In 2012, Chevron made $26.2 billion in profits. Exxon, $44.9 billion. Shell, $26.59 billion. At today’s prices, that’s enough to buy almost 25 billion gallons of gas in California.
Last year, Americans paid record-high average gas prices, a fact that is certainly linked to the oil companies’ massive profits.
How much did Americans spend on gas? From the U.S. Energy Information Administration:
Gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4% of income before taxes, according to EIA estimates. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures.
Four percent of household income went to gasoline in 2012. But here’s the kicker:
U.S. gasoline consumption fell in 2011 to 134.2 billion gallons, its lowest level since 2001. However, at the same time, EIA’s average city retail gasoline price rose 26.1% in 2011, and another 3.3% in 2012, when it reached $3.70 per gallon. The effect of the higher prices in 2011 and 2012 outweighed the effect of reduced consumption.
We are paying more for gas even though we’re using less. Allowing just three oil companies to rake in nearly $100 billion in profits.
Hat-tip: Ed Crooks.