Why is it when a restaurant has its ingredients cost go up, they make less, but oil companies make more?

I know a owner of a local pizza place and all his basic ingredients costs have gone up... but due to area competition, he can't raise his prices...





he's making less profit...





but when oil prices go up from OPEC... oil companies make more profit?





shouldn't competition keep prices down more, to the point where they are making less?





or is competition broken among oil companies...Why is it when a restaurant has its ingredients cost go up, they make less, but oil companies make more?
I haven't seen oil companies make more profit as a percentage of revenue. Their margins are in the 7-9% range, which is typical for that industry.Why is it when a restaurant has its ingredients cost go up, they make less, but oil companies make more?
There basically is no competition within OPEC. The whole point of OPEC is that all the major oil producing countries in the agree to only produce a certain amount of oil to keep the prices sufficiently high. OPEC was created as sort of a monopoly to prevent competition among the world's major oil producers.





Interestingly, the rising cost of oil probably contributes to the rising cost of ingredients for restauranteurs. The rising cost of oil raises the price of fuel needed to ship ingredients like fruits, vegetables and meat over long distances, so it costs the producers more to ship them to your friend and he gets charged for the higher price of the fuel.
Because pizza is discretionary spending. If the price goes up, you do without, or you go to the pizza place that has cheaper prices. And their profit margin is typically more than the oil company's.





Fuel isn't a discretionary expense. Demand isn't as elastic as for pizza. And everybody is paying the same for the same base ';ingredient.





Oil companies only make more profit now because the same 9% profit margin they've always earned now comes out to more money because they are selling more fuel than they did before and it's at a higher price than before.
Actually our government worked hand in hand with oil companies and the like to ensure that competition never happened again in the gasoline market....





Most states have minimum pricing laws for gasoline.....seriously.





hahaha, thumb downs.....just look it up people, its not that hard to find for yourselves.
My guess would be that your local pizza store owner is competing against larger pizza chains and burger %26amp; taco places whose margins are less directly affected by the rising cost of those ingredients





whereas oil companies only compete against other companies, selling the exact same product, so when prices actually rise from the rising cost of oil, they all rise together
Restaurants make more profit than Oil Cos. The reason pizza places do not raise their prices as often is because they actually competing with their own customers. The customers want to cook at home but the restaurants want them to buy their food.
In most cases that just isn't true. When supply costs go up the cost is often transfered to the consumer. Perhaps your friend should find better priced suppliers, or compete because his pizza is better.