Exxon Oil Company Random Facts and Trivia
About the Exxon oil company, history and information including random facts and interesting trivia.
Exxon operates 1,240 Signal Gas stations on the West Coast of the U.S.; it purchased them from Standard Oil of California in 1967. In the past the company's brand names have included Esso, Enco, Enjay, and Humble. Exxon also makes Atlas Bucron tires.
Tax laws have made it profitable for Exxon to charge artificially high prices for crude oil. The oil depletion allowance has permitted Exxon to subtract from its gross income before taxes an amount equal to 22% of its total revenues from crude oil production, up to 50% of the firm's net pretax income. The company thus has had an incentive to charge high crude prices and, since crude prices are a cost to the company's refineries, thereby reduce their refinery profits. Exxon benefits because the depletion allowance reduces the tax on crude oil profits, and the artificially low refinery profits result in lower taxes on refinery operations. Since Exxon consolidates the finances of its production and refinery operations, its low refinery profits actually help the company make more money than if the refinery profits were normal (and higher), and the crude profits were normal (and lower). However, independent refineries that have no crude production of their own are hurt by Exxon's high crude prices. The independents have not been able to take advantage of the oil depletion allowance because they have no crude production. Exxon can thus force the independents out of business by raising its crude prices high enough to make the independents' refinery operations unprofitable.
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