Thursday, Exxon. For outraged consumers, the staggering profit numbers boil down to this: Exxon earned 9.5 cents on every $1 of gasoline and oil sold, cashing in on skyrocketing prices at every stage of the process.
“The big money for Exxon Mobil,”says oil traderJohn Kilduff of Fimat USA, “is being made by taking crude oil out of the ground and refining it into gasoline and selling it on the street corner.”
Though consumers clearly feel gouged, are oil industry profits out of line with other industries? An oil industry ad, dubbed “Straight talk,” claims they are not, and highlights a multi-year average that is lower than current profits. In fact, the oil industry's profit margin last year was 8.5 percent — higher than the average for all industries — but less than half the profit of banks.
“Their profits rank well behind the profits generated by the financial services industry, the pharmaceutical industry and several other industries,” says Kilduff.
But consumer groups argue that oil companies are profiting unfairly from their own failure to invest in refineries, which is now driving up gas prices.
“People's budgets are being clobbered by companies who have failed to expand capacity, failed to compete,” says Mark Cooper, director of research for the Consumer Federation of America. “And then stockholders get rewarded, executives get rewarded and the people suffer.”
What about CEO pay?
Chevron's CEO received $37 million in total compensation last year. Conoco Phillips' CEO got $17 million. Those are big numbers, but experts say they are in line with Wall Street's inflated standards.
Then there's Exxon's CEO and his stunning $400 million pay and retirement package — which an industry spokesman still defends.
“One has to compare any executive's compensation with the performance of the companies that they manage,” says John Felmy, the chief economist at the American Petroleum Institute.
Oil industry officials also argue that some profits are passed on to average Americans, who invest in the companies. But critics say, in most cases, those dividends won’t begin to offset the high cost of gas — and the outrage.
Lisa Myers is NBC’s Senior Investigative Correspondent
