Why can't the gov. set a limit to the amount of profit oil company's can make.?
Answers:
It would be a terrible idea, just as rent control is a terrible idea, and for similar reasons. You seem to have a fundamental misconception about the free market system.
If you restrict oil company profits, you are reducing their incentive to go find new oil, or build new refineries, etc. And since several of the oil companies are also investing in researching and developing alternative energy sources, you are also reducing their ability to do that.
Since you mentioned rent control, a similar effect can be seen in cities like San Francisco, where rent control has assisted considerably in making real estate prices sky-high and made affordable apartments very rare.
Aside from all this, it isn't right on an ethical scale either. People who are focused right now on current profits are ignoring other past years in which oil company profits were considerably less. Since they are in an area of the market that is volatile and has its ups and downs, their profits will go up and down as well -- this happens to be an up period. It doesn't make any more sense to accuse them of greed than it does to call ice making companies greedy in the summertime.
Some governments do. They're called communists.
Don't forget the billions they spend to find, drill and refine it.
Do you want to balance their books over a decade?
If government controls the price the supply dies , and black markets arise. True cost goes up, no incentive to produce it. It is a mess. This is econ 101
inflation adjusted - it's still a good deal we have, our country's refining capacity is below normal now for reasons you don't want to hear here.
Conversely should oil companies be rewarded under another set of circumstances. (if your going to punish them for making a profit - beyond taxes etc.then it will happen to you too someday)
Nixon tried it in the 70's, look up how that failed.
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