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      06-25-2008, 10:57 AM   #45
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Quote:
Originally Posted by CAMike View Post
My point was not why prices were high but rather the profit being made and the negative effect upon the economy because of the prices. Looking long term it seems to me like reducing profit margins to increase sales would result in overall increased return as oppossed to the current model of reduced demand because of higher prices...
A major reason you see such large profit numbers is due to the fact that we all use a lot of gasoline.

If some small mom & pop store charged $1.00 for something that cost them $0.99 they'd go out of business in a month because they couldn't afford to pay their bills. If someone sold the same product at the same price to every person on earth a thousand times over they'd make well over a half a billion dollars. Now, people are obviously making more than 1% but the margins reported are in line with a lot of buisnesses and a lot lower than the margins you see in some other industries.

And how far will gas need to go down before you're content? $0.10, $0.50, $1, $2, more? I tend to believe people want it to go down at least a $1/g if not more but there is no way you're going to see even a significant fraction of that difference by simply cutting the margins - there are just too many hands taking a few % here and a few % there to make a viable solution out of lowering any single %.

If you truely want less expensive gasoline there are several things that can be done, most of them political.
If, on the other hand, you're simply looking for someone to blame so everyone can feel better without actually solving the problem then go right ahead and blame oil company profit margins.