Chevron Memo Raises Suspicion

[smokeman]

SACRAMENTO, Calif. - A Chevron memo is raising suspicion that oil executives intentionally reduced refining capacity in an effort to boost profits. The 1995 memo, obtained by Consumers Union, reads:
"If the U.S. petroleum industry doesn't reduce it's refining capacity, it will never see any substantial increase in refinery profits."
In the last 20 years, 18 of California's 32 refineries have shut down. The industry is now seeing record prices and profits at the pump.

http://www.msnbc.msn.com/id/12652455/

I seen the wal mart thread was heading this way,,so i just opened a new thread here... They are ripping us off and there is really nothing to do about it....Unless we all want to stop buying gas for a while,,But thats not goanna happen...

[Briman]

No conspiracy here, its more of a no brainer. The same applies to all industries. Business leaders have found that reducing inventories, implementing Just In Time, Kaizen, World Class Manufacturing allows them to stay competitive in the market and make bigger profits.

[Cougar Mag]

The same applies to all industries. Business leaders have found that reducing inventories, implementing Just In Time, Kaizen, World Class Manufacturing allows them to stay competitive in the market and make bigger profits.

Comparing manufacturing of product to refining oil is a terrible analogy. Building cars and making gasoline for sale is totally different.
Lean Manufacturing leads to larger profits because of reduced inventory and only keeping enough labor on hand to reach quotas. But those larger profit margins are not because of higher retail prices placed on the consumer unlike oil companies who are setting record profits due to higher gas prices. On the other hand using the theory of "Just In Time" to making gasoline could create higher gas prices in times of higher demand and lower supplies. Creating lower supplies of gasoline to enable raising gas prices is nothing more than price gouging.

[kevin1]

JIT also gives the oil refiners an occasional "shortage" when a truck full doesn't make it to the refinery on time . The ripple effect of that can spread far up the supply chain causing prices at the pump to spike . Reducing inventory to keep prices high is nothing new , OPEC has been doing that since their inception .

[Deleted User]

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[Canuck_Buck]

too bad there wasn't more refineries being built...

world pricing affects everyone not just north america...

why should we have to pay world prices for our own resources? Foreigners buying our oil/gas yes, but not ourselves...

The price of gasoline in Iraq is what ? 10cents a gallon ?

[BenGarrett]

This is not the first time such memos have been uncovered. How about the Texaco memos from 1996 that were uncovered in 2001 by the senator? Proof positive that Bil Oil is artificially increasing demand to pad their profits. They're making billions off of these tactics while the return growth of the American economy is hampered as a result, and yet people will defend them. Go figure.