Unpredictable. Unfocused. Just like life.

In today's Financial Post Peter Foster states that increased oil company profits are a result of higher crude oil prices:

Oil companies' soaring profits are due overwhelmingly to high crude oil prices. The only blatant attempted manipulator of crude prices is the Organization of Petroleum Exporting Countries.

Wait a second though. Profits are what is left over after all the costs are accounted for. If the cost of crude oil increases then the costs go up. So the price of gasoline increases in tandem. But assuming that all other factors are constant - I don't think that people have suddenly increased gas consumption, more likely they've limited their purchases - then the profit should stay constant in dollar terms. Instead it seems to be being kept constant in percentage terms, meaning that the dollar value is increasing substantially, with absolutely no relation to real costs.

So to put it simply, if profits are increasing then the price of gasoline is above what would be dictated by the rise in crude prices alone.

This is clear from Canadian gas prices. They start out high, dribble down about 3-4 cents over the week, and then jump right up to where they were before, or even higher. A few days ago they were 98 cents per liter, then they jumped to $1.07 per liter. Now nobody gives products away, so it is pretty clear that at 98 cents per liter there is still profit in the gas. So at $1.07, there is an extra profit of almost 10 cents or 10% for a portion of each week.

Let's put it this way. Assume the the cost of a liter of gas is 50 cents, consisting of 25 cents for crude oil/labour/etc., and 25 cents of profit. If the price of crude oil doubles to 50 cents, is it reasonable for the oil company to charge $1 per liter, thus doubling their profits to 50 cents? Their profit as a percentage of the sale is the same, but in dollar terms they have seen a 100% increase in profits. Is that justified in any way, other than the fact that they can?