Exxon-Mobil Selling Fueling Stations

CNN

This is yet another nail in the coffin of the conspiracy theory of price-gouging service stations being responsible for high gas prices. Even in the face of overwhelming evidence, CNN seems to cling to this naive notion, as is evident in the following sentence: “Oil giant Exxon Mobil Corp. plans to sell its company-owned gas stations, saying they aren’t profitable enough even with gasoline selling at $4 per gallon.” (emphasis added)

The price of gasoline is high because there actually is a shortage of oil (and of refining capacity). That doesn’t help retailers, which is why just about 0 of Exxon-Mobil’s record profits are attributable to corporate-run retailers. Retailers are arguably hurt slightly by rising prices because there is higher incidence of theft and cash-strapped consumers pay with credit cards, leaving retailers to eat the transaction fees. The fact that Exxon-Mobil is going to focus exclusively on extracting, refining, and distributing and pull out of retail should put an end to one of the many conspiracy theories out there. Unfortunately many consumers will still prefer fantasy to the reality that oil is finite.

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2 Responses

  1. I think at this point its a matter of allocating resources to those areas that can give the highest ROI. Stations’ margins are shrinking and they make most of their money on the convenience store part, while oil is selling at $135. It makes sense to put money into finding and developing oil at this point to keep shareholder value high.

  2. […] – bookmarked by 1 members originally found by fizik on 2008-10-17 Exxon-Mobil Selling Fueling Stations https://smashthemirror.wordpress.com/2008/06/17/exxon-mobil-selling-fueling-stations/ – bookmarked […]

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