- Yes, we all made record profits this past quarter. We are proud of this achievement and, indeed, in the future hope to surpass it. Our survival and success depends on producing value for our investors, most of whom are ordinary, middle-class Americans–your constituents, as a matter of fact–who invest in our stocks through their pension funds or 401K accounts.
Our aggregate profits are so large because we have huge sales. But our profit margins–the more relevant measure–are below the overall Standards and Poor industry average.
In a market economy, price is set by supply and demand, not wishful thinking. The price of oil has gone up because of growing demand from emerging economies like India and China and disruptions in supply due to natural disasters in North America and political instability in Latin America and Iraq. If we could collude to raise oil prices whenever we pleased, why didn't we do so last year when prices at the pump dropped to nearly a dollar a gallon? Moreover, why would the inflation-adjusted price of gas still be no higher than what it was a decade ago?
But if you are going to threaten us with additional taxes when we post profits, in the interest of fairness, shouldn't you also give us tax refunds when we suffer losses? Our refiners posted losses of more than $1 billion in 2002. Should they expect a retroactive refund?
What the oil execs should have said
Here's Shikha Dalmia: