It’s time for oil price controls

History repeats again! Oil companies have released staggering earnings. When crude oil costs rise, it drags fertilizer, feed costs, food, and meat prices with it. Plastics, homes, cars, and heating prices rise. Amidst all this, oil companies prosper suspiciously.

How is it that the cost of a raw material (crude oil) rises, people use less of the finished product (gasoline, diesel) by driving less, yet oil companies make increased profits? The operative word here is “profit,” not revenue.


Manufactures of all other products usually absorb raw material cost increases, or pass on all or part of the increase in the final price. Increased price of products reduces demand. The end result is hopefully the same profit, but may actually cause a loss.

When the price of crude rises, oil company stocks spike, while the stock of heavy users of fuel, like airlines, dive. When semiconductor prices rise, computer manufacturers stock plummet. Surely one notices increased costs for raw material translate into possible lower profits.

When crude went up in 1972, few people remember Exxon and Mobil made 500 percent and 300 percent increased profits, respectively. When crude cost dropped back several years later, the price of gas did not return to the previous level.

The News-Press (Florida)