LIers cry foul as oil firms post profits
Gas prices above $5 a gallon are seen on a sign at a gas station in Washington. (April 20, 2011) Credit: AP
The price at the pump wasn't the only thing going up Thursday. ExxonMobil posted $10.7 billion of profit in the first three months of the 2011, a 69 percent increase over the first quarter of last year.
"They're making too much," said Matt Howard of Farmingdale while filling up his tank Thursday at a Getty gas station on Route 110 in East Farmingdale. "They're making their money off of us."
Howard, 20, a computer programming student at Nassau Community College, said, "the government should get involved."
Gas prices went up another 1.5 cents Thursday to average $4.174 on Long Island, according to AAA.
ExxonMobil's growing profits weren't isolated. ConocoPhillips on Wednesday reported $3 billion in profits in the first quarter while Occidental Petroleum Thursday announced that it earned $1.55 billion, up $900 million and $485 million, respectively, from a year earlier. The spot price for crude oil on the New York Mercantile Exchange hit $112.86 a barrel Thursday, up from $91.55 at the beginning of the year.
Industry experts cite the weak dollar, growth in worldwide demand and instability in the Middle East as reasons for the recent rise in prices.
'One has to wonder'
"A lot of guys are saying there's $20 to $30 of risk premium factored into the market," said Rich Ilczyszyn, senior market strategist at Lind-Waldock, a division of MF Global.
"An oil company will probably tell you they're not making that much extra, but one has to wonder, if their prices are continuing to go up, they're probably making more money."
On Tuesday, President Barack Obama repeated his call to Congress to eliminate tax breaks to oil companies for domestic fossil fuel exploration and production. The breaks would average $4.57 billion annually through 2016.
Profits provide enough incentive for those companies, Obama wrote in a letter to the congressional leadership.
"We simply can't afford these wasteful subsidies," he wrote. "Instead of continuing to subsidize yesterday's energy sources, we need to invest in tomorrow's."
Obama called for better fuel efficiency and investment in alternative energy like wind, solar, biofuels and natural gas.
ExxonMobil spokesman Ken Cohen said on a company website that the tax breaks kept U.S. industry internationally competitive and prevented jobs from going overseas.
Laura Squadrito, a nurse caseworker from Massapequa Park, agreed with the president as she filled her tank at the East Farmingdale Getty station Thursday.
Call to end tax breaks
"They should eliminate the tax breaks, but they'll just put the costs back on us," she said.
Had she filled her tank a few minutes later, it would have cost even more: An employee changed the regular unleaded price from $4.11 to $4.16 just after 2 p.m.
The station raised the price because the wholesaler told them to, said owner Zubair Mundiya. He added that the station gets 5 cents per gallon profit regardless of what it costs drivers to fill up their tanks.
"Nobody's happy about the high price of gas," Mundiya said. "The customers start screaming like we control the price."
