The Tyranny of Oil: Antonia Juhasz on Oil’s Reach

March 19, 2022

Exxon Chair/Trump’s first Secretary of State Rex Tillerson with friend.

Antonia Juhasz on Twitter:

Alright folks, here’s a little lecture from my book, The Tyranny of Oil, about how #gasoline prices are set in the U.S., and yes, it’s largely under the control of the largest oil companies — Exxon, Chevron, BP, Shell, etc, — even though it’s not legally supposed to be. a 🧵 

1. The major oil companies in the U.S. are vertically integrated, controlling production, refining, & sales.

2) They set the price of #gasoline at stations they own. But most stations are “independently owned” & branded- ie selling the major brands “Exxon” “Shell” “Chevron” etc. 

3) It is illegal for oil companies to set prices at gas stations they do not own, but they’ve has found several ways to get around the law—by controlling the prices charged at its branded stations through the wholesale price for gas, “suggested” retail prices, & zone pricing.

4) The wholesale price is the price at which the gas station purchases its gasoline from the oil company. Big Oil sets the wholesale price of all gasoline sold to its branded dealers. 

5) Setting the wholesale price allows Big Oil to establish a vise around the price branded gas stations can charge and a lock on the profits from higher retail prices. 

6) The price we pay at the pump is the wholesale price (going to the oil company) + a tiny margin, usually just 3 -10 cents per gallon. These pennies per gallon are the ONLY profit the gas station owner receives. Their money is mostly off of the convenience store, not the gas. 

7) Beyond merely setting the wholesale price, it is common for oil companies to “suggest” a retail gas price to all dealers selling its gasoline. In an attempt to avoid charges of price-fixing, these “suggestions” are usually given verbally by oil company representatives. 

8) By the way, the 3 to 10 cents per gallon that goes to the gas station owner generally remains constant regardless of the retail price. Thus, all of the profit for higher gas prices goes to the oil company and pretty much never to the gas station owner. 

9) Antitrust law makes it illegal for companies to sell wholesale products at different prices to “similarly situated retailers.” To get around the law, the oil companies have developed extremely complex zone-pricing systems to differentiate between retailers in the same area. 

10) & they take advantage of high oil prices via the “rockets and feathers” phenomena: as the price of oil rises, the price of gas immediately shoots up (often out of proportion). But when the price of oil falls (as in the last week), the gas prices take a lot longer to catch up. 

11) We have many laws to address all of these phenomena at the Federal and state levels, including laws against price-gouging, “unethical pricing,” and anti-trust laws against collusion among oil companies in setting the price of gasoline. 

12) Thus, U.S. oil companies could be asked to limit gasoline price spikes to demonstrate a desire not to profit off of #RussiaWarOnUkraine. Alternatively, they could be told not to pass the price spike onto consumers by federal and state governments. 

13) But Americans pay shockingly little for #gasoline compared to other nations–a reason why we’re the largest global consumer of gasoline, with devastating impacts to human health, the environment & climate; also leaving us at the mercy of fossil fuels & those who control them. 

14) And consumption isn’t equal: wealthier Americans & industry consume the lions-share of #gasoline (& are able to afford higher prices). So, lower prices aren’t the end goal. These are: to stop manipulative pricing & war profiteering by Big Oil, and transition off fossil fuels. 

Newswire:

TORONTO, March 18, 2022 /CNW/ – Soaring gasoline prices and vulnerability in oil supply have convinced three in five Canadians that it’s time to buy an electric vehicle and more than half say they “will never buy a gas-powered vehicle again,” finds a new poll by KPMG in Canada. Almost a third (30 per cent) regret not having bought an EV already.

“The poll results show that rising fuel prices are a big catalyst in changing Canadian attitudes towards EVs,” says Peter Hatges, National Automotive Sector Leader, KPMG in Canada. “Canadians were already on edge about the spike in inflation and are now afraid soaring gas prices will make it impossible to balance their budgets. Buying an EV will allow them to take some control by reducing their fuel and maintenance costs.”

Six per cent of 1,005 Canadians surveyed had ordered an EV in the past month – representing a 50 per cent increase in the share of EVs sold in 2022.

Key Poll Findings:

  • 61 per cent of Canadians say soaring gas prices and vulnerability in oil supply have convinced them it’s time to buy an EV 
    • 18 per cent say it “solidified” their decision 
    • 24 per cent say it “greatly influenced” their decision 
    • 19 per cent say gas prices changed their mind; they weren’t considering an EV before and now they are
  • 47 per cent say they “are buying an EV or a plug-in hybrid EV (PHEV) right away” even though it might take a year before they receive it due to supply chain snarls 
  • 6 per cent of Canadians say they “just ordered an EV in the past month” 
  • 51 per cent say they will “never buy a gas-powered vehicle again” 
    • This jumps to 63 per cent in British Columbia and 60 per cent among 25-to-34-year olds and 68 per cent among 18-to-24-year-olds
  •  Almost a third (30 per cent) regret they didn’t already buy an EV 
    • 36 per cent in British Columbia and 32 per cent in Ontario
    • 43 per cent of those aged between 35-to-44 years old 
    • 39 per cent of those likely to buy an EV the next time they’re in the market for a vehicle regret not having already bought one 
    • Over half (52 per cent) of those buying an EV right away regret not having bought one sooner
  • Nearly half (48 per cent) say they are “definitely buying an EV” because they “don’t think gas prices will ever normalize again, especially as economies transition off oil and gas” 
  • Only two thirds (66 per cent) say they are looking at all of their driving habits to conserve gas, such as driving 90 kilometres per hour 
  • 72 per cent agree that current gas prices are “an impetus” for automakers “to hurry up and start making more EVs” 
    • 74 per cent agreed in Ontario, B.C., and Quebec
    • 81 per cent of those planning to buy an EV the next time they buy a vehicle agreed

This new poll supports the findings from KPMG’s earlier EV survey this year that explored EV adoption and consumer concerns, with 72 per cent of Canadians saying they will consider buying an EV the next time they’re in the market for a new vehicle.

3 Responses to “The Tyranny of Oil: Antonia Juhasz on Oil’s Reach”


  1. From a system standpoint, it’s high time anti-trust laws against the fossil fuel giants were either enforced or strengthened. They helped to set up this price jump by harming fuel efficiency standards, attacking EV adoption, attacking wind, water and solar energy, denying climate change and promoting denial, and finally colluding to limit production and create artificial scarcity. All the policies they fought in Congress (primarily through GOP) would have helped to dampen the most recent price spike. But the systemic issue RE price gouging and market manipulation remains.

    For my own part, it is liberating to own an EV. I can tell the oil companies to take their price gouging and their oil wars and shove it. But I’m just a small fish in a big pond. I want more people to have access to an EV if they want one. That’s a big reason why I support Build Back Better.

    • rhymeswithgoalie Says:

      I had no idea what it would be like to own a Leaf in 2014: What struck me was that in less that two weeks of driving it, I had come to see combustion vehicles as barbaric.

      Also, I’m a leadfoot who appreciates the responsiveness of electric motors.


      • It’s so liberating not to have an oil change, to not have various crud continuously leaking into the street or driveway, not to have the stench of combustion or gas stations constantly wafting about. The smooth acceleration. The lack of engine noise. The increased sense of healthiness and well being. The removal of lost time doing oil changes. I agree. The ICE is barbaric.


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