Consumer Group Warns Of $4+ Gasoline As Chevron & Others Return To High Refining Profits In Spring ’08
Santa Monica, CA — Chevron looked like a loser to financial markets today, but even with a 24% drop in profits from the same period the previous year, its profits for the year are still running above last year’s record level. That’s due to an all-time record profit of $5.4 billion in the 2nd quarter, much of it on gasoline, said the Foundation for Taxpayer and Consumer Rights (FTCR).
“No one outside Wall Street can weep for Chevron or any of the other major oil companies,” said Judy Dugan, research director of FTCR and its OilWatchdog.org project. “The outlandish profits of recent years, almost entirely on the backs of motorists, allowed them to ignore the long-term unsustainability of their core business. They spent tens of billions of dollars buying back their own stock instead of investing substantially in renewable energy and their existing refineries.”
Chevron is conducting an estimated $15 billion stock buyback this year.
Some analysts predicted that the major oil companies’ ability to reap exorbitant profits from refining gasoline is drawing to an end with record crude oil prices and higher operating costs. But, said FTCR, the only proof of that will be in what happens at the pump, particularly next spring. National pump prices for regular jumped nearly three cents today to $2.942, according to AAA, and are up more than 73 cents a gallon from a year ago. California is at $3.224, nearly 80 cents a gallon above last year at this time.
“If Chevron and others try to regain the refining profits they reaped last spring of up to $1.00 a gallon for gasoline, motorists will be paying more than $4.00 by early next year,” said Dugan. “U.S. oil companies have done too little, too late, to expand refining capacity and level out price spikes like last Spring’s $3.23 national record, which was unrelated to the price of oil.”
To put the quarterly report in perspective, Chevron‘s drop to $3.72 billion in quarterly profit from $5.02 billion last year was its second-highest third-quarter profit ever, said FTCR. And its nine-month profit of $13.81 billion was well ahead of last year’s record 9-month take, $13.37 billion.
One interesting point:
Chevron recorded a quarterly loss of $110 million in its U.S. refining business. During the quarter the company began a new media PR campaign called “Human Energy” described by a Chevron executive in the Washington Post as costing “in the high tens of millions of dollars,” at least half the amount of the loss. The ads were widely derided as all image and no evidence of corporate citizenship. Click here for more on the ads.
For more information see: www.OilWatchdog.org.
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