Just took a small photography gig working on a project for Chevron. The day I started working on the project I read that Chevron reported $5 billion in profits for the first quarter of 2008. Looking at the $4 gas prices at the pump my first reaction was one of disgust, for Chevron’s apparent greed, and myself for working for them. It seemed pretty obvious that someone was making out like a bandit, a blatant case of price gouging by a greedy multinational corporation at the expense of the average american.

Then a friend sent me an article published today on Salon.com that breaks down the price of gas and it seems it’s not so simple. While Chevron is making record profits for drilling oil, there profits from refining and retail sales are actually down from last year.
According to the article, Chevron is not really responsible for price gouging because they don’t actually set the prices for crude:

In 2008, Chevron recorded its largest first-quarter profit ever: $5.17 billion. But according to the San Francisco Chronicle, Chevron’s profits from refining and selling gasoline in the United States were actually down 99 percent in the first quarter of 2008 from a year earlier, and “during the previous two quarters, the company actually lost money making gas.” That $5 billion in profits is derived primarily from extracting the oil out of the ground and selling it on the open market where prices are set.

The knee-jerk liberal in me wants to look at gas prices and blame the greedy corp. What the article concludes is that the real problem is the worldwide addiction to oil and the growing demand.

Hmmm, I did drive to the Chevron photo shoot even though it’s only 3 miles from my house.

LINK

p.s. Got this shot of a great remix of their carwash sign:

p.p.s. NYTimes just ran a story on how many gas pumps dials are burning out from rolling so fast and that many price read outs aren’t designed to go over $3.99. They are having to result to charging by the half gallon.