I have heard by a few friends (not usually of the tin-foil brigade) that the reason oil companies have a low profit margin for the gasoline they sell is that they charge themselves a ridiculous amount for the refined gas and can thus charge the gas they sell at the pumps at an inflated cost.
For example, let’s say that Chevron’s refinerary has produced some gasoline at a cost of $2.00 a gallon. They charge the retail division $4.00/gal for the gas which they then sell at a 6% markup of $4.24/gallon. Thus they claim that gasoline only has a 6% profit margin. Of course we need to assume at least a gentlemen’s agreement or collusion between the oil companies about this and if I’m not mistaken, they will sometimes buy gasoline from each other’s refinery (but I could be wrong about this).
Not sure where you are assigning this profit; if at the pump, remember that most gas stations are franchised so the retail sale is not the oil company’s profit.
Otherwise, IIRC, companies are not required to disclose on financial statements how much profit came from which divisions or wholly-owned subsidiaries, so I don’t know why it makes any difference to anyone besides the company itself how much profit was from refining and how much from gasoline sales.
Where do you see claims for Chevron’s (or anyone’s) profit margin at the retail level?
139/42 = $3.31 for a gallon of unrefined crude. Even if building and running a multi billion dollar refinery was completely free and delivery drivers drove their trucks as an act of charity, there’s not that big a markup.
Yes, if $4/gal is what they are charging to their franchisees, $4/gal would be what they should charge to their company owned places in order to make it look as transparent as possible.
The math actually sounds about right, rather than conspiratorial, because that really does seem what franchisees/retailers are paying for wholesale gas from my understanding.