Peeved at Prices? Don't Blame the Dealer

[cal04]

Awash in Profit, Exxon Fights for Pennies While Raising the Rent
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/24/AR2008052401961.html?hpid=topnews

Every time Sohaila Rezazadeh rings up a sale at her Exxon station on Chain Bridge Road in Oakton, her cash register sends the information to Exxon Mobil's central computers. If she raises the price of gasoline a couple of pennies, chances are that Exxon will raise the wholesale price she pays by the same amount.

Through a password-protected Web portal, Exxon notifies Rezazadeh of wholesale price changes daily. That way the oil giant, which is earning about $3.3 billion a month, fine-tunes the pump prices at the franchise Rezazadeh has owned for 12 years.

Now, however, Rezazadeh says she cannot stay in business. Credit-card fees are eating her profit margins. Exxon, which owns the station land, last week handed Rezazadeh a new lease raising her rent about 30 percent over the next three years. She stuck a copy on the window of her station to show customers who are angry about soaring pump prices. Rezazadeh has told Exxon that she cannot make money with the rent that high. Her territory manager's reply, she said, was simple: When you go, leave us the keys.

(snip)
"Why is the government giving Exxon subsidies and tax breaks when they're making billions of dollars and when they squeeze every dime they can out of every dealer who made that profit for them?" Burnham said.

[Tandalayo_Scheisskopf]

1. The oil companies are greed junkies.

They are incapable of stopping themselves now. They are out of control. They deny their behavior. An intervention is needed.

[unblock]

2. it's absolutely absurd that THE MOST PROFITABLE enterprise is such a basic commodity

invention, innovation, advancements in technology, saving lives, no. not profitable enough.

doling out a basic commodity -- there is nothing of significance to distinguish your gasoline from a competitor's gasoline -- THAT'S worth record-shattering profits.

there's too much collusion and political/military power at the hands of these bastards.
basic commodities should earn a consistent and boring 8% roi. the risk takers should be earning the premiums.

where's the risk in pumping oil at what, $30/bbl and selling it at $133/bbl?

[hootinholler]

3. Gas has been a loss leader for years here.

The 'service' most stations use to set pump prices is so very close to price fixing that it should be outlawed.

The parent company is making the profits selling itself crude, which are incorporated in the price of gas/diesel, so they can claim with a straight face they are not making money from gas, because of the price of crude. The distributors are screwn, caught between an angry public and a merciless master.

-Hoot