Despite 2/3 Drop in Crude Oil Prices, Oil Giant Boosts Bottom Line With Refining Profits
Santa Monica, CA — Exxon Mobil’s first quarter profit of $4.55 billion dollars is small only by comparison to the last six years of nearly continuous profit records, said Consumer Watchdog. Its first quarter profit is more than $1 billion above what it made for the period in 2003 and about the same amount below its profit in 2004, the first two years of a boom that lasted until the current quarter.
(See yearly and quarterly profits for the five major integrated oil companies at OilWatchdog’s "Oil Profits Monster" Database.)
“The stock market may not like lower Exxon profits, but they only show what normal looks like,” said Judy Dugan of the nonprofit, nonpartisan Consumer Watchdog. “Consumers whose wallets have been drained at the pump, and businesses left deep in debt by high fuel and energy prices, can only hope for continued relief.”
It is notable that Exxon’s profits on refining (downstream) operations were nearly equal to last year’s, meaning that its percentage profit per gallon at the pump was higher, said Consumer Watchdog. Consumers are still providing a lopsided portion of Exxon’s profit at the pump.
Exxon is also still buying back billions of dollars worth of its own stock, essentially filling a piggy bank many times larger than its $25 billion of cash on hand would indicate. Its $7 billion buyback in the first quarter and planned $5 billion 2nd quarter buyback continues an unproductive use of money, said Consumer Watchdog.
Its investments in renewable energy remain essentially nil.
“Exxon seeks to persuade investors that its oil-and-only-oil way of doing business is conservative and safe,” said Dugan. “Yet with a low-carbon future becoming a reality, Exxon refuses to be part of the solution by spending some of its hoarded billions to make that future cleaner and cheaper. The difference between Exxon and a buggy-whip manufacturer in 1909 is that buggy-whip factories didn’t pollute the world.”
Consumer Watchdog has backed proposals to eliminate taxpayer subsidies for major oil companies, including a White House proposal to tax oil produced in the Gulf of Mexico to compensate for oil royalty relief mistakenly granted in federal contracts in the late 1990s. Today’s lower profits are no reason to continue those and other subsidies, including offshore profit schemes, said Consumer Watchdog, because the oil companies remain awash in cash in comparison to other major industries.
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