that heavily.

It's amazing, if I drive 20 minutes across the New York state border, prices jump easily by 20 to 40 cents a gallon at times.

If the states were to suspend their gas taxes, that is where you'd see the biggest savings.

Additionally, Hillary said she would like to recoup the missing gas taxes (from the summer suspension) by adding a windfall profits tax on the gas companies. Which, of course, would just wind up getting passed down to the consumer and there goes the summer tax break.

I like the government to stimulate me in other ways.

If it's just the fed tax that is $.18, then that's a crock of bull. That will do about as much good as the tax rebate checks we're getting

Thanks for the info 3M.

Anytime cine, anytime.

Cabaker, I like the idea of a day to save but it does quickly seem impossible. Any business told to shut down would complain it was being singled out for punishment, businesses would complain that the govt was hurting their profits if it encouraged people not to go out and spend. I know my city would probably be furious if it lost a day of parking meter money. We'd all run up our electric bills, watching t.v. and running the air conditioners... I've wondered about encouraging businesses to cut hours, use less electricity - but lost profits come in to play in any idea.

Yea all good points... just trying to brainstorm! cuz you know, i'm sure i'll be the one to solve all this! haha!

I'd like to see the gov't give tax breaks to people who take public transport and tax breaks to companies who either encourage their employees to work from home if thats possible or reimburse their employees for using public transport.

Money is always a motivating factor.

"Money is always a motivating factor."

I think you're 100% correct.

I'm sorry to see gas prices soaring but unless something affects our pocket books, we're unlikely to take action. Some people will, who are especially socially conscious or whatnot. But the rest of us, the majority, will adjust their habits only when forced to.

I like the idea of incentivizing as well.

I know some companies and gov't agencies do the flex week of 4, 10 hr days to save their employees commute time 1 day per week. Also, with all the technology we have available., companies should really start letting people work from home at least part time.

Pop I totally agree, when I lived in northern VA a lot of DC companies would let thier people telecommute because the traffic is so god awful there.

And did you know that when people work from home they are actually MORE productive? Its true!

We have a work from home policy but my Director won't let our group use it. I could save SO MUCH, because I commute 50 miles each way.