Oil major BP on Tuesday reported a nearly 70% year-on-year drop in second-quarter profits on the back of weaker fossil fuel prices, echoing a trend observed across the energy industry.
I’m sure they will somehow screw the average citizen to make up the money, or complain to the government.
Like Shell, BP has attracted criticism in recent months for watering down its climate commitments. In 2020, the company committed to become a net-zero company “by 2050 or sooner,” then said earlier this year that it would scale back plans to cut carbon emissions by reducing its oil and gas output.
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The relative drop in oil prices is, exactly, the reason. In general, oil companies’ profits are spiking up because the ground is running out of oil, so instead of reinvesting in refineries and extraction equipment, they’re able to just keep all the money. I heard it referred to as “the party at the end of the world” - basically that’s why their profits are sky-high compared with what they’ve been historically. On top of that, last year, they had the luxury of super-spiking oil prices as well, but the oil prices have gone back down, so their profits have shrunk back to being merely conventionally obscene.
Average price of gasoline in the US in July of 2019 was about 2.80 per gallon. In July of 2023 it was about 3.60 per gallon. This is about a 27% difference.
Based on official us inflation rates (CPI) in 2020, 2021, 2023, but only through march of 2023 the price would be 3.40 per gallon. That isn’t that far off, especially when my calculation is missing inflation data for 4 full months.
tl;dr This is what inflation does to a mf’er. $3.70 to 3.80 is almost certainly the new normal, it won’t be going down unless the US economy experiences deflation.
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