That is what the AP would have you believe.

Why are publicly traded oil companies held to a different standard than publicly traded companies in other industries?  The decision makers at publicly traded companies have one responsibility: to maximize shareholder profit.  Oil execs are not supposed to maximize supply and minimize cost to consumers; they are supposed to enrich shareholders.  Period.

The AP writes things such as:

A 2001 study by the Federal Trade Commission reported that some companies were deliberately crimping supply during a Midwestern gasoline price spike. One executive told regulators that “he would rather sell less gasoline and earn a higher margin on each gallon sold.”

It’s as if trying to make money is a bad thing.  Keep in mind that oil companies don’t really make that much money compared to other industries.

The author at least pays lip service (at the end of the article) to the fact that individual oil companies are well within their rights to “manipulate” supply, just like the makers of popular Christmas toys could do if they so desired.

However upsetting to drivers, such tactics are usually viewed as legal. “A decision to limit supply does not violate the antitrust laws, absent some agreement among firms,” regulators wrote in one FTC report.

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This entry was posted by Brian on Sunday, November 26th, 2006 at 10:12 pm and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Please note the copyright policy.