The Times on its Business Day cover looks at how high oil prices are sticking oil refiners, too.
After last year’s stellar profits, American refiners are going through a traumatic period. In a time of record gasoline prices, some of them actually lost money in the first quarter, and for virtually all refiners, profits are down sharply.
Experts say the refiners are caught in a double bind. The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve.
Oil consumption dropped 3.3 percent in March from a year ago and the paper says refiners are cutting way back on production, stirring suspicions among consumer advocates.
The WSJ on A3 and the Times on C1 write that Congress voted to stop stockpiling oil for emergencies in a bid to relieve pressure on demand. It’s a move Bush has promised to veto, though Congress looks to have the votes to override it. The Senate passed it 97-1.
Voters, if the gas-tax hooha wasn’t evidence enough, let it be known that the politicians hear you and have unleashed the full pander. Pausing the stockpiling will hardly make a difference in gas prices—the amount comes to 0.1 percent of oil demand every day, but it will hurt if a shock comes down the pike.
“The SPR is an insurance policy,” said Keith Hennessey, a top economic-policy adviser to Mr. Bush. “Just because your budget is being squeezed doesn’t mean you stop paying your insurance policy.”
Tax the rich, teach the vets
House Democrats are pitching a new tax on the rich to pay for a $50 billion, ten-year Dem proposal to increase veterans’ education benefits, the Journal scoops on A4. That’s just in time for a going-nowhere proposal to get them further pegged by the GOP as tax-and-spend liberals in the general election. The legislation would add 0.5 percent to the tax bills on income above $500,000 a year for an individual or $1 million for a couple.
Buying the boss’s house
The Journal fronts a Marketplace story on yet another way the housing bust is hitting companies. It seems companies have bought the houses of top executives that have been transferred and are losing big bucks. Qwest lost $1.8 million on its CEO’s house, and at least seven others have taken $500,000 hits. ProLogis, a real-estate firm, has taken $500,000-plus hits on homes for two different execs.
Some shareholders, as you can imagine, are not happy.
Corporate gadfly and billionaire investor Carl Icahn is trying to keep the spotlight on Yahoo by buying up 50 million shares and preparing for a shareholder-activist-style battle for board seats, the papers say. He wants to bring Microsoft back to the table, and the Journal, LAT, and FT report that other hedge fund investors are thinking about whether to get involved.
The NYT notes that it’s not quite time to get all breathless. Icahn has just 3.5 percent of Yahoo’s shares and he’s had some failures in his pressure bids recently. But considering that Yahoo just turned down a bid at nearly a two-thirds premium, the company is ripe for troublemaking.
Chevy Tahoe: environmental savior
The Boston Globe looks at how the green label doesn’t mean much sometimes. How did a twenty-mile-per-gallon Chevy Tahoe get labeled “Green Car of the Year” by the Sierra Club of all people? By slapping a hybrid motor in it.
Reality Check Quote of the Day:
“How a 6,000-pound behemoth can be the green car of the year is beyond me,” said David Champion, director of Consumer Reports Auto Test Division. “It’s a marketing exercise rather than reality.”
Trib to hold Cubs, for now
The Chicago Tribune reports its owner Tribune Company may delay selling the Chicago Cubs because of “costly” repairs at Wrigley Field. The paper notes that the $650 million sale of Newsday eases the pressure for a quick sale to pay down debt maturing this year.
Sources involved in the bidding process said word is filtering back to those potential buyers that Tribune Co. will hold onto the team rather than sell at distressed prices if would-be buyers drop their prices too steeply in anticipation of having to pay for Wrigley Field renovations themselves.
Downgrade on the way for MBIA?