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Who's gouging now?

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By Times staff | Friday, May 23, 2008 |

Remember the outrage the last time gasoline hit $4 per gallon?

Immediately after the terrorist attack on Sept. 11, 2001, some well-known convenience stores boosted prices above $4, bringing stinging rebukes from the public, as well as state investigations into price gouging. Attorneys general in various states considered lawsuits to allow customers to recover losses caused by the gouging. Convenience store chain owners apologized. Some agreed to pay nominal fines.

It wasn’t our nation’s best moment.

Now prices are approaching $4 again, the result, we’re told, of higher per barrel prices, a weakening dollar and Americans’ insatiable demand.

All true.

So is this: Oil company quarterly profits continue to break records, not just for energy companies, but for all businesses. On May 1, Exxon posted a $10.9 billion quarterly profit, second only to its quarterly profit reported in December 2007. Chevron reports similar soaring profits.

Outside the U.S., spring quarter profits for BP PLC spiked 63 percent over the same period last year. Royal Dutch Shell PLC reported a 25 percent increase over the same quarter last year.

Exxon shareholders have seen their investment increase 16 percent over the past year and 70 percent over three years.

Seventy percent.

Most companies struggle when they experience dramatic price increases for raw materials. Not oil companies. Fadel Gheit, senior energy analyst for Oppenheimer, told Business Week that Exxon profits — not revenues or expenses, but profits — increase $400 million for every $1 increase in the price of a barrel of oil.

Results like that make 2001 convenience store owners look like pikers.

Yet they were labeled unpatriotic price gougers.

The national disaster that began on Sept. 11, 2001, is much deeper today. What label would you affix on companies that continue to extract record-breaking profits from Americans during this time of national crisis?