BP Profit, Including Inventory, More Than Doubles from Year Ago to Over $10 Billion on Spiking Oil Prices
Santa Monica, CA — BP, only number four of the five major oil companies, rode the wave of the crude oil price spike to a staggering profit jump in the third quarter of 2008. It is a stark reminder of the damage inflicted by energy costs on a world economy that was heading into recession, said Consumer Watchdog.
BP’s stated net profit of $8.04 billion was up 83% from the previous year and its “replacement cost profit” including inventory was $10.03 billion, up 148% from 2007. The figures generated demands in Britain, BP’s home, for more of those profits to be returned to consumers in the form of more quickly reduced energy prices.
“The outlandish profits of all the major oil companies carry the stain of the harm they’ve done, from high consumer debt to failing economies,” said Judy Dugan, research director of the nonprofit, nonpartisan Consumer Watchdog. “Oil prices have fallen by more than half, but the energy costs of just a few months ago helped push those economies over the brink. Even now, fuel and heating oil prices have not fallen nearly as far as crude oil.”
The current drop in oil prices will only temporarily shrink the oil profit march, said Consumer Watchdog. Without better controls on oil trading and refining, and more independence from petroleum, the price spikes will inevitably be repeated.
“The U.S. Congress and a new president can’t afford to take their eyes off energy costs, including oil trading practices,” said Dugan. “The drop in crude oil prices from more than $145 a barrel to today’s $64 a barrel is the best proof that the peak price had nothing to with ‘supply and demand’ and only modestly to do with the weaker dollar. It was all about uncontrolled speculation. Those who spouted the supply and demand justification, including the White House, should be put in stocks in the public square until they apologize."
Consumer Watchdog noted that BP’s $8 billion quarterly net profit was nearly as much as the $8.2 billion the company earned for the whole year in 2003, as all of the major oil companies began a five-year march of record profit level. It is five times what BP made in all of 2002, the industry’s last “down year.”
(For more historical data on oil profits, see OilWatchdog’s “Oil Profits Monster” database, a free resource on detailed profit figures since 2000, at www.oilwatchdog.org — The database takes into account all mergers since 2000.