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Car Forum / Australian Car Forums / General Car Topics (Australian group) / July 2006Petrol, what a rort.
Just paid 1.53.9/L in Sydney, it was 98octane but I see on the news it's going to be $1.50 for unleaded tomorrow. I've never whinged about the price of fuel, but this is a joke! The Middle East has us by the Balls. > Just paid 1.53.9/L in Sydney, it was 98octane but I see on the news it's > going to be $1.50 for unleaded tomorrow. I've never whinged about the price > of fuel, but this is a joke! nothing even remotely funny about the way the oil companys are entrapping the public > The Middle East has us by the Balls. no it hasn't , the price parity has. > no it hasn't , the price parity has. ~~~~~~~~~~~ Local oil companies can choose to sell elsewhere. -- FreeMarketRules > Local oil companies can choose to sell elsewhere. And have a guess why they don't, dickhead? -- Regards, Noddy. >> Local oil companies can choose to sell elsewhere. > > And have a guess why they don't, dickhead? I'll play. The sell it here at these prices because we are prepared to pay these prices. They could sell it overseas for the same price, no? Ben > I'll play. The sell it here at these prices because we are prepared to pay > these prices. They could sell it overseas for the same price, no? No. They sell it here at these prices not because we're prepared to pay, but because we have no other choice. It's the best example in the world of a completely captive audience that I can think of. They could export their oil overseas if they wish, but then they'd incur the heavy costs of shipping hundreds of thousands of tonnes of crude to other countries. Why do that when they can get the same end price selling locally without the shipping costs easting into their bottom line? Can you spell "rort"? -- Regards, Noddy. >> I'll play. The sell it here at these prices because we are prepared to pay >> these prices. They could sell it overseas for the same price, no? [quoted text clipped - 4 lines] > because we have no other choice. It's the best example in the world of a > completely captive audience that I can think of. So our best hope for cheaper petrol is if someone starts to import it to try to compete with our local suppliers. > They could export their oil overseas if they wish, but then they'd incur the > heavy costs of shipping hundreds of thousands of tonnes of crude to other > countries. Why do that when they can get the same end price selling locally > without the shipping costs easting into their bottom line? No logical reason for them to do it. > Can you spell "rort"? g, r, e, e, d. Ben > So our best hope for cheaper petrol is if someone starts to import it to > try to compete with our local suppliers. That would help, but it's about as likely as you or I being voted the next Prime Minister. Our *real* best hope would be for the government to regulate the oil industry *properly*, and do away with the ridiculous concept of "world parity pricing". If a take away food shop started selling ham sandwiches at 19 bucks a pop "because that's what they sell for in London", someone from some government department would be up them so fast they'd get a nose bleed. Local oil companies do *exactly* the same thing and there's not so much as a wisper from anyone in power, and I'd guess that the billions per year the government collects in petrol revenue has a bit to do with it :) -- Regards, Noddy. >> So our best hope for cheaper petrol is if someone starts to import it to >> try to compete with our local suppliers. [quoted text clipped - 13 lines] > wisper from anyone in power, and I'd guess that the billions per year the > government collects in petrol revenue has a bit to do with it :) The oil parity pricing is a direct government income. It is a tax which goes straight to the government. > The oil parity pricing is a direct government income. It is a tax which > goes straight to the government. ~~~~~~~~~~~~ Do you have proof of this assertion? -- ShowUsSomeLinks,Please > > So our best hope for cheaper petrol is if someone starts to import it to > > try to compete with our local suppliers. [quoted text clipped - 13 lines] > wisper from anyone in power, and I'd guess that the billions per year the > government collects in petrol revenue has a bit to do with it :) Once again, let's apply a little bit of microeconomic analysis to your scenario: Let's say there's only *one* shop in the world that sells ham sandwiches, and that shop is in London. Let's say that after freight, a ham sandwich delivered to you in Australia ends up costing $19. Let's also say that *everyone* needs ham sandwiches, and only ham sandwiches (devon won't do), and everyone consumes one a week, sometimes a little more, sometimes a little fewer, but over the population, the intake of ham sandwiches is pretty much constant. First question: in this scenario, what will be the market price of ham sandwiches in Australia? Answer: $19 Let's say you now open a local shop and start selling ham sandwiches which are exactly the same as the London one. Consumers don't care, they'll buy yours or the London ones, they just need their sandwiches. Second question: What price will you sell your sandwiches for? Answer: Well, you could try and sell them for $20, but you won't sell any 'cause they only cost $19 from London. You could sell them for $18 and you'd sell everything you could make, but for every sale you'd be foregoing $1 you could have made. So the answer is $19. Now, substitute "Singapore" for London and "crude oil" for ham sandwiches, and you might start to understand oil pricing. "Price parity" is not an arbitrary government decree, it's an indication of a correctly operating market. > Once again, let's apply a little bit of microeconomic analysis to your > scenario: Knock yourself out. > Let's say there's only *one* shop in the world that sells ham sandwiches, > and that shop is in London. Let's say that after freight, a ham sandwich > delivered to you in Australia ends up costing $19. You can assume that if you like, but it's not an accurate analogy. There is no one single source for crude in the world, or is that your understanding of things? > Let's also say that *everyone* needs ham sandwiches, and only ham > sandwiches > (devon won't do), and everyone consumes one a week, sometimes a little > more, > sometimes a little fewer, but over the population, the intake of ham > sandwiches is pretty much constant. The Jews would hate it :) > First question: in this scenario, what will be the market price of ham > sandwiches in Australia? > Answer: $19 Probably, but *only* if the only available source for said Ham sandwiches was London. Fortunately for us (or unfortunately as it appears) whe have enough ham sandwiches *and* oil for world prices to make bugger all impact. > Let's say you now open a local shop and start selling ham sandwiches which > are exactly the same as the London one. Consumers don't care, they'll buy [quoted text clipped - 7 lines] > you > could have made. So the answer is $19. Um, no. The *correct* answer is whatever you think is a fair and acceptable profit margin, whilst *still* giving you a competitive edge. That ain't 19 bucks. > Now, substitute "Singapore" for London and "crude oil" for ham sandwiches, > and you might start to understand oil pricing. "Price parity" is not an > arbitrary government decree, it's an indication of a correctly operating > market. You're way off base here actually. What oil sells for in Singapore, Zimbabwe or Ala-f.cking-bama is irrelevant to you, me and the guy up the street if we're not buying it from there, *or* not selling it to them. In our case, manufacturers use a world price to justify their own local charges despite then having very little to do with the open market, and most of their concern being domestic. They're not selling oil at the current price because that's what they could get for it elsewhere, but because you have no other choice *but* to buy it. -- Regards, Noddy. > > Once again, let's apply a little bit of microeconomic analysis to your > > scenario: [quoted text clipped - 9 lines] > There is no one single source for crude in the world, or is that your > understanding of things? No, but as I explain later, Singapore is our cheapest/closest alternative supplier of crude, so what it costs to buy thier oil and land it here sets the price. > > Let's also say that *everyone* needs ham sandwiches, and only ham > > sandwiches [quoted text clipped - 4 lines] > > The Jews would hate it :) Perhaps if they didn't stir up things in certain places around the world there'd be less concern about the global supply of ham sandwiches. > > First question: in this scenario, what will be the market price of ham > > sandwiches in Australia? [quoted text clipped - 5 lines] > Fortunately for us (or unfortunately as it appears) whe have enough ham > sandwiches *and* oil for world prices to make bugger all impact. No we don't. We need to buy a substantial amount of other kinds of crude to supply industry, which is a *significant* consumer of oil products. I think our crude is no good for making diesel either, so we gotta buy oil. > > Let's say you now open a local shop and start selling ham sandwiches which > > are exactly the same as the London one. Consumers don't care, they'll buy [quoted text clipped - 12 lines] > > That ain't 19 bucks. Well, that's how markets work - producers seek to maximise profits - it's what they do. They sell at $20, we say bugger off and buy the cheaper import, they sell at $18 and we by all their product and they've done themselves out of a $1 per sale. > > Now, substitute "Singapore" for London and "crude oil" for ham sandwiches, > > and you might start to understand oil pricing. "Price parity" is not an [quoted text clipped - 8 lines] > justify their own local charges despite then having very little to do with > the open market, and most of their concern being domestic. No it's not. Firstly, we are involved in the world market whether we like it or not - as I said before, we have to buy a *lot* of heavy crude. Secondly, as much as you'd like it, private companies are profit-maximising entities - in fact company directors are legally obliged to maximise profit for shareholders. Selling oil at less than market prices because it's "good for Australia" is not what private companies are about. > They're not selling oil at the current price because that's what they could > get for it elsewhere, but because you have no other choice *but* to buy it. I didn't say they charge $19 because that's what they could get for it in another market, it's because $19 is what the cheapest alternative would cost if they didn't sell any. > No we don't. We need to buy a substantial amount of other kinds of crude to > supply industry, which is a *significant* consumer of oil products. I think > our crude is no good for making diesel either, so we gotta buy oil. Bass strait crude was good enough to make all fuels but not good enough for lubricating oils. Shell advertised a few years ago that they had managed to make lubricating oils from local crude and AFAIK they still do. AFAIK Bass strait crude is running out so maybe the quality has declined. Daryl > No, but as I explain later, Singapore is our cheapest/closest alternative > supplier of crude, so what it costs to buy thier oil and land it here sets > the price. That would *only* be true if that's what we were actually *doing*. It's kinda like saying Toyota Camry's are 15 thousand bucks in Singapore, so that's their price here. > Perhaps if they didn't stir up things in certain places around the world > there'd be less concern about the global supply of ham sandwiches. Their stirring, such as it is, has f.ck nothing to do with oil. > No we don't. We need to buy a substantial amount of other kinds of crude > to > supply industry, which is a *significant* consumer of oil products. That may well be, but that *doesn't* affect our ability to make petrol for our own domestic market, or how much it costs the local refineries to do so. > I think our crude is no good for making diesel either, so we gotta buy > oil. We make most of our own diesel but it's not as "clean" as that found in Europe, which is largely why new "hi-tech" diesel cars have been useless here until very recently. > Well, that's how markets work - producers seek to maximise profits - it's > what they do. *Some* do. The clever ones wouldn't invest heavily in a new venture only to set their prices at a level which would be likely to see them make an insignificant impact on the market. The Japanese car industry is a perfect example of this. When Japan first started exporting cars to Australia, they were not only significantly cheaper than their European counterparts, but offered a lot more for the money (both in terms of extra's *and* reliability :). They continued along that path until they became the dominant player in the field, and while they're not excessively cheap today they still offer a very good product for the money compared to similar vehicles from the other side of the world. The Koreans, and in particular Hyundai, are repeating that history as we speak. > They sell at $20, we say bugger off and buy the cheaper import, they sell > at > $18 and we by all their product and they've done themselves out of a $1 > per > sale. I imagine that this is how a very dumb person would structure their business. Henry Ford showed the world that you can make *far* more money by selling *lots* of items at a small fraction above what it costs you to make them, rather than a few at a great profit. > No it's not. Firstly, we are involved in the world market whether we like > it > or not - as I said before, we have to buy a *lot* of heavy crude. How much is "a lot", and what portion of that ends up coming out of your local petrol bowser? > Secondly, as much as you'd like it, private companies are > profit-maximising entities - > in fact company directors are legally obliged to maximise profit for > shareholders. Of course they are, and I'm not arguing that point. I don't expect the local oil companies to work for free, nor do I have anything against them making shitloads of money. They provide a product that we all use. What I *do* object to is the bullshit way they go about justifying the ever increasing price they sell their product for when their *costs* have remained largely unchanged for a very long time. The short answer here is that local oil companies are making record profits at the moment, and by the largest margins in their history. If the world oil price played such a big part in what they *must* sell their product for, then clearly this *wouldn't* be happening. > Selling oil at less than market prices because it's "good for Australia" > is > not what private companies are about. Fine. Let them go to the trouble of shipping it half way around the world and selling it to someone else. I don't know about you, but I know which market they'd rather play in :) > I didn't say they charge $19 because that's what they could get for it in > another market, it's because $19 is what the cheapest alternative would > cost > if they didn't sell any. I understood what you meant, but it's not really relevant is it? -- Regards, Noddy. > > No, but as I explain later, Singapore is our cheapest/closest alternative > > supplier of crude, so what it costs to buy thier oil and land it here sets > > the price. > > That would *only* be true if that's what we were actually *doing*. No, it's the only way of realistically pricing a commodity in this market. Without going drawing graphs, consider if they sold oil at a cheaper price - would they sell any more? Or is the national rate of petrol consumption pretty much fixed? How do they set a price? They set it based on what their competitor (Singapore) would charge. > > Perhaps if they didn't stir up things in certain places around the world > > there'd be less concern about the global supply of ham sandwiches. > > Their stirring, such as it is, has f.ck nothing to do with oil. Yes it does. It affects the futures market for oil, which affects the market price for oil. We don't live in a bubble. > > No we don't. We need to buy a substantial amount of other kinds of crude > > to > > supply industry, which is a *significant* consumer of oil products. > > That may well be, but that *doesn't* affect our ability to make petrol for > our own domestic market, or how much it costs the local refineries to do so. True, but my point was that we are not self-sufficient in oil, and non-petrol oil products make up an extremely important component of our industry and society. > > I think our crude is no good for making diesel either, so we gotta buy > > oil. > > We make most of our own diesel but it's not as "clean" as that found in > Europe, which is largely why new "hi-tech" diesel cars have been useless > here until very recently. I'm not really up on the manufacture of diesel - I thought our oil was relatively low in sulfur, but too "light" to make diesel, or didn't produce enought to meet demand. I thought the high-sulfur diesel was a result of buying cheaper sulfur-heavy oil. > > Well, that's how markets work - producers seek to maximise profits - it's > > what they do. [quoted text clipped - 17 lines] > The Koreans, and in particular Hyundai, are repeating that history as we > speak. All very true, but the market for oil is nothing like the market for cars. We buy as much petrol as we need for the week and no more, and broadly speaking, petrol is a fungible product - there is not much difference to the consumer between petrol made by one producer or another. There has been some effort to change this by marketing different fuels, which vary primarily by octane, under a "name" (ie. Vortex) in an attempt to create a brand differentiation, but ultimately consumers have seeked out the actual octane rating and, again, broadly speaking don't see caltex high-octane as being better or worse to Shell high-octane. > > They sell at $20, we say bugger off and buy the cheaper import, they sell > > at [quoted text clipped - 8 lines] > *lots* of items at a small fraction above what it costs you to make them, > rather than a few at a great profit. That decision is based on supply and demand. In an aggregate sense, if petrol was suddenly half the price, sales of petrol would not double. Sure, sales might shoot up in the short term, but there is only so much fuel a person can put in their tank, and only so much they can use in a week. Cheaper petrol, while delivering a benefit to consumers, would not improve profits for oil companies. > I don't expect the local oil companies to work for free, nor do I have > anything against them making shitloads of money. They provide a product that > we all use. What I *do* object to is the bullshit way they go about > justifying the ever increasing price they sell their product for when their > *costs* have remained largely unchanged for a very long time. What they say and what is the real reason often diverges, but the mechanics of oil prices aren't that much of a mystery. > The short answer here is that local oil companies are making record profits > at the moment, and by the largest margins in their history. If the world oil > price played such a big part in what they *must* sell their product for, > then clearly this *wouldn't* be happening. I will admit that there's evidence that indicates some market failure in retail petrol prices. Specifically (and it's another microeconomic analysis thing) but where demand is unchanged, but suppliers experience a price shock (as they did in terms of the price of crude rising), prices will rise, but supplier profits *should* theoretically decrease. Caltex recently posting record profits means that hasn't happened, which means prices are higher than they should be. So that indicates market failure, but the most plausible explanation is not an organised conspiracy (ie. a cartel) but rather a form of game-playing between the very few suppliers of petrol in our market - they each independantly realise that a price war with their competitors will only lead to a lower price across the market, and with aggregate demand not changing, they all (the petrol vendors) end up making less money. So they naturally tend to avoid competing with each other. > No, it's the only way of realistically pricing a commodity in this market. According to whom? What *other* companies besides the oil industry does this? > Without going drawing graphs, consider if they sold oil at a cheaper > price - > would they sell any more? Or is the national rate of petrol consumption > pretty much fixed? How do they set a price? They set it based on what > their > competitor (Singapore) would charge. That may be so, but what I'm talking about here is their justification for doing that, or the lack of it, when they're not selling oil overseas and we're not buying it to make petrol. Bascially, they're adopting a "f.ck you" attitude in saying that "this is what it would cost you *if* you had to use imported stuff". If any other industry in the world carried on like that there'd be uproar, but oil companies get away with it. Largely because they know we have no choice. > Yes it does. It affects the futures market for oil, which affects the > market > price for oil. We don't live in a bubble. It would be more accurate to suggest that whatever Israel does gives people a convenient excuse to up the price, regardless of whether it has any real impact or not. > True, but my point was that we are not self-sufficient in oil, and > non-petrol oil products make up an extremely important component of our > industry and society. Again, that has no bearing on the price at the bowser. Whatever crude we import for lubrication and industry is more than covered by the price the people who use it pay. Ever bought turbine lubricating oil? :) > I'm not really up on the manufacture of diesel - I thought our oil was > relatively low in sulfur, but too "light" to make diesel, or didn't > produce > enought to meet demand. I thought the high-sulfur diesel was a result of > buying cheaper sulfur-heavy oil. They've recently made some reasonably drastic changes to the quality of our diesel, but prior to that it used to have a very high sulphur content that really made it unsuitable for anything other than "low-tech" diesel engines. > All very true, but the market for oil is nothing like the market for cars. No, but it's no different than any other high volume consumer product such as milk, bread or the like. It's a necessary part of modern life that some people simply cannot do without. > We buy as much petrol as we need for the week and no more, and broadly > speaking, petrol is a fungible product - there is not much difference to > the > consumer between petrol made by one producer or another. No, there's not, but that *still* has little to do with us paying more that what we need to for it at the service station :) > There has been some effort to change this by marketing different fuels, > which vary primarily by octane, under a "name" (ie. Vortex) in an attempt [quoted text clipped - 3 lines] > actual octane rating and, again, broadly speaking don't see caltex > high-octane as being better or worse to Shell high-octane. Again, this is beside the point. Ther essential argument here is that we, as car owning consumers, are being held to ransom by local oil companies who are using the current oil crisis that affects *other* parts of the world as a perfect opportunity to exploit the absolute sh.t out of us and boost their profits through the roof. That's it in a nutshell. > That decision is based on supply and demand. In an aggregate sense, if > petrol was suddenly half the price, sales of petrol would not double. [quoted text clipped - 3 lines] > Cheaper petrol, while delivering a benefit to consumers, would not improve > profits for oil companies. There's no doubt in my mind that petrol demand in Australia has dropped in recent months. By exactly how much I can't tell you, but I would think it would be reasonably significant. People are hurting, with car use being kept to the absolute minimum, and it was reported recently (like, a couple of days ago) that public transport usage here in Victoria has gone through the roof. New car sales of traditional models like Falcons & Commodores are going through the floor, and it's having a dramatic flow on effect on the economy in relation to business. Yet, the oil companies continue to make record profits. I'm sure they've noticed that they're not selling as much petrol as they normally would, and I can't help but wonder if anyone amongst the executive staff has thought "Jeez, you know, we could drop our local price to "X". That would give people a bit of relief, we'd sell more petrol and make just as much money, and we could have a publicity campaign making ourselves out to be nice people actually doing something in the interests of the comminity" Still, probably not :) > What they say and what is the real reason often diverges, but the > mechanics > of oil prices aren't that much of a mystery. I never said they were. It's been bullshit for a very long time :) > I will admit that there's evidence that indicates some market failure in > retail petrol prices. Specifically (and it's another microeconomic [quoted text clipped - 5 lines] > record profits means that hasn't happened, which means prices are higher > than they should be. No argument here.... > So that indicates market failure, but the most plausible explanation is > not [quoted text clipped - 6 lines] > they all (the petrol vendors) end up making less money. So they naturally > tend to avoid competing with each other. Nice theory. I wonder if it'll ever be put into practice one day :) -- Regards, Noddy. > Bascially, they're adopting a "f.ck you" attitude in saying that "this is > what it would cost you *if* you had to use imported stuff". If any other > industry in the world carried on like that there'd be uproar, but oil > companies get away with it. But that justification is pretty much in line with free market economics. It may seem unfair, but it'd be deemed by any economist to be a correct way of pricing. > It would be more accurate to suggest that whatever Israel does gives people > a convenient excuse to up the price, regardless of whether it has any real > impact or not. It's a thing called expectations, and it's not unique to crude oil: there are a whole bunch of financial devices, broadly called derivatives, that work on expectations about the price at a future date, and they are commonly used to reduce risk in current transactions. As such, any change in the expected future price automatically affects the current market price. > No, but it's no different than any other high volume consumer product such > as milk, bread or the like. > > It's a necessary part of modern life that some people simply cannot do > without. My point is that from an economic point of view (and remember this social science is what sets prices) demand for petrol is significantly different to cars, although somewhat similar to bread and milk, and suppy of petrol is different to all of them. > I'm sure they've noticed that they're not selling as much petrol as they > normally would, and I can't help but wonder if anyone amongst the executive [quoted text clipped - 5 lines] > > Still, probably not :) Exactly, business is not meant to think about what is good for the community, they are meant to be as greedy and as utterly self interested as possible. Perversly, our entire free market system is based on the belief that by individuals being totally self interested, and acting only to benefit themselves, the market works most efficiently and the greatest amount of both producer profit and consumer benefit is produced. Yes, it sounds like bullshit, but it's the very basis of economics. > > So that indicates market failure, but the most plausible explanation is > > not [quoted text clipped - 8 lines] > > Nice theory. It's not my theory, it's one of many put forth to try and explain pricing in oligopolistic markets (ie. one with few suppliers) where there isn't collusion. If you think from the point of view of the petrol suppliers, it kind of makes sense. It's crap, as we pay more, but it isn't illegal. The other thing to consider is the short and long term. In the short term, the oil companies could knock 5-10c off their price.The government could reduce the 10% GST to 5%, which'd knock 7c of $1.40/litre. Or they could drop the 38c/litre excise a bit. That offers short term relief, but go 6 months down the track, what's the oil price going to be? I think the consensus is that oil is going to go up in price. I don't think anyone is arguing that it will somehow become cheaper. The only question is the point at which each of us significantly changes our consumption. >> Bascially, they're adopting a "f.ck you" attitude in saying that "this is >> what it would cost you *if* you had to use imported stuff". If any other [quoted text clipped - 6 lines] > of > pricing. ~~~~~~~~~~~ Why do Harry Kewell and other famous Aussie athletes play overseas? Because there is better money offered overseas. If local oil can't get world prices for their oil domestically, that oil will go overseas. That's how the free market: sell at the best price. Why would oil be any different? -- PeopleCanAlwaysMoveToVenezuelaIfTheyDon'tLikeAusPrices > >> Bascially, they're adopting a "f.ck you" attitude in saying that "this is > >> what it would cost you *if* you had to use imported stuff". If any other [quoted text clipped - 14 lines] > > Why would oil be any different? That's not quite the argument here. Exporting oil would fetch local crude producers the market price minus the cost of shipping, whereas they sell it here for the price that it would cost to source the oil from Asia including shipping. Clearly they get the better price selling locally. Why and how they get away with this has been explained elsewhere in this thread. > Yes, it > sounds like bullshit, but it's the very basis of economics. hehe  SignatureToby. quidquid latine dictum sit, altum viditur > But that justification is pretty much in line with free market economics. > It > may seem unfair, but it'd be deemed by any economist to be a correct way > of > pricing. What other industries follow this practice that you know of? > It's a thing called expectations, and it's not unique to crude oil: there > are a whole bunch of financial devices, broadly called derivatives, that > work on expectations about the price at a future date, and they are > commonly > used to reduce risk in current transactions. As such, any change in the > expected future price automatically affects the current market price. It's called "speculation", and it's about as accurate as lying on your back and pissing straight up into the air to check the wind velocity. > My point is that from an economic point of view (and remember this social > science is what sets prices) demand for petrol is significantly different > to > cars, although somewhat similar to bread and milk, and suppy of petrol is > different to all of them. Indeed, and that's the part that I'm most interested in :) Not the who, what, where or why we need it, but why *local* manufacturers can get away with charging a "world" price when the world price has no impact on their costs to produce petrol. > Exactly, business is not meant to think about what is good for the > community, they are meant to be as greedy and as utterly self interested > as > possible. Of course, but they (being the oil companies), would currently be in a dead heat as to being the most thoroughly hated organisations in the country along with banks. In fact, I'd go so far as to suggest that they are *more* despised than banks, as while banks rob you, they tend to do it when you aren't looking. Oil companies don't give a flying f.ck if you're looking or not. > Perversly, our entire free market system is based on the belief > that by individuals being totally self interested, and acting only to > benefit themselves, the market works most efficiently and the greatest > amount of both producer profit and consumer benefit is produced. Yes, it > sounds like bullshit, but it's the very basis of economics. It *still* sounds like bullshit, and there have been quite remarkable success stories to the contrary. Henry Ford could tell a few, and the entire American car industry itself is a perfect example. > It's not my theory, it's one of many put forth to try and explain pricing > in > oligopolistic markets (ie. one with few suppliers) where there isn't > collusion. If you think from the point of view of the petrol suppliers, it > kind of makes sense. It's crap, as we pay more, but it isn't illegal. None of what they're currently doing is illegal, but that doesn't make it *right*. > The other thing to consider is the short and long term. In the short term, > the oil companies could knock 5-10c off their price.The government could > reduce the 10% GST to 5%, which'd knock 7c of $1.40/litre. Or they could > drop the 38c/litre excise a bit. That offers short term relief, but go 6 > months down the track, what's the oil price going to be? I would think that in a world were everything is supposed to work *properly*, what the future price of oil is in 6 months time will only concern you if you have to *buy* the sh.t :) There's absolutely no hope whatsoever of the excise being scrapped, as it earns the government *far* too much money (which, in itself is largely why they're very quiet on the price of petrol themselves). The GST component should be abolished immediately, as it's nothing more than a "tax on a tax". > I think the consensus is that oil is going to go up in price. I don't > think > anyone is arguing that it will somehow become cheaper. The only question > is > the point at which each of us significantly changes our consumption. This is the typical scaremongering bullshit that I simply don't understand (not by you, but just in general). The price of oil could be dropped by 75% *tomorrow*, if the oil producing nations decided to increase their output. None of them are working to capacity, and most of them get together to have "regular meetings" to decide what their output should be (or, in other words, what the world should pay). The demand for oil by countries like China & India, while having increased in recent years, hasn't been anywhere near as "sudden" as most people have been lead to believe, and as far as I'm aware there currently aren't any countries having problems due to the lack of available fuel. So, remind me again why the price is currently so high? -- Regards, Noddy. >> Bascially, they're adopting a "f.ck you" attitude in saying that "this is >> what it would cost you *if* you had to use imported stuff". If any other [quoted text clipped - 4 lines] > may seem unfair, but it'd be deemed by any economist to be a correct way of > pricing. There be the problem in a nutshell, the world is controlled by paper pushing fuckwits who don't do any real work but eat into profits and cause inflated prices. Get rid of scams like the futures markets and watch the prices tumble. If oil was sold on a cost plus a reasonable margin the price would be a fraction of what we pay now. >> It would be more accurate to suggest that whatever Israel does gives > people [quoted text clipped - 12 lines] >> It's a necessary part of modern life that some people simply cannot do >> without. Whats necessary about prices inflated to make big money for people who do nothing other than shuffle paper around, its nothing other than a scam. Daryl > Get rid of scams like the futures markets and watch the prices tumble. > If oil was sold on a cost plus a reasonable margin the price would be a > fraction of what we pay now. ~~~~~~~~~~~ You definitely sound like the One Nation website now. -- AreYouReallyPaulineHanson? > You definitely sound like the One Nation website now. No he doesn't... He'd have to say something like "f.ck off back to your shitty little Asian shithole you stupid Gook" to do that :) -- Regards, Noddy. >> Get rid of scams like the futures markets and watch the prices tumble. >> If oil was sold on a cost plus a reasonable margin the price would be a >> fraction of what we pay now. > ~~~~~~~~~~~ > You definitely sound like the One Nation website now. If they have a web site I've never seen it. > AreYouReallyPaulineHanson? If I were her you should be extremely frightened because you will soon be arrested and deported:-) Daryl >> ~~~~~~~~~~~ >> You definitely sound like the One Nation website now. > > If they have a web site I've never seen it. ~~~~~~~~~ One Nation are feeding on the fears of the ignorant and misinformed. >> AreYouReallyPaulineHanson? >> > If I were her you should be extremely frightened because you will soon be > arrested and deported:-) ~~~~~~~~~~~~ Wouldn't mind getting wrongly deported. Then I can sue the govt for millions so I can finally afford a Bentley Continental GT or an Aston Martin DB9! :-) -- InTheSpiritOfAusCars >>> ~~~~~~~~~~~ >>> You definitely sound like the One Nation website now. [quoted text clipped - 10 lines] > Wouldn't mind getting wrongly deported. Then I can sue the govt for millions > so I can finally afford a Bentley Continental GT or an Aston Martin DB9! :-) Why would deporting you be wrong, you clearly don't belong here, you don't think or behave like an Aussie? Daryl > Why would deporting you be wrong, you clearly don't belong here, you don't > think or behave like an Aussie? ~~~~~~~~~~~~ Can you define how an Aussie should think or behave? -- WhiteAustraliaIsPast >> Why would deporting you be wrong, you clearly don't belong here, you don't >> think or behave like an Aussie? > ~~~~~~~~~~~~ > Can you define how an Aussie should think or behave? Anyone different to you. > -- > WhiteAustraliaIsPast Colour or race has nothing to do with it, I know lots of Asian people who would disagree with almost everything you say. Daryl >>> Why would deporting you be wrong, you clearly don't belong here, you >>> don't think or behave like an Aussie? >> ~~~~~~~~~~~~ >> Can you define how an Aussie should think or behave? >> > Anyone different to you. ~~~~~~~~~~~~ RIGHT. -- YouMustBeRunningOutOfAmmunition >>> So our best hope for cheaper petrol is if someone starts to import it to >>> try to compete with our local suppliers. [quoted text clipped - 30 lines] > sandwiches in Australia? > Answer: $19 Not even close. I'd sell them for $9.50 which would cause the London sandwich maker to drop their price or go out of business. Because London sandwich makers are greedy thieves they won't lower their prices so their market in Australia will disappear and I will have the lot, I will then increase my price to $12.00 and at that price I will still be making megabucks and the consumers will think I'm a hero:-) > Let's say you now open a local shop and start selling ham sandwiches which > are exactly the same as the London one. Consumers don't care, they'll buy [quoted text clipped - 5 lines] > sell everything you could make, but for every sale you'd be foregoing $1 you > could have made. So the answer is $19. Why would that be a problem since I would already be making a huge profit at $18.00. Not all business people are greedy thieving pricks, it is possible to make a decent profit ethically without making your customers bleed. Daryl >> First question: in this scenario, what will be the market price of ham >> sandwiches in Australia? [quoted text clipped - 7 lines] > lot, I will then increase my price to $12.00 and at that price I will > still be making megabucks and the consumers will think I'm a hero:-) ~~~~~~~~~~~~ If you sell at $9.50, several things can happen: - The sandwich customers will think that ysou have "dodgy" sandwiches. There's a saying that if it's too good to be true, it probably is. You end up with NO CUSTOMERS. - if sandwich customers did bite, you will get a pile of customers that soon you will run out of sandwiches. You will be out of sandwiches before the London sandwich maker is out of business. >> Second question: What price will you sell your sandwiches for? >> Answer: Well, you could try and sell them for $20, but you won't sell any [quoted text clipped - 8 lines] > Not all business people are greedy thieving pricks, it is possible to make > a decent profit ethically without making your customers bleed. ~~~~~~~~~~ GREED IS GOOD. Without high sandwich prices, there will be no incentive to explore for more sandwiches. -- VegemiteDoesn'tCount > GREED IS GOOD. Without high sandwich prices, there will be no incentive to > explore for more sandwiches. Bullshit, there is still lots of profit when its sold for half the price. Daryl >> GREED IS GOOD. Without high sandwich prices, there will be no incentive >> to explore for more sandwiches. > > Bullshit, there is still lots of profit when its sold for half the price. ~~~~~~~~~~~~ That's correct if you don't account for the cost of sandwich exploration, failed or otherwise. -- BottomOfTheIcebergWeKeepMissing > >> GREED IS GOOD. Without high sandwich prices, there will be no incentive > >> to explore for more sandwiches. [quoted text clipped - 6 lines] > -- > BottomOfTheIcebergWeKeepMissing You forgetting that it is a bit of "We just found a cash cow!!! and are milking it, Ooops- we just found it paid our finder's fee (and costs of other failed exploits)", however fail to tell anyone about that minor detail or do anything about reducing it's price? >> > Bullshit, there is still lots of profit when its sold for half the >> > price. [quoted text clipped - 10 lines] > anyone about that minor detail or do anything about reducing > it's price? ~~~~~~~~~~~ Cash cow is good. Would you rather that noone bother exploring anymore? -- ProfitRulesTheWorld >>> GREED IS GOOD. Without high sandwich prices, there will be no incentive >>> to explore for more sandwiches. >> Bullshit, there is still lots of profit when its sold for half the price. > ~~~~~~~~~~~~ > That's correct if you don't account for the cost of sandwich exploration, > failed or otherwise. Oil exploration isn't as expense as you make out. A mates brother in law in the US started an oil company about 30 yrs ago with an initial investment of US$10,000 (used personal savings to drill an oil well). That company sold last year for more than US$3billion, unfortunately for the companies founder when it was sold he was no longer a major shareholder but even so he's still a very wealthy man made from an initially very small investment. He made a bet that paid off and thats what all investors in that business are doing, if it fails they should bear the losses. Any smart investor knows that the gains from a high risk investment are much much higher than from low risk investments but the risks are also greater, if they are not prepared to take the risk they should be in another business. Daryl Daryl > Oil exploration isn't as expense as you make out. > A mates brother in law in the US started an oil company about 30 yrs ago > with an initial investment of US$10,000 (used personal savings to drill an > oil well). ~~~~~~~~~~~ That investor got lucky. How about offshore rigs? How far will your US$10k go with offshore explorations? > That company sold last year for more than US$3billion, unfortunately for > the companies founder when it was sold he was no longer a major > shareholder but even so he's still a very wealthy man made from an > initially very small investment. ~~~~~~~~~ Good for him. > He made a bet that paid off and thats what all investors in that business > are doing, if it fails they should bear the losses. ~~~~~~~~~~~ And if they succeed, they should also REAP the benefits. No bleeding heart communist should force them to lower oil prices. It works both ways. > Any smart investor knows that the gains from a high risk investment are > much much higher than from low risk investments but the risks are also > greater, if they are not prepared to take the risk they should be in > another business. ~~~~~~~~~~~ And those investors are now making a killing with high oil prices. I salute them. -- TheyDeserveEverySingleCentOfThoseProfits > >>> So our best hope for cheaper petrol is if someone starts to import it to > >>> try to compete with our local suppliers. [quoted text clipped - 38 lines] > lot, I will then increase my price to $12.00 and at that price I will > still be making megabucks and the consumers will think I'm a hero:-) You didn't read the example properly. In the initial scenario there is only one supplier of ham sandwiches, London. If you want a sandwich (and everyone does) then $19 is what you pay. > > Let's say you now open a local shop and start selling ham sandwiches which > > are exactly the same as the London one. Consumers don't care, they'll buy [quoted text clipped - 10 lines] > Not all business people are greedy thieving pricks, it is possible to > make a decent profit ethically without making your customers bleed. Sure, not every business seeks to maximise profits, but there's no law against trying to do so. > If a take away food shop started selling ham sandwiches at 19 bucks a > pop "because that's what they sell for in London", someone from some > government department would be up them so fast they'd get a nose > bleed. No they wouldn't. the gov't department would ignore them, because all the other take aways would still be selling the sandwiches for $5 (or whatever they go for in Sydney). If all the take aways got together, and decided to sell for $19, ACCC might get interested in teh collusion aspect. Then again, the NSW ski resorts have been doing this for years, and getting away with it, so there you go. Signatureant >> I'll play. The sell it here at these prices because we are prepared to >> pay these prices. They could sell it overseas for the same price, no? [quoted text clipped - 11 lines] > > Can you spell "rort"? Do you think petrol companies are charities? > -- > Regards, > Noddy. > Do you think petrol companies are charities? ~~~~~~~~~~~` Every LEFTIE wants SOMETHING for NOTHING. -- KarlMarxWasWrong > Do you think petrol companies are charities? No, I don't, and I'm not against them making profits. However, I'm against the totally bullshit principal of using prices in other countries as some form of ridiculous justification for what they can charge here. What the price of oil sells for on the "world market" is completely irrelevant to *anyone* unless that's the market you're actually trading in. If you're happy with the fact that local oil companies are using what's happening in *other* parts of the world to rip the absolute piss out of you, then so be it. -- Regards, Noddy. >> Do you think petrol companies are charities? > [quoted text clipped - 3 lines] > price of oil sells for on the "world market" is completely irrelevant to > *anyone* unless that's the market you're actually trading in. I was under the impression that oil is sold on the world market. Silly me. > If you're happy with the fact that local oil companies are using what's > happening in *other* parts of the world to rip the absolute piss out of > you, then so be it. If they sold it cheaper then other countries would buy it. > -- > Regards, > Noddy. > I was under the impression that oil is sold on the world market. Silly me. > If they sold it cheaper then other countries would buy it. Hmmm, something is f.cked then ... http://money.cnn.com/pf/features/lists/global_gasprices/ The difference between $0.12 and $6.48 is a little interesting, and even that is an older price table. Nup, a bunch of very corrupt folk pushing the limits. GovCo policy, they tell us. Like Ok, a $15 ham sandwhich and a $19 one I'd find plausible - not this shite though. The whole thing from bottom to top does not make sense, and needs a huge clean up. >> I was under the impression that oil is sold on the world market. Silly >> me. If they sold it cheaper then other countries would buy it. [quoted text clipped - 14 lines] > The whole thing from bottom to top does not make sense, > and needs a huge clean up. You could make the same sort of comparison for virtually anything. As the article says, the top prices have a very large tax component and the lowest prices are subsidised by the governments that in most cases own an oil monopoly in that country. The other distorting factor is artificial exchange rates. Pick a more universally used food (won't find many ham sandwiches in Muslim countries) for your pricing such as rice, and I suspect you would find a similar variation in price, although not as wide, since I doubt any country taxes it heavily, although quite a few subsidise it. JD > You could make the same sort of comparison for virtually anything. As the > article says, the top prices have a very large tax component and the lowest [quoted text clipped - 5 lines] > since I doubt any country taxes it heavily, although quite a few subsidise > it. Yep, however the top and bottom numbers in the table are more than a little far apart to explain that. The fact of the matter as it appears to me, is it is a substance of very little value when you look at the difference in global end market servo pump costs. Combine that with engine oil prices actually going *down* over the last couple of years in the _same product_ I actually purchase from the _same_ auto parts store, it's not right. It's a scam. Now, the argument that the price should be made high to avoid wasteage/pollution is another one entirely, that would be a totally different issue to address. I can, and do from time to time, leave OilCo alone, and make me own fuel for $0.20 to $0.30 cents a litre (biodiesel is a little time consuming though). I don't waste it, drive a large/heavy but fuel efficient vehicle, however I quite frankly don't think the profits from OilCo and GovCo are going in quite the right directions, more places they really, really *should not* be going. In that regard, I'd be happier if they behaved themselves - impose a quota if that is what it takes to what each person can consume, in order to preserve the environment/resources/whatever, however charge it at an appropriate and fair price. Of course that would require some sort of individual buyer accounting system that would be open to abuse, and yadda yadda yadda. > It's a scam. ~~~~~~~~~~ You will never understand so quit thinking about it. -- SomeOfUsAreNotFitToBeEnterpreneurs > > It's a scam. > ~~~~~~~~~~ > You will never understand so quit thinking about it. > > -- > SomeOfUsAreNotFitToBeEnterpreneurs You got ties with OilCo? IFFoodWorkedThatWayALotOfFolkWouldBeFuckedHintItDoesn't >> > It's a scam. >> ~~~~~~~~~~ [quoted text clipped - 4 lines] > > You got ties with OilCo? ~~~~~~~~~~ I certainly do not. But I worked for an OilCo sometime ago and thus I understand how the oil business works. Bottomline: the OilCo's are just middlemen. Their profits are PISS in the OCEAN. When oil prices are high, their margins are chewed up. If you can't understand that now, I'm afraid you never will. -- AndRetailersAreEvenWorseOff >>>> It's a scam. >>> ~~~~~~~~~~ [quoted text clipped - 10 lines] > OCEAN. When oil prices are high, their margins are chewed up. If you can't > understand that now, I'm afraid you never will. Which part of the record high profits they are currently making don't you understand? > -- > AndRetailersAreEvenWorseOff Because they are being screwed by the very greedy oil companies who are making record profits. Daryl > Which part of the record high profits they are currently making don't you > understand? ~~~~~~~~~~ Record profits? Where? -- PleaseCiteASource > Record profits? Where? Jesus, it's only been announced on every news outlet for the past month :) -- Regards, Noddy. >> Which part of the record high profits they are currently making don't you >> understand? > ~~~~~~~~~~ > Record profits? Where? Here... http://www.usatoday.com/money/companies/earnings/2006-01-30-exxonmobil_x.htm Here... http://www.theopenpress.com/index.php?a=press&id=8391 Here... http://transcripts.cnn.com/TRANSCRIPTS/0605/04/i_ins.00.html Here... http://www.wsws.org/articles/2005/oct2005/oil-o29.shtml Here... http://abcnews.go.com/WNT/story?id=1029991 And here... http://www.usatoday.com/money/industries/energy/2005-10-28-oil-profit-usat_x.htm ?POE=NEWISVA And many, many more here. http://www.google.com.au/search?hl=en&q=oil+record+profits&btnG=Search&meta= Wasn't very hard to find either... Results 1 - 10 of about 34,900,000 for oil record profits. (0.72 seconds) YouMustBeAnOilCoStooge Signaturea9x5l > Here... > http://www.usatoday.com/money/companies/earnings/2006-01-30-exxonmobil_x.htm [quoted text clipped - 23 lines] > > YouMustBeAnOilCoStooge Owned :) Nice work :) -- Regards, Noddy. >>> Which part of the record high profits they are currently making don't >>> you [quoted text clipped - 23 lines] > > http://www.google.com.au/search?hl=en&q=oil+record+profits&btnG=Search&meta= ~~~~~~~~~~~~~ I don't take news from the media too seriously. The media aren't interested in the truth. They're into sensationalism to sell more. Let me quote Aus companies: "The Shell Companies in Australia today announced a profit before interest and tax for calendar year 2005 of AUD$1.268 billion, up from AUD$751.5* million in 2004. This represents a return on average capital employed of 13%." (http://www.shell.com/home/Framework?siteId=au-en&FC2=&FC3=/au-en/html/iwgen/news _and_library/news/news2006/annual_results.html) "The average price of all petroleum products sold by Caltex (including GST) increased 14.6 cents per litre. Of this increase, 13.5 cents per litre was crude oil prices and other costs, 0.9 cents per litre was higher tax (including GST) and 0.2 cents per litre was increased Caltex profit (2005: 2.2 cpl, 2004: 2.0 cpl, RCOP basis)." (http://www.caltex.com.au/pricing_pla.asp#q8) "Return on average capital ... was 20%, compared to 16% in 2004." (http://www.bp.com/liveassets/bp_internet/annual_review/annual_review_2005/STAGIN G/local_assets/downloads_pdfs/b/bp_ara_2005_annual_review.pdf) The above figures can hardly be considered GOUGING. -- TwentyPercentROIisNormalAndNotExcessive > I don't take news from the media too seriously. The media aren't > interested in the truth. They're into sensationalism to sell more. Really? Yet you're happy to sit back and let oil industry propaganda sheets "explode the myths" for you? Jesus Christ :) <snip> > The above figures can hardly be considered GOUGING. What those figures tell you are that *your* claims of increases in oil market prices eating into oil company bottom lines are f.cking fairy-tales. What they tell anyone else is the higher the price, the more they make :) -- Regards, Noddy. > Let me quote Aus companies: > [quoted text clipped - 18 lines] > > The above figures can hardly be considered GOUGING. No matter how you look at it they are record profits which is what I said, you proved me to be correct. > -- > TwentyPercentROIisNormalAndNotExcessive It isn't but many business's earn lower percentages and are still very profitable, you only need a small margin when you have a massive turnover. eg No Australian car manufacturer makes 20% profit long term. Daryl > No matter how you look at it they are record profits which is what I said, > you proved me to be correct. ~~~~~~~~~~~~ Facts without proper context are misleading info. The bottomline: (Record profits) / (Record sales) = Average return on investment > eg No Australian car manufacturer makes 20% profit long term. ~~~~~~~~~~~ Without government assistance, the car mfg industry would have long closed shop in this country. You want the same for the oil industry? -- YouWantToReturnToPetrolRationsOfTheSeventies? > Without government assistance, the car mfg industry would have long closed > shop in this country. You want the same for the oil industry? Hate to break the bad news to you, but oil companies *do* get assistance from Government, by way of a very profitable partnership :) > YouWantToReturnToPetrolRationsOfTheSeventies? What country was that in? It certainly wasn't here. -- Regards, Noddy. >> No matter how you look at it they are record profits which is what I said, >> you proved me to be correct. > ~~~~~~~~~~~~ > Facts without proper context are misleading info. The bottomline: > > (Record profits) / (Record sales) = Average return on investment = record profits, no matter what bullshit you come up with you cannot change the fact the oil co's are currently making record profits. >> eg No Australian car manufacturer makes 20% profit long term. > ~~~~~~~~~~~ > Without government assistance, the car mfg industry would have long closed > shop in this country. You want the same for the oil industry? Good idea. > -- > YouWantToReturnToPetrolRationsOfTheSeventies? WTF are you on about, only time we have ever had petrol rationing was due to industrial disputes. Daryl >> ~~~~~~~~~~~ >> Without government assistance, the car mfg industry would have long >> closed shop in this country. You want the same for the oil industry? >> > Good idea. ~~~~~~~~~~~~~ Very smart!!! -- TheBuckWheatsHaveTakenOverTheLand >> Which part of the record high profits they are currently making don't you >> understand? [quoted text clipped - 3 lines] > -- > PleaseCiteASource Are you deaf and blind? Stories about oil co record profits are in newspapers almost everyday. Take your head out of the sand for a moment and you might learn something. Daryl > Bottomline: the OilCo's are just middlemen. Their profits are PISS in the > OCEAN. When oil prices are high, their margins are chewed up. If you can't > understand that now, I'm afraid you never will. So who prezactly is making cash on this if it is not OilCo or GovCo?, Arabs don't produce the world's totally supply - I'd guess they are way less than 50% > AndRetailersAreEvenWorseOff Agree strongly with that - totally ferked - seen a lot of 'em closed down. >> Bottomline: the OilCo's are just middlemen. Their profits are PISS in the >> OCEAN. When oil prices are high, their margins are chewed up. If you >> can't >> understand that now, I'm afraid you never will. > > So who prezactly is making cash on this if it is not OilCo or GovCo?, ~~~~~~~~~~ It's the oil wells which are making the cash. The OilCo's do not own the oil wells. The OilCo's are mere traders who buy crude, refine it and then sell it as petrol. -- GovCoDoesNotOwnTheOilWellsEither > It's the oil wells which are making the cash. The OilCo's do not own the > oil wells. The OilCo's are mere traders who buy crude, refine it and then > sell it as petrol. What, all of them? Every single one? -- Regards, Noddy. > Bottomline: the OilCo's are just middlemen. Their profits are PISS in the > OCEAN. When oil prices are high, their margins are chewed up. If you can't > understand that now, I'm afraid you never will. Perhaps you can explain then how it is it that Australian oil companies are currently making record profits, which seem to rise in relation to the market price for oil? Don't worry, I'll wait for you to find some ridiculous oil company provided web page explaining it all. -- Regards, Noddy. > > It's a scam. > ~~~~~~~~~~ > You will never understand so quit thinking about it. > -- > SomeOfUsAreNotFitToBeEnterpreneurs Some of us don't wanna rip orf others, or see those ill gotten gains go to something that may work against us, based on our labour input in paying for it. ISeeEnterpreneurs,HoweverYourBusinessIdeaIsAreSus >> > It's a scam. >> ~~~~~~~~~~ [quoted text clipped - 3 lines] > > Some of us don't wanna rip orf others, ~~~~~~~~~~~ The definition of 'RIP OFF' is where we will beg to differ. -- EveryoneExercisesFreeWill > The definition of 'RIP OFF' is where we will beg to differ. Yeah. We all know what it is, and you don't have a f.cking clue. -- Regards, Noddy. > You will never understand so quit thinking about it. Lol ;) The ultimate irony right there folks :) -- Regards, Noddy. > The whole thing from bottom to top does not make sense, > and needs a huge clean up. ~~~~~~~~~~ Go clean up your 'Lux first before you try to clean up disparate pricing. -- CountriesWithLowPetrolPricesAreBasketCases > I was under the impression that oil is sold on the world market. Silly me. Yep, silly you. Australian oil isn't. > If they sold it cheaper then other countries would buy it. Riiight. -- Regards, Noddy. > Australian oil isn't. We buy oil on the world market. Should we have 1 price for each? >> If they sold it cheaper then other countries would buy it. > > Riiight. Why wouldn't they? Shipping oil can't cost much per litre so if the difference was more than that then other countries would buy it. Michael > We buy oil on the world market. Should we have 1 price for each? We buy *some* oil from overseas suppliers, and to my knowledge none of it goes towards the manufacture of petrol. However, our petrol prices are based on what it *would* cost to make the stuff *if* we were using imported oil to do so. It's like some guy coming to your place to steam clean your carpets, and charging you what it would cost him to fly first class to London *if* he had to do that :) > Why wouldn't they? Shipping oil can't cost much per litre so if the > difference was more than that then other countries would buy it. Firstly the government wouldn't allow the local companies to export their oil if it created a shortfall on the local market, and I'd be surprised if there wasn't already some regulation in place that protected against this, and secondly the price would have to be cheap enough to make the idea of shipping oil from here to anywhere else an attractive idea. Two things that are probably very unlikely. -- Regards, Noddy. > We buy *some* oil from overseas suppliers, and to my knowledge none of it > goes towards the manufacture of petrol. However, our petrol prices are > based on what it *would* cost to make the stuff *if* we were using > imported oil to do so. Sounds reasonable to me. > It's like some guy coming to your place to steam clean your carpets, and > charging you what it would cost him to fly first class to London *if* he > had to do that :) It's nothing like that. > Firstly the government wouldn't allow the local companies to export their > oil if it created a shortfall on the local market, Really? Have you got some evidence of this anti competetive behaviour? > and I'd be surprised if there wasn't already some regulation in place that > protected against this, Oh, so you don't :-) > and secondly the price would have to be cheap enough to make the idea of > shipping oil from here to anywhere else an attractive idea. That was my point, if the price was cheaper it would become attractive. > Two things that are probably very unlikely. Obviously they are very unlikely because the price is currently equal so they may as well get it locally, but once the price dropped it would become more than likely :-) Michael > Sounds reasonable to me. You're in a very select minority :) > It's nothing like that. It's *exactly* like that. The oil companies are telling you that this is the price you *must* pay, simply becuase if they didn't charge it someone else would. > Really? Have you got some evidence of this anti competetive behaviour? No. Have you got any that says they wouldn't? > Oh, so you don't :-) Michael, do you *honestly* think that if the local oil companies could do better by exporting their oil overseas, and creating a shortfall for domestic use in the prcoess, that *any* government would happily sit back and let them? If you do, then "clueless" wouldn't go *close* to describing you :) > That was my point, if the price was cheaper it would become attractive. It would have to be significantly cheaper, to |
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