The Truth about Oil Company Earnings

Once again, representatives from major oil companies have been asked to appear before a Congressional committee to explain the price of oil and gasoline. And, as in the past, one of the main topics of conversation is likelyt to be the companies' earnings.

It's true that oil companies have been making money.They are among the largest companies in the world, so it's logical for their earnings to be large. They also reinvest their earnings to produce more energy of all types and to conduct research into fuels for the future.

Yet, their earnings are not out-of-line with the earnings of other companies. Consider these figures just released by the U.S. Census Bureau:

• In 2007, all manufacturing companies made an average of 7.3 cents on every dollar of sales.
• Excluding the ailing auto industry, manufacturing companies earned an average of 8.9 cents on every dollar of sales in 2007.
• The U.S. oil and natural gas industry earned 8.3 cents on every dollar of sales.

For more facts about the energy industry, look at "The Truth about Oil and Gasoline: An API Primer" at www.energytomorrow.org.