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Originally Posted by ADL Colin
Tony, I don't get your point. How will increasing the taxes on an energy company's profits decrease prices at the pump? Or similarly, how will removing a tax break decrease profits at the pump?
Also, higher prices at the pump don't always equate to higher profits for the energy companies. The large integrated energy companies have a mixture of profits from exploration, refining margins and sales. A pretty complicated mix. Watch the "crack spread". This is the refining margin which is only $8.31 NYMEX right now. Lowest it has been in over a year. This will really have an effect on a company like Conoco Phillips.
Why not defend Exxon? What has Exxon done wrong? XOM isn't controlling the price per barrel or the price at the pump. XOM is exploring for petrol products, refining them, shipping them, marketing them and selling them at market prices. They are a well-run company. A well-oiled machine.
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You are correct...tax breaks would not affect the price at the pumps (tax increases could very well affect the price at the pumps as the oil companies do not operate at a large profit margin)...in addition I am all for tax breaks...specifically for any R&D done by the oil companies...as it will be they that develop alternative energy as they know that oil is a finite resource and will be dwindling in exponential leaps as "3rd world nations" increase their use of oil. In addition when adjusted for inflation gas prices are not much different then they have ever been.