Every consumer who operates a car, heats a home, or travels has felt the pain of higher energy cost. Increasing energy cost has left consumers with less money in their pockets but a few companies have benefited with soaring profits with no end in sight. A prime example of record-breaking profits is Exxon Mobile who only has one-tenth of the oil market in the United States. This past quarter, Exxon Mobile posted the highest profits for any publicly traded company. The profits accumulated where over $10 billion dollars in the fourth quarter that equates to $80,000 per minute for three months. With consumers paying more for energy and big oil companies producing mind-boggling profits have caused the government to determine if these profits are justified. Windfall tax is a common discussion circulating around the media and government. Windfall taxes simply states that an organization must share the excess profits that is produced with the consumers. The people who scrutinize and ask for a windfall tax on big oil companies do not have the same standards for higher profit industries such as technology and fianance.
During the time that a barrel of crude oil approached $80 in mid-2006, many consumers and organizations where screaming, “price gouging or price fixing” towards the big oil companies. A common misconception of consumers is that the oil companies do not set the price of oil. Oil prices are traded, similar to a common stock, by three major international petroleum exchanges. These energy trading floors are New York Mercantile Exchange, the International Petroleum Exchange in London and the Singapore International Monetary Exchange. Similar to a common stock, the more demand for oil, the higher the price; more build up ...