It appears thatCITGO’s profits for nine months continue are continuing strongly, according to VHeadline industry commentarist Oliver L. Campbell.
Citgo is the retail oil company owned by Venezuelan State Oil company PDVSA.
Citgo has made significant profits in the last nine months, however would have done even better had it not been for things like the increase in oil prices and natural occurences such as hurricanes.
Both sales and the cost of oil purchases in 2005 reflect the increase in oil prices as the year has progressed. CITGO produces no crude oil itself and must purchase it from PDVSA and third parties. These upstream suppliers extract most of the profit which leaves CITGO to make a modest profit by refining and selling products in the USA market.
Citgo goes on to say:
CITGO attributes the fall in the volume of gasoline sales to the hurricanes in the third quarter. However, their statement that “the combined sales volume of gasoline, jet fuel and diesel declined approximately 5% for the quarter” is misleading.
It is unlikely the lack of supply is the sole cause of the fall, and it probably reflects some consumer resistance to the high prices at the pump.
The article goes on to provide an analysis of the profits in chart format (for you mathematicians!) and to dispel the myth that Citgo is not a good business.
Tom and I purchase our fuel at Citgo as much as possible because we support Venezuela and the government there in its efforts to support all people of the country, especially the poor.
Deanna Dee-Dee Taylor 