Wednesday, May 03, 2006

The oil see-saw

The House of Representatives has just recently passed legislation saying that it's perfectly acceptable to levy criminal penalties against energy companies found guilty of price-gouging. These penalties could end up being around $150M, which, given recently announced profits, is like fining Tom Cruise $80 for being insane. One of the most significant things about this legislation going through it that it may finally force the Federal Trade Commission to actually decide exactly what price-gouging is. And yes, this is all in light of service stations around the country being fined for selling fuel at prices deemed too low.

Come on, folks. Just like we know that the (purportedly) male half of TomKat is completely off his rocker, we know that the oil companies are engaging in inflating prices unnaturally. After all, while there is definitely an increase in the consumer base, that increase is not enough to justify and explain the ridiculous profits that these companies keep making. And these are record-shattering profits, mind you.

But does that mean that companies like Exxon will get slammed with fines, and punished for their money hungry ways? They've been investigated in the past, with nothing determined (apparently the current FTC ruling is that there has to be collusion between the companies before anything can be done). In fact, the chairman and CEO of Exxon Mobil Corp., Rex Tillerson, said about as much on the Todayshow.

"Obviously, the truth is we do not get together and manipulate prices, that would be illegal....The profit we earn is what the market gives us ... the price is set on the open market."

Funny, but to me, that language sounds a little like things we've heard before, although not from the oil companies. Something about a certain person being a decider.... and that proved itself wrong in the short run, too.

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