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Do Golden Parachutes Send Gas Prices Sky High?

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I was surfing the net and getting my daily feed of news from around the world when I spied this on The Drudge Report: “Exxon Chairman gets $400 million retirement package.” The Drudge took me to ABC News where I read this:

Exxon is giving Lee Raymond one of the most generous retirement packages in history, nearly $400 million, including pension, stock options and other perks, such as a $1 million consulting deal, two years of home security, personal security, a car and driver, and use of a corporate jet for professional purposes.

The article says later on that this is five times higher than what Chevron’s CEO makes, the next largest oil company.

Now, I did a little math and I came to a couple of conclusions. The biggest conclusion I can come up with is we’re getting screwed here, people!

According to Gulf Oil and Gas, EXXON sold 917 million barrels of liquid oil in 2005. At 20 gallons of gas to a barrel of oil, that’s around 18 billion gallons of gas for a year. Pretty impressive numbers. That’s somewhere around $60 billion in sales at $3 a gallon!

I think what’s the most screwed up about this whole thing is that we’re not paying for the gas that the oil companies are buying today. We’re buying the oil that they paid $40 a barrel for last year! The price goes up on Wall Street and it’s immediately reflected in the price at the pump. The stuff the oil companies are buying today won’t make it to the gas station for months!

Are you getting this? They made almost two dollars a gallon profit! That’s even if I really, really screwed these numbers up, which I don’t think I did. I mean, I probably screwed some numbers up here, but not that bad; let’s just cut it in half. It’s still around $1 a gallon! That’s robbery! Think about it for a second. That’s $20 a tank of profit for EXXON if you only have a 20-gallon gas tank! Think how screwed you are if you’ve got a car with a nice 26 or 30-gallon tank.

I understand that companies need to make a profit and I don’t hold that against them, but why does this guy need a $400,000,000 retirement package? Did you get that? Let me spell it out for you…Four Hundred Million Dollars! He can’t possibly spend it! Hell, his kids’ kids can’t spend it! Not only are they giving him that monster golden parachute, they’re giving him a million dollar-a-year consulting gig!

The other thing I’m starting to notice is how the usually cheap gas stations (you know the ones, the WaWa or the Citgo or Luke Oil) that are usually cheaper than the EXXONs, Shells, and other “name brand” gas stations, are starting to show prices close to or even with the big guys all the time. I was driving up the eastern shore of Virginia a few weeks back and every gas station had the same price. Have you ever seen that before? I’m talking 150 miles worth of four lane backwoods-type roads. The prices normally aren’t too bad and they’ll vary a penny or two. I mean, the eastern shore isn’t on any list of people with too much money, but every station had the same price.

When they first opened a WaWa between my house and my work, I was pretty happy about it. In NJ, WaWa is almost always the cheapest gas you can find. When they first opened up this WaWa here, they were always the lowest around. I even went inside one day and let them know that the station down the street was lower. They lowered their price even more. Not anymore!

On that ABC link above, they quote Mr. Raymond from the hearings on the Hill in 2004. “We’re all in this together, everywhere in the world”. I’m here to tell you, someone with $400,000,000 in his bank account doesn’t have a clue about the rest of us…“everywhere in the world.”

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About Andy Marsh

  • Capitalism and the achieving of the American dream is great, however we have to understand that American doesn’t have an infinite supply of wealth, and when you get into astronomical figures for a relative few individuals, it can only come at the expense of others. It is very highly unlikely that all that wealth will be pumped back into the system.

    Congress had hearings awhile back to see if gas companies were gouging the American consumer. News reports of that just seemed to drop off the face of the earth, I can’t find out what happened. Everybody I ask just assumes Congress was paid to shut up.

    I work from home, and the one car this family shares is the most efficient we can get. Look at the SUV’s driving down the road next time you are out, and count how many of them have just one person in the car. They will always tell you the SUV is because they have to haul kids around (how in the world did America thrive before SUVs? Ah yes, station wagons, remember them?). Yet, while they need those cars to take the kids to and from school or ball practice, they also use those cars constantly to just jot to the store or wherever. I NEVER see an SUV full of people, it’s always just one lone person in it.

    I saw no news report just before the Easter travel holiday, but gas prices here jumped over 10 cents in one night, Thursday night. Just in time for the Easter holiday there was a nice spike in gas prices. It’s yet to go down too.

  • Nancy

    You got it, babe: congress was paid to shut up. Keep an eye in future on who’ll be getting Big Buck$ for their reelection campaigns. Dollars to donuts, there’s gonna be big monies channeled in to every possible legal – and as many illegal, if they can get away with it – loophole by the oil companies to various GOP hogs on the hill, as well as the party itself, to try to bail them out of an increasing groundswell of anger by the electorate. I already see oil-based spin out in the public venues and it’s not even November. They can’t afford to wait.

  • I remember those hearings SteveS…the thing I remember is that prices did drop after the hearings…didn’t last long though.

  • Nancy – the way you put it only the GOP was paid…if that’s the case, where are all your dem buddies and why are they so quiet? I know, they’re all good environmentalists and they walk to work so gas prices don’t affect them…Or is it a politician kinda thing and you just can’t bring yourself to include your party in the mix?

  • Nancy

    I presume all of them were paid, but the GOP is the party in charge at the moment, who COULD put the oil companies on the spot if they wanted to, but refused to even put the oil execs on oath, which says it all to me who the majority interest getting paid off is. Excuse that linguistic mess, but you know what I mean.

  • Nancy

    If the day ever comes when the Dems are in charge, and THEY likewise refuse to put the oil execs under oath at their hearings, I SHALL hold them up to contempt & worse.

  • Just making sure. I hold them all accountable. They’re all crooks and they don’t care about this issue because they get to expense their travel.

  • Nancy

    You DID notice they were very careful not to cut that little perk out of their lobbyist-financed goodie packages for the putative “reform” didn’t you? Also very careful to make sure that no one but themselves still has any oversight over their shenanigans. Bullshit reform, that. More like camoflage. BOTH parties are equally venal; it’s just that currently only one is really in charge, so they bear the responsibility. ALTHO, yesterday I heard some sort of point-counterpoint thing on radio with Ted Kennedy & McCaine agreeing with each other on someone Bush just appointed – the elections commissioner, or something. Thought I’d crash the car!

  • Mises

    You’re complaining about the nature of capitalism. The profit margins on oil are actually lower than those of other industries traditionally, the oil companies aren’t in control of some gauging of consumers. The market has dramatically elevated the price of oil because of increased demand from China and instability in the Middle East. Neither of these things will change anytime soon so get used to the high oil prices. It’s all about supply and demand.

  • The nature of capitalism!?!??! You know what I saw today? On my way to work the citgo station had no gas and had a price of $2.81. On the way home, they still had no gas, but the price was $2.87. These fuckers are raising prices on shit they don’t even have!!! That’s not capitalism, that’s robbery.

  • RedTard

    “The profit margins on oil are actually lower than those of other industries traditionally”

    It costs less than $10 to find and extract each barrel of oil which is then sold for $70+. Someone is making a ridiculously obscene profit with very little work, not necessarily the oil companies but the people who had the luck to be born on top of the stuff.

  • Heloise

    THE CHEWING OF AMERICA–that bites when it comes to gas prices. It’s funny that when bloggers talk about oil prices no one wants to find them and quote those.

    I found out one thing, when looking up how to take care of lawn mower, that gasoline, the finished product goes bad. In other words the gas I bought for my mower last year, and had leftover for 1.99 a gallon did not work this year in my mower. So I was advised just to put it in the car or to dilute it 3:1 with good gas.

    But that is the finished product. The unfinished crude oil probably has a longer shelf life. If they did the same thing that Heloise did last year, she only bought 3 gallons, with the crude and are now selling it for three dollars and more a gallon then this is GOUGING folks and the chewing of the American middle class goes on.

    My saga is that I can’t get a better job than the illegal aliens, who drive gas guzzlers big time, can get…

    But one more thing: what about this shit about changing the mix in midseason? What about the ethanol mix that the left wingers pushed for, but won’t give us rebates for, have shoved down our throats? More chewing of America I say.