Integrity Matters
December 7, 2005

Oil firms face questions for high gas prices

Question: (E-211)

Dear Jim:

Do you think recent outlandish gasoline prices reflect integrity in the oil business? What is legitimate profit?


Price-gouging is destructive. Legitimate profit is what responsible business people and their honest customers determine is a fair price. Integrity-centered buyers and sellers are willing to protect the longer-term viability of the other. Either too much or too little profit causes hardships. It's wrong to prey upon those who find themselves in harm's way. Medical service providers would not raise prices during an epidemic. Society would never stand for that.

Supply-and-demand explanations about high-priced fuels are followed by the blame game, otherwise known as "we are victims, too," with the fault lying at the feet of those in the Middle East who control prices. A good number of Americans are hopping mad about the high fuel costs and have demanded the oil companies be investigated after their industry-wide recent quarterly reports of incredible profit-taking.

Congress has begun hearings regarding the recent price run-ups and will determine who is guilty of what. Tens of millions of drivers concluded that the oil barons wanted to charge "whatever the market would bear" - and they did. Powerful people, sitting in lofty places, were reporting tremendous profits, creating burdensome fuel costs for the masses. One of the phrases emphasizing the integrity-centered leadership message of the Bracher Center for Integrity in Leadership: It should be common knowledge that free markets must operate with integrity, a culture of compliance, or face increasing government oversight.

According to MSNBC on Sept. 22, "The United States Federal Trade Commission is investigating whether gasoline price profiteering has occurred and oil companies have constrained refinery capacity to manipulate fuel prices."

On Sept. 5, just after Hurricane Katrina devastated parts of Louisiana, Mississippi and Alabama, The Shreveport (La.) Times, editorialized: "Business is business, but with Louisiana in a state of emergency from Hurricane Katrina, gasoline price gouging isn't just illegal, it's unconscionable. Gas stations are entitled to a reasonable profit. As wholesale prices rise, the cost has to be passed along to the motorist. ... But in one case prices had jumped past $4 overnight. In other instances, prices were rising several times within one day."

The attorney general of each state welcomes complaints about price gouging, of any kind, and now, especially fuel. Please report crooked treatment, immediately, because integrity is the foundation for legitimate profits and a healthy business climate.

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