Blame government, not 'big oil'

I read with utter amazement the totally inaccurate letter of June 21 titled "We must rein in big oil companies" and the citing of simply ridiculous statistics that obviously were made-up to suit the writer's point.

Some facts:

So called "big oil" owns virtually none of the oil in the ground. The Arabs own a lot of it, as do Venezuela, Mexico, Russia, Europe, Asia, Austral-Asia, Africa, etc.

So called "big oil" is owned by stockholders, such as ordinary people like me, labor union pension plans, mutual funds, etc. There is no evil "czar" or "king" raking in personal profits.

All businesses exist to make a profit and in capitalist America, it's not sinful or wrong to make a profit. That attitude instead prevails only in a the minds of left-wing Socialists. Profit must be made and utilized to run the business, pay salaries, pay for benefits such as health care and retirement plans, pay dividends to stockholders (owners), modernize refineries, explore and drill for oil, pay for maintenance, etc.

"Big oil" does not set the global market price of oil. It's set by market forces (supply vs. demand) and oil owner manipulations (like OPEC quotas).

At a market price of $130 for a 42 gallon barrel of oil, the "raw material cost" of the crude oil is $3.095 per gallon. At $4.25 per gallon of gasoline, raw material cost represents 73 percent of its selling price. Average "gross profit" per gallon of gasoline is approximately 60 cents per gallon, for which "big oil" has to pay approximately 25 cents (42 percent) in Federal income tax. "Big oil's" gross profit after Federal taxes is approximately 35 cents from a $4.25 per gallon selling price, or approximately 8 percent. Gross profit numbers are huge because the gross sales amounts are huge.

State and excise taxes per gallon of gasoline comprise about 60 to 70 cents per gallon. Combined with the 25 cents federal income tax per gallon paid by "big oil" on their gross profit, the total gross taxes paid is approximately 85 to 95 cents per gallon. Why don't the politicians tell you that fact?

Government gets almost three times the profit "big oil" gets per gallon of gasoline.

Most importantly, our federal government, with its mindless, unlimited deficit spending has depreciated our once almighty dollar to a fraction of its previous value. Global crude oil is priced in now pitifully weak dollars, so since 2000, crude oil pricing has quadrupled in dollars.

So instead of uninformed critics clamoring to "rein in big oil," they need to convince our clueless government officials their endless deficit spending and complete lack of serious synthetic fuels, oil shale, tar sands and alternative energy development projects, plus their lack of common sense regarding the nonsensical ethanol boondoggle and immediate access to domestic offshore and Alaskan crude oil reserves are the real reasons we will all suffer in the years to come.

Albert J. Dzermejko

Gilberts