Maybe Gasoline Prices Will Drop If Big Oil, OPEC Profits Go Even Higher

Wincing as the readout on the gas pump blurs, let me try to get this straight.

World crude oil prices officially rose to a record level on Monday because the sickly, senile, 84-year-old gasoline gangster officially in charge of Saudi Arabia finally went on to his reward. His 81-year-old half brother, who has run the oil state for the past decade, is now officially the new boss of bosses.

Congratulations.

Take my paycheck, please.

In articles recounting the Saudi change of command, I also learned that oil fires at U.S. refineries have contributed to the increased prices. Considering major oil companies have made a point of closing refineries in recent years, the fire makes only slightly more sense than the king-is-dead dodge.

Meanwhile, the House recently passed an energy bill that includes $2.6 billion in tax breaks for oil and gas companies, a gift that no one believes will result in lower gasoline prices.

I guess we should all send Big Oil a thank you card for not taking the $8 billion in reported tax breaks that were included in the April version of the House bill.

Prices rise due to increased consumption — and decreased consumption.

Prices rise when oil is plentiful — and when it’s scarce.

Prices rise in peacetime and go through the roof during a war.

Don’t believe it?

In 2004, the 11 OPEC nations, a cartel whose members include the war-ravaged loss leader Iraq, generated a record $338 billion in revenue. That’s a 42 percent increase over the previous year. Forty- two percent.

War is hell, ain’t it?

This week, Exxon Mobil Corp. announced second-quarter profits of $7 billion. That’s a 33 percent jump. Royal Dutch Shell PLC’s profits over the same period were $5 billion, and even relatively small Marathon Oil’s earnings grew 91 percent. They’re really tightening their belts and taking one for Uncle Sam.

In a recent national survey, the average price of a gallon of unleaded was $2.29. That’s up 38 cents over the previous year. And a lot of that has gone straight into the pockets of Big Oil and the gasoline gangsters.

In an entertaining new twist, lately we’re heard our gas prices have skyrocketed because the Chinese are driving more and ratcheting up demand. That’s right. A guy in Xinjiang finally gets his hands on a new Nanjing, and we instantly pay more at the pump.

Blame the poor Chinese guy — not the OPEC cartel that refuses to pump more oil to offset increased demand and return the per-barrel oil price to a more reasonable level.

Price gouging is not only condoned by the OPEC cartel, but it’s a long-standing tradition. We can argue that it serves us right for being so addicted to oil, but we can’t deny we’re being ripped off.

Oil companies pull the same trick by cutting back on their reserves. Shell, for instance, paid $150 million in fines — probably out of petty cash — for excessive fixing of its reserves.

To read the media take on this, you’d think the spike in gas prices has nothing to do with record profits and record greed, but with secondary events.

Remember when invading Iraq was going to pay the side dividend of stabilizing oil supplies and, in effect, generating many of the billions necessary to rebuilt that war-torn nation? I have that story clipped and taped to the car visor. I love a good laugh in the morning.

Now that Prince Abdullah is King Abdullah, where are our good friends the Saudis in this daily oil extortion? They’re playing a key role in making sure those profits and prices remain at record levels.

While we’re counting friends, have I been sniffing unleaded fumes, or didn’t we bail out the Kuwaiti royal family a few years ago after they were overrun by the Iraqi army?

Hey, just because we saved them doesn’t mean they can’t treat us like rubes at the OPEC carnival.

Sure, Americans are petroleum pigs who buy gas-guzzling barges on wheels by the score. But that doesn’t make the OPEC extortionists and their friends at Big Oil any less culpable. Record profits don’t lie.

We pay at the pump and on the battlefield, and the price rises every day.

John L. Smith’s column appears Tuesday, Wednesday, Friday and Sunday. E-mail him at Smith@reviewjournal.com or call 383-0295.