“And of course we heard about billions and billions of dollars worth of profits, and this got all the attention by the media,” says Dr. Walden, an economist with the North Carolina Cooperative Extension Service. “But if you break it down and if we were to eliminate all profits made by all companies – I mean take all those profits away -- you know what it would do to gas prices? It would reduce gas prices by about 10 cents a gallon. So instead of paying $3 a gallon we’d pay $2.90 a gallon.

“So high profits are not the major reason why gas prices are high,” he says.

“Another way to look at these profits is to look at them as percent of sales. Here we see that oil companies are only slightly above average at about 9 percent profits compared to sales,” Walden adds. “The average for the economy is 8 percent. And actually the profit rate earned by oil companies is lower than the profit rate earned by banks, software companies and many household product firms.

“So again, the main reason for high gas prices -- it’s not oil profits (oil company profits). It’s the high price of oil.”