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Gouged 

Common sense says, yes, Big Oil is ripping us off

Ever get the feeling you're being ripped off? Like, maybe at the gas station? Maybe you steam about the price while you're pumping, but you get home and the people on the TV news say it can't be helped, it's due to the hurricanes. But didn't they say the other day the oil rigs weren't as damaged as they had thought? Oh, then it must be the pipelines between here and the Gulf. Or maybe it's -- my favorite -- a "market reaction to Katrina and Rita." Here's what that phrase translates to: "This tragedy give us oil companies a great chance to price-gouge, so let's go for it!"

I'm here to tell you to trust your instincts. You're right -- you and I, all of us, are being ripped off. I don't have the minutes of secret oil company meetings, or pilfered memos; but the Big Oil guys are so blatant you don't need those kinds of things to know they're price-gouging. All you have to do is look at their production and profit figures, use your common sense and your bullshit detector, and it becomes obvious the most serious post-Katrina looting is still going on.

Not that oil companies needed a disaster to pick your pocket. If you remember, gasoline prices were already rising at a fast clip before the hurricanes hit, with US prices rising 14 percent just from July 25 to Aug. 22, according to figures from the Department of Energy's fueleconomy.gov website.

For months, the consumer group Public Citizen has been pointing out that it's become a lot easier for US oil companies to price-gouge since the past few years' mega-mergers consolidated control over refining and marketing -- a conclusion that was confirmed by the US Government Accountability Office.

OK, so it's easier for Big Oil to price-gouge. Does that mean they're doing it? Not necessarily, but come on, this is where common sense comes in to play. Consider the following:

First, oil companies have a long history of price-gouging -- it's there in black and white in the numerous lawsuits, congressional hearings, US Federal Trade Commission findings and media investigations over the years.

Second, the oil industry, not content with just having fellow oil men in the White House, has given over $105 million in contributions to Washington politicians during the last four congressional campaigns, according to the Center for Responsive Politics. If you think they did that out of concern for the public welfare, there's a bridge in Brooklyn they want to sell you, too.

Finally, as Tyson Slocum, Research Director of Public Citizen's Energy Program, told a US Senate committee last month, "The evidence is in the numbers."

Slocum pointed out that the share of the price of gas that's charged by refiners and marketers went up 30 percent in the past decade. "This translates to an increase in US gasoline prices of $55 billion, the amount by which US consumers have been price-gouged," he said.

Then Slocum delivered the revealing kicker: "In 1999, US oil refiners made 22.8 cents for every gallon of gasoline refined from crude oil. By 2004, they were making 40.8 cents for every gallon, a 79 percent jump."

It's no coincidence that oil company profits have hit record highs; in the past four years, for instance, BP's profits went up 68 percent. Keep in mind this was going on before this year's round of gouging.

What burns my butt is how every time high gas prices are mentioned, somebody brings up Europe. "In London and Paris, they're paying almost $7 a gallon," they say. "We've got it made." Yeah, right, we've really got it made. The reason European gas prices are so high is because they impose heavy gas taxes which then help build the most efficient, and widely available, public transportation and train systems in the world. Which, duh, means Europeans don't have to drive as much or buy as much gas.

If we've got it made, explain why we're paying $3+ per gallon in a country that produces almost half of its own gasoline when in some other oil-rich countries, specifically Iran and Venezuela, citizens are paying, respectively, 40 cents and 15 cents per gallon -- 15 cents! Even the Iraqis pay only about 25 cents for a gallon of gas, when they can get it.

In the US, we let our passenger train transportation deteriorate while we pumped money into a humongous highway system; it's too late for the European model even if we tried. Since we're stuck with the transportation system our wise leaders have devised, it seems reasonable to expect the government to take action to make sure Americans can afford to use that system. Hit the oil companies with a windfall profits tax. Require auto companies to improve fuel economy; if, as usual, they claim it's too hard to do, make them copy the French and Germans, since they seem to know how. Use anti-trust laws already on the books to break up ExxonMobil and other oil mega-corporations. Just do something.

None of this addresses the problem of conservation or alternate fuels, of course, but maybe that's for another column. For now, the fact is we're being gouged by Big Oil. And our government -- you know, that "of the people, by the people, for the people" thing -- is not only not working for our benefit, it's the gougers' working partner.

john.grooms@cln.com

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