Imagine, if you were an oil company.Record profits , price rises weekly. Delighted shareholders..
But you start to hear noises of a consumer backlash . Prices are really starting to hurt people . At first they direct their wrath to the government for fuel duty, until they finally understand that's not the real issue .There's even silly talk about boycotts, which do no harm but you begin to think eventually someone may come up with a practical form of protest.
Then you learn that the company which delivers your fuel is in dispute with its drivers and they threaten a short strike. It won't actually do that much harm, and the drivers son't get much public support. But you realise that the public will become so paranoid about getting fuel, they don't notice the price so much for months afterwards.
So you sit back and let the strike happen. The delivery company know you will cough up extra rates when they do eventually settle , and - heavens- you can afford it.
No one would do that, would they?
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If I were running an oil company, I would have my petrol station display boards show the price before duty and VAT in huge letters, then the pump price below that marked "After Tax".
That would concentrate the minds on why the stuff is so dear.
Edited by Robin Reliant on 06/07/2008 at 23:19
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Imagine, if you were an oil company.Record profits , price rises weekly. Delighted shareholders.. .There's even silly talk about boycotts,
Quite correct, it is silly talk. The UK market represents a tiny fraction of the world oil consumption, and even worse, the UK's petrol/diesel market contributes an even smaller fraction to the profit margins of the oil companies.
So even if the whole of UK switched to using some magic fuel instead of oil, it would not make a tiny little dent in the oil Companies profitability.
They work in a global environment where the UK is nothing but a tiny irritating dot because the ill informed public does not know how to be grateful to BP and Shell for choosing to be UK based rather than taking their bases abroad like Total, Chevron, conoco, Exxon, Texaco, Petronas, Gazprom, KPC, ADNOC, INOC, QGPC, SAOC, or INOC. So there.
Edited by Webmaster on 08/07/2008 at 01:48
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So even if the whole of UK switched to using some magic fuel instead of oil, it would not make a tiny little dent in the oil Companies profitability.
Well of course it would (make a dent) - they don't sell fuel here at a loss. The larger impact though would be the fact that they're a listed company in the UK & have their share price mediated & arbitraged on the London Stock Exchange. Any adverse publicity ( such as a boycott) would have an extremely detrimental effect on their share price - not only from the immediate 'shock' effect but also because large institutions & the pension fund would be under scrutiny (..and hence pressure..) over their position & intention.
..the UK is nothing but a tiny irritating dot because the ill informed public does not know how to be grateful to BP and.... etc. etc.
No, they're grateful to be listed here - the London market & Uk regulatory structure is the most dynamic & business-friendly in the world. Companies are queueing up to be based (..and therefore regulated & listed) here. Ask Shell...
Edited by woodbines on 07/07/2008 at 00:46
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So dynamic and effective that companies are leaving UK due to corporation tax
Shire pharmacuticals etc See FT for details
sorry not motoring but poster incorrect .
snipquote for the person who ignored the message that popped up on his screen asking to snip/summarize quoted replies
Edited by Dynamic Dave on 07/07/2008 at 11:20
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>>Imagine, if you were an oil company.Record profits , price rises weekly. Delighted shareholders..
Some of the delighted shareholders are pension funds, which can't be a bad thing for those who fear that their retirement plans are at the mercy of all these dangerous economic currents.
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So dynamic and effective that companies are leaving UK due to corporation tax
Shire pharmacuticals etc See FT for details >>
Shire Pharmaceuticals leaving the UK is just smoke and mirrors. They will keep their manufacturing base here but will be fiscally domiciled elsewhere, Ireland and Jersey are favourites. It's a trick thought up by overpaid accountants who base themselves in this country while assisting to fleece it.
As to oil and motoring, maybe the greater profits will encourage the companies to prospect in areas previously believed to be too expensive to be practical.
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Well of course it would (make a dent) - they don't sell fuel here at a loss
How about backing up your claim with some figures then.
No, they're grateful to be listed here - Ask Shell...
I have, and they would up sticks and go tomorrow if it was not for the mesh that they are entangled in by having historic links to the UK. If they were starting afresh, they would not choose to be London based. However, they are now slowly but surely reducing their presence in the UK. Care to look up where else Shell is listed?
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Sounds like we should all be grovelling grateful for the oil companies' charitable works in the UK then? I must remember to leave a £5 tip next time I fill up!
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Petrol diesel is only part of the story, there is a huge market for plastics, polymers, detergents, fertilizers, lubricating oils, pharmaceuticals, animal feed (mineral oil). If nobody ever bought petrol and diesel again, they would still be the richest, most powerful and corrupt families and companies on the planet.
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Sounds like we should all be grovelling grateful for the oil companies' charitable works in the UK then?
Too right. Otherwise where would you get your fuel, and if they decamp abroad, how will NuLabour fill the gap left by the loss of corporation-tax?
P.S. re my earlier post about Shell gradually moving away from UK: see
business.scotsman.com/business/Treasury39s-blindne...p
"The Treasury seems blind to the dangers of its prospective raid on foreign earnings, ...
As a result, company HQs are already fleeing the UK in droves. United Business Media, the events organiser and publisher, has just become the latest UK multinational to move abroad for tax purposes. It follows Ebay, Setana Broadcasting, Experian, Hiscox, Invesco, Omega and Shell.
www.irishtimes.com/newspaper/finance/2008/0502/120...l
"Six of the FTSE 100 companies, such as Royal Dutch Shell, Experian and Antofagasta, already have all or part of their headquarters abroad for operational reasons. Xstrata is domiciled in Zug, Switzerland, for tax purposes."
Edited by jbif on 07/07/2008 at 18:45
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>> Sounds like we should all be grovelling grateful for the oil companies' charitable works in the UK then? Too right. Otherwise where would you get your fuel
Yes, and if Tesco pulled out where would I get my food? And if M&S pulled out where would I get my clothes?
I'll let you into a little secret, jbif, the oil companies are not actually charities at all. They sell oil products to make a profit for their shareholders, and by all accounts they're very successful at doing so.
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>>How about backing up your claim with some figures then.
Can't be bothered!
Care to look up where else Shell is listed?
Uk & Netherlands - registered office in the UK at that rather big edifice in south London called the Shell Centre.
Ask Shell...
>>I have, and they would up sticks and go tomorrow if it was not for the mesh that they are >>entangled in by having historic links to the UK.
You obviously have a hotline to the boardroom!
Now, back to motoring.
Edited by woodbines on 07/07/2008 at 18:49
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Probably be a good idea if the UK just bit the bullet and joined the Euro. And then the EU adopted standard Pan-European rates of corporation tax etc., VAT and fuel duty. This would prevent countries under-bidding each other on corp taxes.
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"they don't sell fuel here at a loss"
No. But they do make absolutely tiny profits here relative to turnover and cost of infrastructure.
There's not much money from selling petrol in the UK (unless you're G Brown). That's why the number of petrol stations is in decline.
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"they don't sell fuel here at a loss" No. But they do make absolutely tiny profits here relative to turnover and cost of infrastructure. There's not much money from selling petrol in the UK (unless you're G Brown). That's why the number of petrol stations is in decline.
The number of petrol stations is a Red Herring. The total volume of fuel sold is going to be more or less independent of the number of outlets. If a filling station closes you just drive further to refuel, you don't go without. Shutting stations probably increases profit by reducing overhead at the expense of customer convenience.
In terms of profit to the oil companies, well, let's think about it shall we. A product with millions of customers, finite and decreasing reserves, highly inelastic demand, a handful of suppliers and very high barriers to new entrants, lack of any viable substitute in the short-medium future. And they can't make any profit from it!! If that were really the case then the management should all be sacked!
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If I ran Shell or BP I'd be worrying:
reserves are falling.
Cost of finding new oil is rising damatically: steel prices trebling, rig hire up by a factor of 10..
1 in 7 exploration wells finds oil.
There are high rewards but remember only 9 years ago oil was under $10 per barrel and no-one could make money by spending anything on exploration or new refineries etc...
With such a volatile product price, a sensible manager is going to be very careful on any new risks...
I do not recall anyone complaining that oil prices were too low (which in reality they were for long term sustainability).
(You could argue the same about cheap food...)
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