The award goes to the communications executives for the oil industry both here and abroad, reeling from the common perception that their rapacious greed is destroying our way of life.
Nevertheless, there is a brilliant graphic in today’s USA TODAY Snapshots, which outlines the fact that oil is “cheaper than other liquids.”
Pictured in this marvel of positioning spin are milk, trading at just a bit above the cost of a barrel of light, sweet crude, Tropicana orange juice, even sweeter and lighter at $226 per barrel, and Jack Daniel’s whiskey, which would cost you nearly $75,000 if you filled up your SUV with it.
What a bargain, then, is our current barrel of oil! Let’s bid it up a couple dollars more where it belongs! And how fortunate are we to get it at its current price! Oh benevolent oil companies who still charge so little for it!
Good work, PR guys. Seriously. Nice to see some clean spin punch through the journalistic veil for a change.
Come to think of it, doesn’t it always?
While I agree that comparing the price of oil to other commodities like milk or orange juice is rediculous, I’m still not convinced that the major oil companies deserve as much anger and hatred as they are receiving.
If you compare the total sales to the total profits for comapnies like Exxon or Chevron, their profit margin is about average for most American corporations, and significantly below many companies like McDonald’s or Microsoft. In addition, for every dollar in profit Exxon makes, it is paying over $3 to the government in the form of taxes and royalties. Sounds to me like the Federal Government is gouging me at the pump more than Exxon. (Note: Exxon’s sales for 2007 were over $400 Billion, profits were $40 Billion and taxes & roylaties paid were $120 Billion, per their annual 10-k statement filed with the Securities and Exchange Commission.)
Another thing people forget is that gasoline is only a fraction of what is made from oil. Each 42 gallon barrel of oil yield roughly 19.5 gallons of refined gas. At $4 a gallon, the $78 spent to buy that gas (even ignoring that much of the cost goes to things like transport, wages, etc. and not to just the purchase of the crude oil) accounts for 60% of the price of the raw crude oil!
The only reason that gas isn’t far more expensive is that refineries produce tons (literally) of other products from the same oil used to make our gasoline. In addition to oil, most plastics, many dyes and most of the fertilizer used to grow our crops come from that same barrel of oil. None of these products have gone up in price anywhere near as much as the oil used to make them.