Why Are Gas Prices So High?

Why do people believe oil companies are responsible for high gas prices?

Please do not answer this with "because they do". Give me an example using economics,finance or otehr realistic testable theory to show how oil companies are manipulating prices. Mosat of your responses ignore the fact that oil companies HAVE NO CONTROL over the price of oil! It is set by the market - oil is traded on an exchange. It is near impossible for the oil companies to manipulate it! Yes, they could cut supplies to drive up prices, but then they are selling less! They have record profits because people refuse to drive fuel efficient cars and as a result the supply can barely cover the demand. So, once again, please explain how it is the oil companies fault?

Public Comments

1. Because they assume that since they are the ones selling it it must be their fault the price is so high
2. Maybe because they reported they made profits totaling billions of dollars, the biggest profit they ever had. With profits like that, then can reduce gas prices and still make millions instead of billions.
3. You are aware, I assume, that our president's family and friends are all in the oil business. Greed is the cause of the high gas prices. Possibly the reason that they get away with it is that there are people who will pay the high prices no matter what.
4. after hurricanes katrina and rita oil companies had huge amounts of damage to their refineries and drilling rigs. Yet they managed a banner year as far as profits are concerned. tell me that doesn't seem fishy
5. many people do not understand how oil is produced, who owns that oil or that oil is traded on a world market and the price is set by the buyers of crude oil not the sellers!
6. Maybe because this week in the financial section, it stated that the oil/gas companies had some of the highest profits in history. I'm quite informed and know the paper isn't always right, but the numbers don't really lie. They're making huge profits while most of us can barely afford to fill our tanks. I also know that OPEC sets the rates for the oil we import, but with those kinds of profits, I think more could be done for the consumer. EDIT: You're right, oil prices are set. However, the prices they charge at the pump come directly from the oil companies themselves. If they're making that large of a profit, it's because they have the prices marked up that much. It has nothing to do with how much of it we use. Example....if they pay $1 a gallon for their oil (yes, I know it goes by the barrel, but this is to break it down), refining it and such costs them say another $1 a gallon, that's only $2 a gallon for that gas product. However, they're charging $3 or more a gallon at most stations that's a total profit of $1 or more a gallon. That, they do have control of. Sure, it's business to make profit, but it's a profit that's hurting Americans. Most of us aren't rich and don't drive SUV's and such. It still crimps our budget just to keep gas in the tank to drive back and forth to work so that we can pay our bills. On top of that, it doesn't just hurt us at the pumps, it's costing more for groceries and any item we buy that's transported across the country. Therefore, you tell me how the profits aren't because of the oil companies.
7. .its bush its bush its bush when Clinton was in office gas never got that high i live in Indiana and its 3.19 a gallon here... we should all boy cot and see if we would get a better result i mean we are paying for a war we dont even need and people wonder why are gas is as high as it is well at least i can say i didnt vote for him:)
8. gas has been obselete as a fuel for cars and vehicles for a long long long time. The only reason why cars aren't running a safer alternative fuel for vehicles is greed and money.
9. because the top oil companies work together to maintain the prices - there is no "competition" between them. It's called a monopoly. Long live Capitalism!
10. As Cindy said they did report record profits last year. In addition to that they raise prices within hours like when the gas goes up a quarter on Friday mornings and comes down ten cents on Sunday night. The gas that is in the tanks that are in the ground at the gas stations is the same gas that was already in there. Its not like they ran out of gas, had to get a new load and with the new load a new price. It'd be like me buying a twelve pack of sodas at the store for three dollars and then selling those cans for $1.00 and $1.50 depending on how much I think people will pay for the cans. the price I paid for the cans didn't change, I'm just messing with the resale price because I think I can make a nice profit from it.
11. Think of it this way: Let's say you're buying oil, transport it, process it and sell it at the pump. Naturally, you need to be compensated for your efforts, so you charge a premium to make some money for yourself. Suddenly, because of high demand, international climate and supply uncertainty, oil now is more expensive, so you raise your prices to supposedly cover your costs and still make your regular profit. There is nothing wrong with that. Then, everyone finds out that since prices have gone up, your PROFIT "coincidentally" has gone up by a record amount. That's what happened. ALL oil companies have been posting profits (not revenues!) they've never seen before. How can we not assume that they've raised their prices disproportionately high?
12. Well I do not have my hands on their financials but I know Exxon had 10 billion in NET Profits for the last fiscal year. Prices are set by economic situations.. High prices are caused by the Refineres(turns oil to gas)...destroyed in the hurricanes and still recovering..this has cause a shortage in supplies. The enormous use through cars, jets, boats, trains etc..creates a high demand on the low supplies...thus High prices.