Exxon Mobile
I sent an e-mail to Exxon Mobile a few weeks ago, shortly after they reported over 8 million dollars (or something like that) in profit and boosted about breaking their own records in profit.
Here is the e-mail I received today from them.
Dear Customer,
Thank you for your recent communication expressing concern about higher
prices for gasoline and energy products.
We recognize that energy price increases have put a strain on many
household budgets. We also know that some hold the oil and gas industry
directly responsible for these price increases — and quite frankly, this
conclusion is not correct. There are several factors that are helpful to
consider as we look at what is causing higher gasoline and energy prices.
Crude Oil
Crude oil – the world’s foremost energy source - is a true global
commodity, traded freely in markets worldwide. Prices for crude oil, which
now account for well over 60 percent of the price Americans pay at the
pump, are set on competitive global markets. No single company sets the
price for crude oil or even influences how these prices are set. Even as
the largest private energy company in the world, ExxonMobil only represents
3 percent of global oil production. We also buy nearly two times more
crude oil than we produce, as we do not produce nearly enough crude oil to
keep our ExxonMobil refineries and plants supplied. Also, our crude oil
supply costs are higher partly due to the weaker value of the U.S. dollar.
Global Supply and Demand
The market forces of supply and demand are the fundamental factors that
influence crude oil prices. Growing demand for transportation fuels, in
developing nations like China and India alone have driven demand increases
at twice the historic average in several recent years. Americans drive
around 3 trillion miles per year, almost twice as much as we did in 1980
(1.5 trillion miles), now demanding about 400 million gallons of gasoline a
day. On the supply side, geopolitical developments have curtailed
production and driven up prices at various points in time.
Industry Earnings in Context
In a high commodity demand/price environment, which currently exists,
industry earnings will generally rise. However, the oil and gas industry
profits are comparable to other U.S. industries — 9.5 cents for every
dollar of sales compared to an average of 8.2 cents for all U.S.
manufacturers in 2006. You also might find it interesting to know that 70
percent of ExxonMobil revenues are generated outside the U.S. And, with
respect to the price you pay at your local service station, independently
owned operators set those retail prices in competition with one another.
ExxonMobil owns and operates less than 900 of the 170,000 service stations
in the United States; that is less than 1 percent.
Investing in Tomorrow's Energy
In our view and probably your own as well, another important question is
what are we doing with the money we earn? In the past twenty years, we
have invested about $280 billion worldwide on capital and exploration
expenditures to develop new energy supplies -- a figure that exceeds our
total earnings over that period.
Looking ahead, the International Energy Agency has estimated that the oil
and gas industry will need to invest at least $20 trillion in new oil and
gas production and infrastructure through 2030 to meet the future growth in
global demand. Much of this projected growth in energy use is attributable
to improving living standards for billions of people in the developing
world. Only profitable companies will be able to make the investments
needed to compete in global energy markets and to develop the energy
supplies we will need in the future.
Government Taxes
Stable and impartial tax and regulatory policies are critical to companies
looking to invest on the scale noted above. You most likely are not aware
that for every dollar of ExxonMobil’s revenue, on average around 25 cents
is paid to governments, while ExxonMobil earns just over a dime. In 2006,
ExxonMobil earned $39.5 billion, but paid over $100 billion in taxes
worldwide. Over the past five years (2002–2006), ExxonMobil’s U.S. tax
bill was nearly $60 billion, exceeding our total U.S. earnings during that
time by over $20 billion. Without question, we are one of the world’s
biggest taxpayers and are therefore very concerned about the harmful
impacts of current proposals to impose even higher taxes on our industry.
Our government can help meet America’s growing energy needs by ensuring
reliable and impartial rules for all energy investments that will allow
American companies to compete internally.
Your email is important to us. We know price increases and our company’s
earnings have raised questions and deserve explanation. While we hope that
this response provides you with a better understanding of our company's
challenges and of the global energy markets in which we participate, we
would encourage you to look at our web site www.exxonmobil.com as well as
the web site of the American Petroleum Institute www.energytomorrow.org for
more information.
At ExxonMobil, we’re committed to pricing responsibly and investing for the
future. Please know that every day our 82,000 employees worldwide are
working extremely hard to provide energy supplies to consumers at
competitive prices. Again, thank you for taking the time to contact us.
Sincerely,
Ashley Galbraith
ExxonMobil Corporation
Note: When responding to this message, please use reply to keep the email
thread intact. We need to see the information on previous e-mails to
better assist you.
Thank you.
I had a friend whom sent this to me, and the thing with this is how can you compare the price of gas to many of these items? How many of us go out each week andy buy a bottle of white out, or a bottle of pepto bismol, or any of these items? Most of us are filling up our tanks every other day, or once a week. ( I only fill it up about 3 or 4 times a month because I only use our car to take the kids back and forth to school, or to run errands, now Mike fills his car up about every other day). How many times has someone brought a can a brake fluid in a year? Some of these things can't be compared to a price of gas, because most people only buy most of these things on the list a few times a year. (if that) I could see the Evian water thing, because there are many people out there that drink bottled water as opposed to tap water, but really all they have to do is go out and buy a water filter hook it up to the sink, and have filtered water, instead of buying expensive water from who knows where it comes from.
Gasoline prices...it's all relative
This is priceless!
All these examples do NOT imply that gasoline is cheap; it just illustrates how outrageous some prices are.
You will be really shocked by the last one (at least, I was)!!!
Think a gallon of gas is expensive?
T his makes one think, and also puts things into perspective.
Diet Snapple, 16 oz, $1.29 ... $10.32 per gallon!
Lipton Iced Tea, 16 oz, $1.19 ... $9.52 per gallon!
Gatorade, 20 oz, $1.59 ... $10.17 per gallon!
Ocean Spray, 16 oz, $1.25 ... $10.00 per gallon!
Brake Fluid, 12 oz, $3.15... $33.60 per gallon!
Vick's Nyquil, 6 oz, $8.35 ... $178.13 per gallon!
Pepto Bismol,4 oz, $3.85... $123.20 per gallon!
Whiteout, 7 oz, $1.39... $25.42 per gallon!
Scope, 1.5 oz, $0.99 ... $84.48 per gallon!
And this is the REAL KICKER.
Evian water, 9 oz, $1.49... $21.19 per gallon!
$21.19 for a gallon of WATER!!
and the buyers don't even know the source
(Evian spelled backwards is Naive.)
Ever wonder why computer printers are so cheap? So they can hook you for the ink. Someone calculated the cost of the ink at, you won't believe it but it's true: $5,200 a gal.
$5200 A GALLON!!!
So, the next time you're at the pump, be glad your car doesn't run on water, Scope, Whiteout, Pepto Bismol, Nyquil or, God forbid, Printer Ink!!!!!
much of the problem lays in the fact that it may only cost Exxon $20 to pump a gallon out of the ground but "SPECULATORS" drive up the cost by saying I'll pay you $70 for it hedging that "SPECULATION" is it will be worth $75 down the road etc etc... The reality is they are not basing it on actual supply and demand. They are "SPECULATING", Washington, DC I could do that. To me it amounts to a few select companies who can pump it, refine it, etc... that control this and it smells like collusion to me.
It isn't costing them significantly more today than it did 1,2,3 years ago to pump the same oil with the same pumps. Small increase I could understand but this is flat out ridiculous.
Absolutely not...no, they too should get nothing. Here's another example for you to consider...many retired people paid very little into the Social Security system yet are making thousands each year. Their rate of return on investment is astronmically stupid. Take my Mother-in-law, for example who I love dearly. She had one job in her life...for one week and had $1 withheld for social security. At the age of 65 she began getting about $500 a month from Social Security. To me, that's stupid because it wasn't earned.
What does your father in-law get from SS each month and how much did he put in?
I don't know how much he put "in". He worked for 40 years but didn't have to put in the max that many do.
Absolutely not...no, they too should get nothing. Here's another example for you to consider...many retired people paid very little into the Social Security system yet are making thousands each year. Their rate of return on investment is astronmically stupid. Take my Mother-in-law, for example who I love dearly. She had one job in her life...for one week and had $1 withheld for social security. At the age of 65 she began getting about $500 a month from Social Security. To me, that's stupid because it wasn't earned.
What does your father in-law get from SS each month and how much did he put in?
Sorry but I think that deserves WAY more than $500.00 a week....anyone that had to.....nevermind.....
Absolutely not...no, they too should get nothing. Here's another example for you to consider...many retired people paid very little into the Social Security system yet are making thousands each year. Their rate of return on investment is astronmically stupid. Take my Mother-in-law, for example who I love dearly. She had one job in her life...for one week and had $1 withheld for social security. At the age of 65 she began getting about $500 a month from Social Security. To me, that's stupid because it wasn't earned.
income tax is only one little slice, I pay a LOT of taxes. And when $800 a month last year was going to someone else I STILL had to pay tax on that $800 you say that I actually got paid. But I didn't get paid that at all.
If you get one are you going to send it back?
When was income tax instituted?
Is income tax constitutional?
I don't get one and if I did...why would I send it back when it's my money to begin with? That's the problem that too many don't understand. If you earned it...it's yours and doesn't belong to the government, nor should it be spent by someone in government who thinks they know how to spend it better than you.
In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. Withholding income tax started in 1943. I've often said that I wish the withholding system was eliminated and, instead, people would get a bill at the end of each year. People would begin to freak out over such a large bill. When most people are asked how much they make...they'll generally say whatever their "net" is rather than their "gross" income. What you earn is the gross amount...period.
Is income tax constitutional? To be honest...I don't know.
Lee, what do you think about the retired people that don't file an income tax return, but are getting a rebate, you don't think they deserve to get money back? (although they have to file one this year in order to get the rebate)
If you get one are you going to send it back?
When was income tax instituted?
Is income tax constitutional?
I work hard to support the millions of no job, no income, no education, no will to better themselves, drug addict, alcoholic, welfare recipients in our great country. But, I hope that someday they wake up and change! That is what it is for, TEMPORARY help for those who need it, or permanent help for those who deserve it.
but most times it becomes permanent help for those who don't deserve it and little to no help for those who truly need to depend on it. 2 cents
I don't mind paying my taxes because I know some social services are needed to keep a society functioning and make up the America that I love.
"some" is one thing but to have the federal government in charge of nearly everything, rather than national defense as was its created purpose, is a waste of money by those who earned it. Back in the Carter era, for example, he reduced defense spending in order to give more to poor people who were poor because they didn't work hard, chose not to do well in school and, in effect, learned how to beat the system.
Just as today...so many are getting "rebates" that have paid no income tax while those who have worked hard, were successful financially get no return. Makes sense only to liberal Dumbocrats.
It governs the world economy. It is used to punish and to reward by the countries that have it. It's fueling terrorists from near and far. Oil is evil.
It is time to stop using fossil fuels. We must start using the atom as our source of energy. Fusion and/or fision could produce enough electricity to run our whole country and it is cheap to produce. Hydrogen, water, electricity can run our transportation industry.
Federal tax dollars should only be used to pay for defense, security, health watchdog and infrastructure. We should have a graduated flat tax with no deductions and paid on gross earnings. Social security has its own tax and would be healthy today if the government would just keep their hands out of it.
I am tired of social services using tax dollars. It is wasted money with little or no return.
unc
What I do mind is when the government spends it wastefully like no bid contracts and pallets of billions of dollars going missing without a trace.
Exxon pays 41% of taxable income to the IRS which totals $27,000,000,000. That's more than the bottom HALF of ALL Americans pay to IRS. That's right, 65,000,000 Americans pay but 3%, on average, to the IRS.
Oil profits are roughly 9 cents per gallon whereas the Federal Government, not counting state and local governments, take more than 41 cents per gallon.
And yet far too many Americans complain about profits made by the oil companies when, in reality, its the Federal Government that's making so much more and not having to lift a hand to earn even a nickel of it.
Go figure.
The federal government is making money? Who do you think handles the bills that fix the roads, plow the roads, pays for police and other things we take for granted. I don't mind paying my taxes because I know some social services are needed to keep a society functioning and make up the America that I love.
What I do mind is when the government spends it wastefully like no bid contracts and pallets of billions of dollars going missing without a trace. I mind that our government prints money which in turn lessens the value of our middle class and working class wages. That is a hidden tax that increased more in the last few years than it has in decades.
And I doubt that the oil companies have such little profit margins as stated below. Oil is sold many times between the oil fields around the world and the US. Then it is sold a few more times inside the US each sale takes it's profits in turn. Also oil isn't just sold at the gas pump. It is sold in the cloths you wear and all the plastics you see around you. Start looking around your house you are surrounded by things made of oil.
Now I realize that this is a lot and roughly double what the oil companies make. Just wanted to clear up the false information presented here.
I stand corrected...thanks. Actually, (according to Wikipedia)...the U.S. federal gasoline tax as of 2005 was 18.4¢/gal and the gasoline taxes in the various states range from 10 cents to 33 cents, with an average about 22 cents per U.S. gallon, making the average combined tax on gasoline 42¢/gal.
Thanks for the correction. That the government(s) can take that kind of money when oil companies put all at risk is mind boggling. That half of all taxpaying Americans pay less in total than one company is even crazier. This is a capitalistic nation...not socialistic. Those who risk their own money, sweat equity and time deserve to hit the jackpot if they're successful. Instead, it goes to the government(s) and far too many poor people, most who did little in school or in the work place but sure know how to beat the system.
Taxes should be cut way back and a flat rate paid by all. If the flat rate is 20% then someone making 10K per year pays 2K...someone making 100K pays 20K and someone making 1M pays 200M. Seems fair to me.
Ya think?
The feds "only" get 18.4 cents per gallon, not 41 cents per gallon.
Now I realize that this is a lot and roughly double what the oil companies make. Just wanted to clear up the false information presented here.
You know what I wish? I wish there was NO Federal Withholding taxes and, instead, we all had to pay our bill at year's end. Perhaps then people might wake up and realize the huge amount of money their giving to the Federal government alone...unless, of course, you make less than 40K per year. Here's my point...
Exxon pays 41% of taxable income to the IRS which totals $27,000,000,000. That's more than the bottom HALF of ALL Americans pay to IRS. That's right, 65,000,000 Americans pay but 3%, on average, to the IRS.
Oil profits are roughly 9 cents per gallon whereas the Federal Government, not counting state and local governments, take more than 41 cents per gallon.
And yet far too many Americans complain about profits made by the oil companies when, in reality, its the Federal Government that's making so much more and not having to lift a hand to earn even a nickel of it.
Go figure.
Somewhere there is a breakdown of profit shares of a gallon of gas. The biggest by far is taxes.
The next time Clintbama bleats about gas prices, ask them when they are going to lower the gas tax. They're both senators, they could draft the bill today if they wanted to.
i fill up about every 7 trips back and forth from work.