Gas prices have never been higher, and Exxon Mobil's profits have never been higher.
Trying to tap the popular ire over gas prices, Barack Obama told an Iowa crowd the day after Christmas 2007, "Gas prices have never been higher, and Exxon Mobil's profits have never been higher." He's wrong on both counts. Gas prices have soared this year, and so have the profits of Exxon Mobil and other companies. But in saying they've "never been higher," Obama overstates the case. The price for a gallon of gas peaked in March 1981 at $1.42 a gallon, said Jonathan Cogan, a senior analyst for the Energy Information Administration. Sounds cheap, but factor in inflation and that's a whopping $3.38 per gallon. Two days before Obama gave his speech, the Energy Information Administration put the price of gas at $2.98 per gallon — 40 cents less than the inflation-adjusted 1981 price. Even without inflation, Obama had it wrong. In May 2007, prices hit $3.218 per gallon, according to the Energy Information Administration, which has tracked the average weekly price of gasoline for decades. PolitiFact will grant that gas prices are uncomfortably high for many of us. Does that mean Exxon Mobil is raking in more dough than ever? Not at the moment. The company did earn record annual profits of $39.5-billion in 2006. Their record-breaking streak continued through the first quarter of 2007, according to the company's quarterly statements. But the company's second quarter sales fell billions short of Wall Street expectations. Profits declined in the third quarter. For the first nine months of 2007, profit fell 1 percent from the same period in 2006. The Irving, Texas, company still posted healthy profits of nearly $29-billion, but Obama was wrong. Exxon Mobil's profits have been higher. Too bad Obama didn't give his speech in January 2007. It would have been half true. But this week, he's just plain wrong. UPDATE: On Feb. 1, 2008, Exxon Mobil announced a $40.6-billion net profit -- a record. But Obama made his statement more than a month earlier and, as we explain above, the company had not released record profits at that time -- nor were gas prices at record highs. So we're going to keep our False ruling, but we will acknowledge that Obama was prescient, at least as it relates to Exxon Mobil's financial performance.
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