High Point Enterprise Newspaper Archives Feb 24 1974, Page 7

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High Point Enterprise (Newspaper) - February 24, 1974, High Point, North Carolina Oil company profit increases have Many facets w York apr Tri a i 1% # a t. I a a it i i new York a in this period of sharply rising prices for crude Oil How has teen possible Tor the Oil companies to record such startling increases in profits the question vexes Many a americans As they pay As it Uch As 2vk times last year s office for Oil to heat their names and As much As a dime More a gallon than last year for gasoline to run their cars. Part of the answer is on the Public record. But this goes Only so far. Part lies buried in the books of the Oil companies who say the information must be kept from competitors. The first Point to remember is that the spectacular 1973 fourth Quarter profits a up 59 per cent Over 1972 to $784 million for Exxon. 70 per cent to $453.5 million for Texaco and 68 per cent to $271.6 million for Mobil a come at least in part from sources other than american Market. These Are International giants. The Chase Manhattan Bank regularly charts the Progress of 30 Oil companies. The Bank says earnings for the 30 on foreign operations nearly doubled from $3.2 billion in 1972 to an estimated $6.1 billion last year. Domestic Oil earnings did not match that Pace rising from $3.6 billion to about $4.4 billion. How much Consumers overseas were charged for the refined products was never limited by Price controls As severe As those in the United states. Though a few european governments did impose mild controls the pattern overseas last year was for sharply higher prices a and profits. Also helping the profit picture was the to per cent Dollar devaluation which made foreign currencies Worth More in terms of dollars. Example a 1972 profit of $100 made by an american Oil company in West Germany would show up As $120 gain in a 1973 profit and loss statement because of the Dollar devaluation and fluctuations in the German Mark. And there s a Bevy of other factors that helped profits soar. A Sample a inventory profits these came when the Price of crude Oil jumped dramatically at the end of the year. Already produced Oil which took 30 to 60 Days to run through the pipelines also jumped even though the actual costs of producing it did t. Raw materials such As Oil lumber and minerals Are not subject to the same controls As manufactured goods. A paper company for example could not increase the Price of already manufactured paper if Given a Price increase. Only the once of new paper could be raised. A chemical profits there were big gains by Mary of the Large Oil profits startling increases Chart shows percentage increase of profits of Oil companies in the fourth Quarter of 1973 As compared with the fourth Quarter of 1972. Figures were provided by the Ingalls amp Snyder brokerage firm. Companies in their growing chemical operations. Even though there is a worldwide shortage of petrochemicals the Oil companies were Able to sell All they could produce and had clients begging for More. A marketing soaring worldwide demand reduced the need for the Oil companies to launch expensive marketing programs to push their products. Gone Are the a put a Tiger in your tank advertising pitches and the Coffee Mug giveaways. Gulf for example says that in 1973 it spent about half the $23 million budgeted for advertising in 1972. The Oil companies say this extra Money is now being used elsewhere in their operations. What Money is spent on advertising is going for Public image ads designed to defend Oil company business practices. But what about the american consumer obviously the Oil companies were paying More for their crude triple in the Middle East and Venezuela and double in Canada. These costs had to be passed on. This brings us possibly to another major reason for the High profits the companies were allowed to raise their prices in the United states. Were they allowed to raise prices beyond their Cost increases for crude Oil ? even the Way the prices were increased Isnit easy to understand. The companies say very Little of their 1973 gains come from a series of Federal moves which lifted Price controls on about one third of Domestic crude Oil production and raised prices by $1.30 a barrel on the rest. The de controlled Oil is Selling for about $10 a barrel or nearly twice the Price of controlled Oil. A the administrations rationale was to give the Oil producers a financial incentive to Drill Oil Wells that weren to economic at the old Price but Are economic at the new Price a says a Federal Energy office Feo spokesman. The decontrol process started Back in August before the Middle East Oil embargo. The Energy Section of the Cost of living Council Csc created a two tier system for Oil prices. One Price was set for Oil that came from old established Wells that were producing at 1972 Levels. The Price for this a old crude was set at $4.25 a barrel a 30 cent increase. The Csc also permitted buyers and Sellers to establish a free Market for Oil produced beyond 1972 Levels. The Price for this a new crude is now at $10 a barrel reflecting in part the skyrocketing costs of foreign crude which have hit nearly $12. But even More benefits were in the offing. The government also allowed the companies to decontrol one barrel of old crude for each barrel of new crude they produced. The old crude freed from controls is called a released this moans that the government allowed companies that had paid $3.$ ,0� less for old crude to turn around and sell it at $50. There was one More profit Bonanza in december the cd cd a Energy office which merged with the Feo later in the month raised the Price of old crude by $1 a barrel to $5.25. The net effect of these decisions has been to free from Price controls As much As 29 per cent of current production the Feo says. Industry observers say that As much As a third of the Oil produced is not subject to Price controls. The More expensive de controlled third gets mixed in with the rest pushing up the Price of. All products that come out of the refineries. Is there evidence within this skein of pricing decisions that the Oil companies increased their prices at a rate higher than their costs were going up Only the Oil companies know what happened to Domestic profits during the fourth Quarter and they re not talking. They say its proprietary information. Not even the Federal government knows but it says it s trying to find out. The Oil companies have announced record profit figures for the final Quarter. But they refuse to break Down these figures to show How much they made in this country and How much they made abroad. They w on t say How much of their profit came from increased prices for Domestic crude. Asked by the associated press to break Down Domestic profits a Mobil spokesman said a it would take too much time and trouble and besides if we Tell one person we would have to Tell a Texaco spokesman responded a a we won t go beyond our Public statement on earnings. Because that s just not our Amerada Hess corp. Reported that fourth Quarter profits Rose 578 per cent Over 1972 and attributed much of it to increased Domestic profits. It was the largest Over All profit increase of any big . Oil company. How much came from higher Domestic crude prices a we Don t disclose that said William Furth a vice president. A it s a matter of corporate a the Public has been left completely in the dark and is not even to first base in knowing what the actual costs of the companies Are to produce Oil a says Charles f. Wheatley jr., general manager of. The american Public Gas a a citation. Because the �1 companies Are Able to hide Cost figurer government agencies Are forced to regulate prices on the basis of secondary information volunteered by producers or Trade 4associations, he told the Senate Interior committee recently. Right now the Feo get most of its information from the american Petroleum Institute a Trade association for the Oil Industry. But the Feo has asked Congress for legislation to require the Oil companies to provide this information directly to the Feo. The Feo has been jaw boning the Industry into releasing what it needs in the meantime. The Feo says that the figures it has been Able to assemble indicate that the Cost of gasoline at the pump has almost exactly matched the Price increases of crude Oil. But the Al Cio disagrees. The Union s lobbyist Andrew j. Biemiller portraits of your important men. Of your business wants to present its Best face to the Public one of the Best ways is to give recognition to its key men women and executives for outstanding performances in the business and civic Fields. Because some photographs Are displayed and also reproduced in magazines company brochures or newspapers we take special Pride in our ability to credit photographs of Fine Quality that reproduce Well in print. And these same photographs May be used in other ways in the business life of the company a for special occasions ond further recognition of individuals. The Cost con be As Little As $10 for a Black and White sitting and one retouched Glossy print. Call or write for our descriptive Price list. A Tonia ref College Village shopping Center Tel. 883-6526 High Point n. C. Discover the difference Quality can make a ms-4 we be been saving your Gas for to years Job Hunting is both a time consuming and a Gas burning Endeavor driving from company to company to apply for a position which in t available can make your Gas Needle drop to the big quote Quot. When you work with our professional Counselor in seeking that perfect Job you will Only be referred to businesses where you have a definite appointment time. No More applying for jobs where there Are none and no More Quot can you come Back later. At Snelling and Snelling we stay abreast of All the current openings and then refer you to the companies which can Best suit your needs. There is no obligation unless you decide to accept a position that we have suggested. Come in and let our professional employment specialists ease the Drain on your tank. 217 Gatewood 883-0121 Doris Mcdowell Savannah Hill Beverly Hunter Bill Pendergraph Ann Franco Shelby von Canon Ann Armstrong says retail prices for refined products have risen about five time As fast As for crude Oil. A says a Bireau of labor statistics report for december 1373 shows crude prices Rose 27.5 per cult while refined products went up 125 per cent. He branded it a a Clear indication of the Oil companies say that increased prices for crude Are not the Only Factor in Price increases. Other increased costs such As those for labor and equipment Are responsible too. But the most Likely place in the production Chain to earn profits beyond actual costs is where the Oil comes out of the ground. How much old crude new crude and released Oil did they sell during the last Quarter a we won t Tell you a say the companies. But if a company were Able to release tots of old crude from Price controls and sell it at $10 a barrel instead of just under $4, it made a considerable profit on the Domestic Side of its Ledger. Staling Mckitus jr., an anal?�4 with the leverage firm Tai Ingalls ii Snyder has followed the Oil Industry for 20 years he says mos of the increase in crude paces is pure profit and adds a what s wrong with that As Long As it goes into funding new exploration a the Oil companies can ignore requests from the Public for an accounting but they will eventually have to provide the a pure it a th6 a Al Ernie no. Ani the government is Iskin the same questions what part of you fourth Quad r or its came from Domestic operations How much old crude new crude and released Oil did you produce but the Feo investigation Only started last month and the results won t be ready until Spring. Anvil Bramini. Is now located in its permanent executive offices at 320 North Hamilton Street High Point North Carolina. The country store is in rear of by uding w4 Highland a / if leasing Ouloth year drowning in a sea of paper ? Well bail you out. With All the help you need to handle your paperwork overloads. Call manpower temporary services. Well get the Job done quickly reliably professionally. No matter what you re up against. Give us a tall. Manpower temporary services Well give you All the help you need. Once in duet hoi Light Industrial technical Gaia proc a a gang modest Koontai saes marketing phone Bonnie Homey at 883-6171 11 5 West High Stroot 1974 Olds Coupe to lease 95 99 25 months plus tax and tags to buy 149 47 25 months plus tax and tags see us division of Highland motors inc. 803 it i. Stain si., High Point no. makes j a before you buy borrow finance or sign anything insist on a pay any Day simple interest loan. 1. You sign a loan note for Only the exact amount of Money you borrow. No interest is added in Advance to your note. 2. You pay Only simple interest on your monthly declining balance. And Only for the number of Days you use the Money. 3. You May make your loan payment any Day of each month. Unlike loan plans at other financial institutions with Payan Day Loans there s never a delinquency charge for late payment. Simple interest simply accrues from data of last payment. This gives you maximum flexibility in repaying each month. 4. You can save Money. By making Early payments or extra amounts in Advance you reduce the loan balance and the amount of interest you pay. 5. You May pay off the entire amount of your loan at anytime without a prepayment penalty. And without Rule of 78 s or Short rate rebate of unearned interest. 6. It s possible to skip monthly payments. Simply notify us in Advance. You do not have to pay Extension interest simply accrues from Date of last payment made. 7. You May select your monthly payment amount. Just Tell us How much you wish to pay each month. Well tailor the loan to fit your request. 8. You can select your own number of months to repay your loan. In addition to the Standard time periods of 12,18. 24.30 and 36 months offered by other financial institutions we provide the widest Choice in financing. For example 19. 27, 32,48 or More months. On Mobile Homes and certain other purchases you May select any number of months up to 120. 9. No More Coupon books. You receive each month a two part statement showing principal balance current payment due your payments Are the same amount each Mont hand How your previous payment was applied. You return one part of statement with payment in return envelope provided. You keep the other part of your statement for record purposes. 10. You receive full tax credit for the interest you pay. Because your interest paid is shown separately on each copy of the monthly statement you retain you have ready Access to the total amount of interest you May deduct for tax purposes. 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