Daily Commentary

September 24, 2000


Why Do Gas Prices Continue To Rise?


High gas prices lift BP Amoco profit 164%
     BP Amoco posted a 164% jump in second-quarter profit Tuesday, thanks to higher oil and gas prices, better refining margins and cost savings. Earnings from Atlantic Richfield, which BP Amoco acquired in April, also contributed to the performance. BP Amoco reported a second-quarter profit of $3.6 billion, or 17 cents a share, compared with $1.4 billion, or 7 cents a share, in the year-ago quarter. USA Today, August 9, 2000

In the first part of August, 2000, BP Amoco announced a 164% increase in second-quarter profit, in part because of rising gasoline prices and BP Amoco's acquisition of Atlantic Richfield. This small bit of information was in plain view for all to see in the money section of the August 9th issue of USA Today.

This USA Today article places the acquisition of Atlantic Richfield and rising gas prices on equal parr, as if the one has nothing to do with the other, but is this the case? Could it be that the sudden rise in gasoline prices is actualy linked to the monopolization of the petroleum industry? Or, are there other contributing reasons for this that we ought to be aware of? Shouldn't the Congress be doing more to ferret out the real facts so they can do something about it? Perhaps they are.

There are a lot of unanswered questions and this author is very tired of the media, our Congress, and others leaving us in the dark. I'm also very tired of the elite taking the attitude that only they have the mental agility, intelligence, and inherited right to determine in which direction society heads when it's our lives they are toying with. It's time for each of us to ask the right questions and demand an honest answer.

Although the disussion that follows is somewhat lengthy, I believe that it is worth the read. Oil Refinery, Baton Rouge, Louisiana

Which Came First?
Chicken vs. Egg

Wasn't it sometime in the spring that gas prices began to rise sharply? The question is, does this have any connection whatsoever with the Atlantic Richfield deal? After all, besides the joining of BP and Amoco, we now have the acquisition of Atlantic Richfield. Could this explain why gas prices suddenly rose over a short period of time? In light of this report, perhaps the answer is right there in front of our eyes, if we care to see it?

As companies like BP Amoco work their political and monetary magic in the acquisition of more and more of the market, are we likely to see more and more out-of-sort price increases? If this is true of the gas industry, it is surely true of other segments of the economy.

Isn't this referred to as monopolization? I thought monopolization was a bad thing and that Congress instituted laws to prevent such a situation. What has happened to these laws that are suppose to prevent price gouging like we now see in the petroleum and natural gas industries?

What is monopolization?

MONOPOLY: Exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. (The Random House College Dictionary Revised Edition, ©1988, page 864)

So what do we have to look forward to? What's up ahead in the middle of the road? An undisclosed source with Marathon shared what he/she knows about future plans. To find out what they had to say, click HERE.


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Allan B. Colombo
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