Bring It On!

Gas Profits Not High Enough for Exxon

Traveling the streets of your city and town and you see the prices at the pump proudly posted in big numbers at the curb where neighboring stations are almost always a penny difference per gallon in pricing. That would be simple competition at its basic form. Now travel five miles down the street where you just might see the same name brand gas station but the prices are higher or lower? Did the super tanker trailer truck from the same corporation come from a different distribution facility? Chances are that the same tanker truck delivered the exact same gasoline to both of the gas stations on the same day. Zipping over to the Washington Post you can see what Exxon thinks and how they treat their franchisees.

One of the things I found interesting in this article is the manipulative factor that Exxon has built into its franchise agreement. Every facet of the business is dictated by the Big Oil company down to the exact location as to where you the consumer will grab your favorite candy bar from. That’s no different than being the owner of a Big Burger franchise. But the Big Burger franchise do not have different prices from neighborhood to neighborhood for the same burger and fries do they?

Then there is the mega corporation making ten billion in profits per quarter that manipulates it franchise owners to such a point that supposedly only an eight penny margin is allowed by the Exxon station owner. The only ones making a sizable and excess profit on gasoline at the pump is Exxon. That still isn’t enough cash flowing into Exxon so the stations where they own the land Exxon is allegedly pushing the rental or lease fees up thirty percent simply because they can. That would be similar to those old comedy skits starring Lilly Tomlin as a phone operator where she snorts at the customers complaint and simply states “We are the phone company sir, we can do whatever we want!”

One of the only assumptions you can get out of reading the article is that Exxon sees a bigger piece of the greed pie down at the local franchise level and is slowly pricing them out of business. When one station owner is told by the Exxon district manager to leave the keys for them when they are forced out of business then the writing and business plan is on the wall. Ten billion in profit is not enough for Exxon and they want more!

Pay attention Congress! It’s starting to look like the Exxon Mobil merger was a huge mistake and the all powerful corporation born of that merger has started to eat its young to get even fatter. Time to break out Teddy Roosevelt’s big stick and break up the mother ship.

Papamoka

Originally posted at Papamoka Straight Talk