Here are some facts I've gleened from the current events regarding oil.
The country's three largest petroleum companies - Exxon Mobil (XOM) Corp., Chevron (CVX) Corp. and ConocoPhillips (COP) - posted combined first-quarter income of almost $16 billion, an increase of 17 percent from the year before.
No doubt we have a Dr. Evil here...but wait...
Taken together, Exxon, Chevron and ConocoPhillips made a profit of $8.19 on every $100 in sales. In contrast, Internet bellwethers Google Inc. (GOOG), Yahoo Inc. (YHOO) and eBay (EBAY) Inc. collectively turned a $19.20 profit on every $100 of their combined revenue.
And of course, despite the outrage from our congressmen, the government sees to it that it gets its share of the windfall...
In the first quarter, Exxon, Chevron and ConocoPhillips turned over a combined $13.8 billion in sales taxes - about 7 percent of their total revenue.
This supports my claim stated in an earlier post...
Economists are perhaps most troubled by the possibility that lawmakers will consider suspending the federal 18.4-cent-per-gallon gasoline tax. All that would do is raise demand and worsen the government deficit - a lose-lose proposition, they said.
And here is a statement that affirms the logical conclusion of free markets...
Art Smith, chief executive of energy consultant John S. Herold, said $75 oil is "the best thing that could happen to the alternative energy business" and is the greatest force for change in the market. He and other analysts said SUV sales are already declining, and they expect Americans to think more critically about the energy efficiency of their homes and the lengths of their commutes in the years ahead.
We haven't seen much about this in the news yet but the cost of increases in petroleum reflected at the pump are only the beginning. Keep in mind that everything you buy is transported to the stores you frequent by rail and truck. The increased transportation costs will eventually and most assuredly appear in the price tag of the goods you purchase as transportation costs will inevitably be passed on to the consumer.
Also note that petroleum is a vital component in the manufacture of many of the products we buy today. The increase in the cost of petroleum will eventually be reflected there as well.
Sure, higher energy prices are tough to take but you don't have to be a victim. You can invest in energy companies to offset the losses due to higher prices of petroleum and related products. Another positive note is that higher energy prices enable alternative energy technologies to be developed. This, and only this, will free us from our dependency on OPEC.