Thursday, June 12, 2008

ExxonMobil to Sell Company-Owned Gas Stations

Heh.

Oil giant Exxon Mobil Corp. plans to sell its company-owned gas stations, saying they aren’t profitable enough even with gasoline selling at $4 per gallon.

Don’t you love it?  “Aren’t profitable enough even with gasoline selling at $4 per gallon.”  Is the reporter a moron or is he intentionally slanting the story?  The retail price of gasoline has little to do with the ExxonMobil’s profit.  When gas was selling for $2 per gallon, ExxonMobil was still making the same profit on a gallon of gas.  The reason for the increase in gas prices is NOT because the oil companies are making more profit.  It is because the cost of the raw materials and other market forces have driven up the price. 

Here’s more of the story.

The 2,220 stations make up about 1/5 of the Exxon and Mobil stations in the United States.

The nation’s largest oil company, which earned nearly $41 billion last year, says it will sell more than 2,000 stations over the next few years.

“The fuels marketing sector is a very challenging market,” ExxonMobil spokesperson Prem Nair said, adding that the company is feeling particular pressure from hypermarkets like Wal-Mart that sell gasoline.

ExxonMobil plans to sell 820 owned and operated stations as well as 1,400 stations leased to dealers. The 2,220 stations make up about 1/5 of the Exxon and Mobil stations in the United States. The company says the stations to be sold will continue to sell ExxonMobil product.

(7) Comments
Posted by Owen at 1918 hrs
Off-Duty

  1. Hey scott, do yourself a favor and don’t link yourself to this topic.

    Posted by .(JavaScript must be enabled to view this email address) on June 12, 2008 at 1940 hrs


  2. since we are dealing with a reporter couldn’t both answers be right

    He or She is a moron but also slanting the story

    wink

    Posted by .(JavaScript must be enabled to view this email address) on June 12, 2008 at 2055 hrs


  3. Don’t you love it?  “Aren’t profitable enough even with gasoline selling at $4 per gallon.” Is the reporter a moron or is he intentionally slanting the story?  The retail price of gasoline has little to do with the ExxonMobil’s profit.  When gas was selling for $2 per gallon, ExxonMobil was still making the same profit on a gallon of gas.  The reason for the increase in gas prices is NOT because the oil companies are making more profit.  It is because the cost of the raw materials and other market forces have driven up the price. 

    I think this is a view point issue.  I see the reference to $4 a gallon as cutting off the immediate question at the pass.  Essentially, making it clear to the reader that higher gas prices don’t mean that every step in the process of getting gasoline to your car isn’t turning some huge profit.

    On another note, once thing you are leaving out of your analysis of gasoline prices is the impact speculators are having on the price of gas.  The cost of production hasn’t necessarily risen to the level to justify $120 or $130 a barrel.  I recently saw that the production cost come out to around $75 a barrel, but futures are trading much higher.

    Posted by .(JavaScript must be enabled to view this email address) on June 12, 2008 at 2114 hrs


  4. My bad, you did make mention of other market forces.  Didn’t catch that the first time.

    It is because the cost of the raw materials and other market forces have driven up the price.

    Posted by .(JavaScript must be enabled to view this email address) on June 12, 2008 at 2127 hrs


  5. They aren’t making enough money their actual company is making billions but the stations aren’t making money because normally other stations around them will sell gas for less, every penny helps. I’ve been know to buy gas at the shell station across the road from a Exxon in our town then go to the Exxon just to get subway haha. Guess they are tired of using their profits to help keep these stations with low business open.

    Posted by .(JavaScript must be enabled to view this email address) on June 13, 2008 at 0619 hrs


  6. ooooh oooh :zpopcorn:

    Posted by .(JavaScript must be enabled to view this email address) on June 13, 2008 at 1032 hrs


  7. The issue isn’t the profit on gas, it’s the profit on stations. As the price of gas goes up, fewer people are willing to drop $20 at the store attached to the pumps. So most stations get hammered as the price of gas goes up and from an economic standpoint it makes sense to sell the stations if you assume high prices will last.

    Posted by .(JavaScript must be enabled to view this email address) on June 13, 2008 at 1214 hrs


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