Matt & Erin break down our "magic" oil costs!!

For a $4.10 gallon gas:
Crude: $3.00
Refining .40
Distr. .20
taxes .40
station .10

Like Steven Colbert noted... All that profit is magic!

Why, you'd think the oil companies were just breaking even on a gallon of gas with those numbers!

Yet magically, they somehow squeeze several billion dollars a quarter out of that calculation.

It is magic!

Their obscene profits come from the difference between their REAL costs and what they charge us.

Top line revenue: $404,552,000,000 (all monies collected)
Cost of Revenue: $(232,852,000,000) (cost of raw materials)
Gross Profit: $171,700,000,000 (profit before expenses)

Expenses:
SG&A: $(87,571,000,000) (selling, general and admin costs: payroll fits in here as do benefits)
Other: $(12,250,000,000) (equipment depreciation = equipment is worth less this year than last year - like your car)
Operating Income: $(71,879,000,000) (profit before interest and taxes)

Interest Expense: $(400,000,000) (they have loans just like us, in their case ~$25 billion)
Income Tax: $(29,864,000,000) (self explanatory = all taxes: federal, state, local; taxes in foreign countries etc)
Minority Interest $1,005,000,000 (other than the text book definition I am not sure what this is)

net profit: $40,610,000,000 (profit after all expenses are factored in)

Net profit margin: 9.96%. IOW: every $1 spent returned $0.10

(the rest of this is eye glazing but kind of important)

Now when you go to the cash flow statement, you'll see a paper increase of available cash bringing the total up to $52,002,000,000 (a lot of the "Operating Activities, Cash Flows Provided By or Used In" category is not "real" cash money but a function of accounting charges and credits - take an accounting course if you want to go deep into those). In "Investing Activities, Cash Flows Provided By or Used In" category: XOM bought $15,387,000,000 in capital equipment (long term equipment: computers, drill rigs, buildings etc) and made $8,808,000,000 from investments and lost another $3,149,000,000

Now if you go to the cash flow statement, you'll see that of that $52,002,000,000: $7,910,000,000 was returned to stock holders in the form of dividends (individual investors, mutual funds (also owned by individuals), pension funds (paying out to individuals)), $31,402,000,000 was used by the company to buy back some of it's stock (a common practice), a few miscellaneous additions, leaving XOM with $5,737,000,000 in cash and cash equivalents (either stacks of $$$ in a vault or other, quickly converted to cash instruments).

In essence, while this company has massive revenues ($404,000,000,000), they also have massive costs: $360,000,000,000 so while, from a raw dollar amount, they make a shit pot of money, as a function of return on investment, there are a lot of companies that do a boat load better:

Adobe Systems Incorporated
Apple Computer, Inc
Coach, Inc.
Colgate-Palmolive Company
Danaher Corporation
Qualcomm
Stryker Corporation

all have higher profit margins than XOM.

Now on final point, according to the California state government's energy site (http://www.energy.ca.gov/gasoline/margins/) here is the breakdown:

Distribution Costs, Marketing Costs and Profits $0.12
Crude Oil Cost $3.22
Refinery Cost and Profits $0.53
State Underground Storage Tank Fee $0.01
State and Local Sales Tax $0.34
State Excise Tax $0.18
Federal Excise Tax $0.18
Retail prices $4.59

other than the oil costs, the folks who make the most money out of a gasoline transaction are the various government entities: $0.71/gal (or 15% of the total).

AHAHAHAHAHAHAHAH!!!

Shell, maybe.

At the stations I ran in the past, in any given month if we we averaged 3 cents over what we were charged by the distributor, we were lucky. At times we sold for fractions of a penny over distributor cost.

they can no longer afford the credit card fee and can not raise the price of the merchandise to cover costs.