The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Oil Refiners Take the Money and Run

Sep 19, 2011

Oil refinery profits are sharply up almost everywhere around the country, but particularly in the Midwest. This may seem odd since the economic crisis that has hit parts of the Midwest particularly hard has caused demand for gasoline, diesel fuel and many other refinery products to drop off.

What’s happening is that Midwestern refineries are paying about 25% less for the crude oil they process compared to just four months ago. But they have reduced the price they charge for the gasoline they make by only by about 10%. And they are pocketing the difference to boost their profits way up.

Keeping energy prices up this way increases the price of almost everything else, too. So retail sales fall more, big corporations cut back more and small businesses fail more. It drives the economy even further down.

One oil industry analyst admitted this might not be good, but said, “It’s how the economic system works sometimes.”

Yes, but the bosses’ lust for ever more profits is also why the whole economic system is not working for the rest of us right now, too!