Wednesday, January 18, 2012

Gas Comapny Profits

Consumers have proven that there is power in numbers.

Bank of America and others announced that they would start charging fees for debit cards. Consumers voiced their displeasure and a few days later the banks rescinded the fee.

Verizon announced a $2 fee for online and single telephone payments. Customers expressed their displeasure. Verizon canceled the fee.

In both of these instances the consumer had other alternatives. With the banks, the consumer could have gone to a different back that wasn't charging the fee or moved to a credit union. With the Verizon fee, they could have switched phone companies. These businesses can handle a few lost customers, but not a mass exit.

The rising gas prices have put us in the same type of bind. It's not like we can just go to a different gas station because they are all charging ridiculous prices. In the first quarter of 2011, Exxon / Mobile recorded a $6.3 billion profit and BP recorded a $5.5 billion profit. Texaco set a record profit of $17 billion for all of 2011.

So what can we do? What would happen if EVERYONE bought gas from only one brand? Let's say everyone only bought Texaco gas. Texaco's profits would sky rocket and everyone else profits would plunge to nothing. What would they be willing to do to increase their profits from nothing to something? My guess is they would cut their gas prices to lure consumers away from Texaco. Once Texaco sales dropped to nothing, they too would lower their gas prices.

Don't get me wrong. I am not against companies making a profit. But a RECORD profit of $17 billion while the everyday consumer is having a hard time making ends meet. I say we stand up and do something about it.