Every time I apply pressure to my gas pedal, I feel my wallet heating as money inside burns like the gas shooting through the engine. Oil costs may be lower than they’ve been in years, but that’s no consolation for the American worker who is forced to stretch each dollar further and further while the oil industry bathes in record profits.
Most protest of the high prices gracefully bowed out as consumers adjusted to the familiar $3 gallon. But once again Exxon Mobil Corp. and Shell Oil Co. are lucky enough to absorb more hours of the American laborer’s sweat.
According to The Times-Picayune, “bureaucratic blundering” cost Gulf States $10 billion in royalties between 1998 and 2000. In attempt to relieve tax stress and encourage drilling, oil barrel royalties were waived until market price would reach $38 a barrel. This was a complete renegotiation of oil contracts, but somehow this stipulation was missing from the print.
Usually a contract is binding, and the companies wouldn’t be held responsible for the error. But considering the new contracts were implemented as an industry aid and the royalties belong to taxpayers, I disagree. Existing companies were well aware of the rule’s supposed implementation but neglected responsibility in mentioning the royalties weren’t being paid. Industries calculate finance closely and ChevronTexaco discovered this error and reported it twice before officials corrected the problem.
I can’t believe only one company noticed a flooding budget and shallow tax pool. It seems more likely that others disregarded the bill’s intention, rode the error indefinitely and stole from the tax payers who purchase their product and fuel the industry.
Then, after escaping with all this extra capital, they have the audacity to raise oil prices, continuously break records for income quarterly and blame the high prices on the people they refused to pay royalties to just years before.
When brought before Congress to explain spiking prices and raging profits, the industry released a collective statement blaming their inheritance on the American consumer. Apparently we want gasoline so badly they were forced to take more of our money as incentive to buy less of their product, a natural resource they have access to millions of barrels daily, because they can’t meet demand. This makes perfect sense considering they receive huge federal incentives for opening domestic drilling sites to decrease the dependency on importing this abundant but apparently limited natural resource.
What must happen before something is done about oil? As if one couldn’t guess, the Bush administration, among others, defended the oil companies. But if a small business owner or individual deliberately avoided or neglected taxes they were supposed to be responsible for, they’d probably be audited and forced to pay.
Price gouging is an inherent privilege of capitalism, but intervention is necessary when it’s applied to a product of necessity on mass scale. Considering the unconceivable and unfair consumer gains for oil companies, it’s reasonable to hold them accountable for rules they were aware of and avoided by technicality.
