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Rooooben t1_j2084t4 wrote

Reply to comment by Sakura365 in Exxon sues EU in move to block new windfall tax on oil companies by davetowers646

no business is guaranteed profits. The idea that they kept pricing artificially high in the name of recovering past lost profits is nuts, and it only works because we have a series of cartels monopolizing the entire trade. Any other industry would be in court for the amount of price fixing going on. Oil prices were long the same as they ever were while we paid triple at the pump. They don't have any additional costs, and the 2020 loss was well made up for by 2021, their profits exceeded the losses for 2020 and expected profits for both years.

The price of gasoline has been pure opportunism, and we are so beholden that we are afraid to address it - or they might punish us by charging even more. Unbelievable, completely captured economy.

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HildemarTendler t1_j20st8q wrote

>no business is guaranteed profits

What sucks about this is that many parts of the US government need the stock market to continue going up. Lots of things like retirement funds, futures markets, employment, etc. requires the economy to continue growing. So feeding profits to companies like Exxon helps with that, basically giving them guaranteed profits. It really sucks.

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Rooooben t1_j21486b wrote

That was a huge mistake. Getting retirement and putting them onto an investing club hoping that businesses will always increase profits, while we have contrary tax laws that push businesses to SPEND all potential profits and encourage hiring and growth. At the same time we say “oh but to fund 401k, the companies have to LOOK good so people keep “investing” their retirements. In order to do that, businesses need to extract profit and pay dividends - reducing the money that can be used instead for growth, since we don’t tax business expenses like cost of goods sold or employees (payroll tax is not the same because it’s the same for every employee, not pro or regressive like income tax).

We have two different incentives pushing opposite directions, invest money, helps our economy, or profit-taking, pleasing the investor class, but does very little for our general economy (no incentive for the profits will be re-invested at all when they can use financial instruments to multiply the invested money)

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Curious_Associate904 t1_j221qiq wrote

This is basically already a law in the US, if someone harms your potential profits through some kind of unprovoked action you can sue as anti-competitive behaviour or a slew of other US business legal statutes which would be considered wild in Europe. More or less for the reasons you mentioned too, the dependency on financial instruments means that the mechanics of those financial instruments require protection.

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SutMinSnabelA t1_j23iyzs wrote

Will be interesting to see how EU manhandles them though. They do not take price manipulation and such things well. They are just as likely to fine additional costs on top of the tax for trying to dictate their markets.

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AtomicBlastCandy t1_j25r9oh wrote

Agreed, a company could be insanely profitable but if they aren't showing consistent growth then they get hammered by Wall Street. This leads to pressure to do shitty things like offshore and lay off workers things that I find morally wrong but are considered part of a company's fiduciary duty to their shareholders.

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seasamgo t1_j20s1bd wrote

The idea of lost profits as justification for this behavior seems so dumb to me. They're not real! Just a projection of what might have been. It's like getting mad stock prices don't always go up, but things fluctuate according to everything else that takes place on this planet and that's a part of business.

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BaronSamedys t1_j21chtf wrote

Ever since the lockdown began, I've been telling the wife that the hypothetical lost earnings of covid would be recouped through price increases after the fact. I'm no conspiracy theorist, but I wouldn't be surprised if the gas and oil sociopaths made a deal with Putin to start a war so they could inflate prices and masquerade the increase behind the facade of a war. They'll pay him a fuckton of money, and he might even get to expand his territory in the name of being a complete wanker. It's a win-win for all those involved at the expense of everybody else.

It's probably more complicated, but I just wouldn't be surprised if it wasn't. All things come down to money, one way or another.

The next one will be the hypothetical lost earnings of renewable energy that need to be recouped before the tap is potentially cut-off forever.

These rats are gonna rape us for every ruble they can run away with.

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jaymobe07 t1_j20xebd wrote

i thought biden controlled the gas prices

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Rooooben t1_j215bja wrote

Yeah no they can only incentivize private businesses. Biden can push them to “do the right thing”, and help out by increasing supply, but honestly we never had a supply issue to start with - we had intentional withholding of fuel to artificially push up prices. We all know that’s how gas cartels operate, it’s in the news how OPEC decides on the price of oil, and how much they will sell, controlling the price for both economic and political pressure. All we can do is try to make the market more favorable, while Congress can take action like windfall profits tax, to discourage profit-taking and encourage reinvestment.

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WattebauschXC t1_j23v7mr wrote

Only if the prices go up.

If they go down it's good guy oil company cutting their profits for the common people.

/s

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Tom_Neverwinter t1_j2164rz wrote

Eia.gov and trumps opec deal as Republicans were happy to give them the deal....

But biden and republicans cry

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Curious_Associate904 t1_j221g9l wrote

https://en.wikipedia.org/wiki/Transatlantic_Trade_and_Investment_Partnership - If this goes through, it will mean that corporations are guaranteed profits and can sue if they don't get them. They'll be attacking using weaker versions of the same laws and they'll probably win because the whole world is corrupt as hell and the EU depends on Exxon now that Russian gas is Evil(tm).

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Rooooben t1_j22jdbf wrote

Fun. There are so many things that aren’t profitable that are good for people…the financialization of American industry is an overall negative for American citizens. As each industry turns to financial instruments instead of products (GE becoming a credit card company…Tesla selling carbon credits to make their profit margin), we decline as a citizenship - more and more products become out of reach (home ownership, medical care, decent primary education), because we have a new industry milking profits out of them.

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[deleted] t1_j21hqi5 wrote

>The idea that they kept pricing artificially high in the name of recovering past lost profits is nuts

They don't. They are price takers; not price makers. They world market prices hydrocarbons, and the producers sell into that market. What windfall profits taxes do is reduce exploration budgets, because energy companies budget for the amount of exploration that makes sense given the expected energy prices over an entire economic cycle. If we cap the profits during the good times and they take losses and break even years during the bad times, then they will reduce exploration budgets and we will have less oil during the next energy cycle.

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Rooooben t1_j21o2kn wrote

70% of US gasoline is sold in the US, and before Obama it was 100%; the world pricing is on oil, which is just as low as it’s always been, except gas is priced higher, giving a wider margin than ever before. Did they not have oil exploration in 2019? Why do we have a 10-20 percent margin up until the pandemic, now we are in 40-50% range?

Also, oil exploration isn’t really a thing these days -97% of oil is coming from existing fields using new tech, like shale. They don’t spend money to find it, they already own and know where it all is.

What they will really do with the profit is the same that every major corporation has done - pay it out via dividends and stock buy-backs, increasing shareholder value, not spend on the business, because that extra money isn’t needed - their margins are great without spending a dime extra.

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