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Fuel-Efficient Vehicles Hurt Big Oil Stock Dividends, UCS Press Release Notes

Fuel-Efficient Vehicles Make Big Oil Stocks Suffer
Fuel-Efficient Vehicles Make Big Oil Stocks Suffer

Big oil companies count on our refusal to change when it comes to fuel-efficent vehicles. “Fuel efficient vehicles are wimpy” and “Fuel-efficient vehicles aren’t cool” might sum up the attitude of both consumers and dealers everywhere. This attitude seems to have been prevailing for the last few decades, well, let’s not mince words here, our addiction to fossil fuels is bordering on obsession, and in the last hundred years we’ve gained just 4mpg on the national fuel economy average, pretty good news for big oil.

Because of this unwavering addiction, investing in Big Oil has always been a pretty safe bet, and the dividends have always been pretty consistent. Now that we’ve got some new regulations and automakers are rushing to meet their requirements, an entirely new market of fuel-efficient vehicles is on the road. People don’t want to pay the high price of fuel anymore, and oil companies aren’t doing a whole lot to reduce prices, so the other route is to buy into fuel efficient vehicles, reducing the amount of fuel that they’ll have to buy.

This isn’t such great news if you’re a big oil investor. If consumers are buying less of the product you’re investing in, then your dividends are going to reflect that. For example, according to a recent press release by the Union of Concerned Scientists [UCS], ExxonMobil, the biggest of Big Oil, posted near-record profits for 2012 of $44.9 billion. Americans pay thousands of dollars to fill up their tanks every year, and about 66% of that heads right into those profits.

Drivers with shares in ExxonMobil have virtually no dividend increases to show for all their fuel spending. If ExxonMobil CEO Rex Tillerson were to drive a Chevy Suburban all year, spending over $3,000 in fuel, his $150 million in stock would go up a whopping 34¢. He’d be better off spending that extra fuel money on a fuel-efficient vehicle, and realize the fuel savings amounting to much more than 34¢.

So, what’s the point? Big Oil profits from you filling up. If you don’t fill up as often, or at all in the case of electric vehicles, then where does their profit base go? We can hardly expect them to take the lead in cutting our oil addiction, so we’ve got to do it ourselves. Big Oil, thank you for keeping the fuel prices high to line your pockets, and so that we can finally come to the realization that fuel efficient vehicles can be cool and exciting. Also, investors in Big Oil, now is probably a good time to get out of the game.


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