The real story on gas prices

Two items leap out from this story. First, Exxon only makes 2 cents per gallon profit. Second, they're losing a lot of money in their U.S. operations. Could this be the hidden truth about many of our economic problems?

Here’s a simple fact of economics that’s getting everyone in Washington pretty excited this week: When prices increase for a commodity like oil, companies that produce and sell that commodity earn more money.

So, as we get ready to release our quarterly earnings on Thursday, here are a few things to consider when you see the inevitable headlines and sound bites about high gasoline prices and what to do about them. These facts probably won’t make anyone feel better about paying more for gasoline – and of course price increases can have a very real impact on family budgets – but I do think it’s important that we at least have an honest discussion about what’s behind recent energy price increases.

Less than 3 percent of ExxonMobil’s earnings are from U.S. gasoline sales

ExxonMobil’s earnings are from operations in more than 100 countries around the world. The part of the business that refines and sells gasoline and diesel in the United States represents less than 3 percent – or 3 cents on the dollar – of our total earnings. For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents.

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