Is Gordon finally driving oil companies out of the UK?

#2
And of course, oil companies are not/have not been making record profit's over the last few years. Taxation is only part of the story. The Goverment might well be able to lower tax on petrol and diesel etc but are the oil companies going to lower their profit margins, and, inspite of doing that, still make billions? Don't hold your breath.
 
#3
rgjbloke said:
And of course, oil companies are not/have not been making record profit's over the last few years. Taxation is only part of the story. The Goverment might well be able to lower tax on petrol and diesel etc but are the oil companies going to lower their profit margins, and, inspite of doing that, still make billions? Don't hold your breath.
And your point is? The cost of oil is minuscule at the petrol / diesel pump compared with the tax levied. The oil companies make people wealthy. What does this government do with the oil revenue?
 
#5
Imagine that, a corporation out to make money, I'm outraged.
 
#7
rgjbloke you dont see the connection between profit and taxation. The government never lowers taxes on oil, in fact they take several bites at the same apple in terms of taxation. You obviously arent aware how much it costs to explore, drill, pump crude and transport it, then refine it transport it to the point of sale where finally it turns into hard cash. It all costs money, and at almost every stage the taxman is there to take a bite of this "big profit" cherry.

Currently the government takes about 72 pence per litre in taxes at the pump, it also takes levies from the exploration and then it taxes the company for making profits, this is without the money it takes in tax from a company's employees. If BP, Shell et al manage to make a profit out of this well good on them. Someone has to be profit from the massive expense of exploration.
 

mercurydancer

LE
Book Reviewer
#8
The oil companies arent stupid, which is more than I can say about our beloved Prime Minister.

If the taxes at every stage of producing fuel at all levels from research to processing exceed the profit made then the companies are going to start to shut refineries. This means that another strand of strategic necessity is required to be shipped in, as gas is now. This means that the oil companies are going to charge exorbitantly for that porduct, but as master economists, Darling and Brown will know that this will cripple our economy.

If the tax burden was lessened on petrochemicals then many unprofitable plants may be viable again.


If whitecity is online, and this is not a wind-up, could you please explain why petrol is 1.17 a litre whilst crude oil is about 90 dollars a barrel? I simply cannot fathom why it should be thus.
 
#9
I understand perfectly what oil companies pay to get it out of the ground, refine it and get it to the pump. It's an awful lot of money. I also know that successive Governments have taxed the whole process to the hilt to squeeze as much as they can out of it. I'm aware that because of the recession, oil company profits are being squeezed as well but Shell for example last year still made the best part of £9 billion and that's a 45% reduction from profits from the previous year, a recession year. Inspite of the drop BP group chief executive Tony Hayward said 2009 had been a "very good" year. No doubt, as we come out of recession, their profits will pick up again and they will regain that 45% pushing their profits back up to somewhere in the £16 billion area. My point is simply, the Government should bring down the taxation on fuel, but that is only part of the story. The oil companies make huge profits, even in a recessionary year. I think they could all lower their prices, and still walk away with substantial profits. The consumer win's on two counts! There is more to high fuel prices than just the tax element of it.
 
#10
rgjbloke the "oil companies" make their money out of lots of different things, oil being one product. Chemicals, exploration and research are among the others, and these profits are made worldwide. You are being simplistic to claim that all their profits come from you filling your car up at the local garage.

If the oil companies make less return what incentive is there for them to get the oil out of the ground in the first place? It takes huge investment in terms of finance and time to get a profit on oil.
 
#11
rgjbloke said:
I understand perfectly what oil companies pay to get it out of the ground, refine it and get it to the pump. It's an awful lot of money. I also know that successive Governments have taxed the whole process to the hilt to squeeze as much as they can out of it. I'm aware that because of the recession, oil company profits are being squeezed as well but Shell for example last year still made the best part of £9 billion and that's a 45% reduction from profits from the previous year, a recession year. Inspite of the drop BP group chief executive Tony Hayward said 2009 had been a "very good" year. No doubt, as we come out of recession, their profits will pick up again and they will regain that 45% pushing their profits back up to somewhere in the £16 billion area. My point is simply, the Government should bring down the taxation on fuel, but that is only part of the story. The oil companies make huge profits, even in a recessionary year. I think they could all lower their prices, and still walk away with substantial profits. The consumer win's on two counts! There is more to high fuel prices than just the tax element of it.
Oil companies make big profits because they are big companies. To get a meaningful figure you need to look at profits in terms of percentages of capital or turnover. Finally if you think that oil companies are making excessive profits, buy some shares and get a cut.
 
#12
Mobat said:
rgjbloke said:
I understand perfectly what oil companies pay to get it out of the ground, refine it and get it to the pump. It's an awful lot of money. I also know that successive Governments have taxed the whole process to the hilt to squeeze as much as they can out of it. I'm aware that because of the recession, oil company profits are being squeezed as well but Shell for example last year still made the best part of £9 billion and that's a 45% reduction from profits from the previous year, a recession year. Inspite of the drop BP group chief executive Tony Hayward said 2009 had been a "very good" year. No doubt, as we come out of recession, their profits will pick up again and they will regain that 45% pushing their profits back up to somewhere in the £16 billion area. My point is simply, the Government should bring down the taxation on fuel, but that is only part of the story. The oil companies make huge profits, even in a recessionary year. I think they could all lower their prices, and still walk away with substantial profits. The consumer win's on two counts! There is more to high fuel prices than just the tax element of it.
Oil companies make big profits because they are big companies. To get a meaningful figure you need to look at profits in terms of percentages of capital or turnover. Finally if you think that oil companies are making excessive profits, buy some shares and get a cut.
Indeed, I recommend a company called Tesco. I've worked with there eqpt a few times in the North sea, and apparently its the future etc

Worth buying shares in allegedly, from what I hear.
 
#13
The oil companies profit margins in the UK are large. The only reason they are moving is that they know that if they sell their UK assets and invest in emerging markets, they'll make even more money because the workers are cheaper and demand is only going to go up. In the UK, you pay developed world wages, and demand is only going to go down as everyone who wants one already has a car, and cars are only going to get more economical and run increasingly on non-oil products. If someone is being paid a wage of £100m a year and leaves for another job paying £150m, they couldn't plausably claim that they left their first job because their employer was screwing them. That's the level of BS the oil companies want you to buy.
 
#14
Here's an alternative to taxing fuel. Tax ready meals and junk food.....! Kills two birds with one stone as the fat will either start eating less, or continue to stuff their fat faces and as such, susidise us car user's. All those fatties that give up the pies will then also be less of a drain on the NHS, so whichever government is in office will then be able to lower taxes.

Simples....
 

Mr_Fingerz

LE
Book Reviewer
#15
parapauk said:
The oil companies profit margins in the UK are large. The only reason they are moving is that they know that if they sell their UK assets and invest in emerging markets, they'll make even more money because the workers are cheaper and demand is only going to go up. In the UK, you pay developed world wages, and demand is only going to go down as everyone who wants one already has a car, and cars are only going to get more economical and run increasingly on non-oil products. If someone is being paid a wage of £100m a year and leaves for another job paying £150m, they couldn't plausably claim that they left their first job because their employer was screwing them. That's the level of BS the oil companies want you to buy.
I have no qualms with your conclusion, just one or two with your arguments... bear with me.

a) Downstream (that is refinery onwards) margins are incredibly tight for the oil companies - and that is not because of excise duties (they all pay the same rate per litre, and recover it as a commercial transaction), but because of competition. Last time I looked there were 8 major oil refineries in the UK (Fawley, 2*Milford Haven, Stanlow, Grangemouth, Tees, Killingholme/Immingham, and Stanford le Hope), and there a numerous other production premises within the UK. If anything since the closure of Shellhaven refinery, there has been a refinery under-capacity in the UK.

b) We have either hit, or are very close to "Peak Oil", so all of the refiners will have to diversify if they want to live.

c) We are about to have an election, the Oil Industry would like to have a "business friendly" administration so that they can do business as usual after the banking debacle.

Mr F

PS If you want someone to blame for the shoite that we're in don't blame New Liabore (as much as I'd want to; being more Classic Liabore myself), blame the banks.
 
#16
parapauk said:
and demand is only going to go down as everyone who wants one already has a car, and cars are only going to get more economical and run increasingly on non-oil products.
You may wish to learn what you are talking about. Oil companies make almost nothing on road fuels no matter where they are selling them. They're practically by-products, especially diesel.
It is all the other petro-chems that make the profits, not petrol/diesel.
 
#17
parapauk said:
The oil companies profit margins in the UK are large. The only reason they are moving is that they know that if they sell their UK assets and invest in emerging markets, they'll make even more money because the workers are cheaper and demand is only going to go up. In the UK, you pay developed world wages, and demand is only going to go down as everyone who wants one already has a car, and cars are only going to get more economical and run increasingly on non-oil products. If someone is being paid a wage of £100m a year and leaves for another job paying £150m, they couldn't plausably claim that they left their first job because their employer was screwing them. That's the level of BS the oil companies want you to buy.
Oh Lordy... Where to begin?

Parapauk: you are a fúckwit of the first water. Really you are. Take a bow for your efforts. Are you Neil Kinnock?

Firstly, it is obvious that you don't have the wit to understand that a UK registered company can register a huge profit in the UK...

,,,despite the fact that it makes all its profits in other countries! It is called being a UK domiciled multinational. Read a newspaper other than the Mirror or the Grauniad and one day you might understand.

Who, in any oil company you care to mention, is being paid 150,000,000GBP a year? Answer: no-one. If however I was working for 100k a year and there was another job offer in the same field for a different company for 150k, all other things being equal, why should I not take the job? Perhaps, should you ever be in such a situation, you could explain to your wife and children why you refused to take the job (as the companies must do to their shareholders).

Parapauk: I grew up in the oil industry (I was born in the medical wing of an oil refinery for starters) and my father was a VP of Caltex. I am still up to date with the industry. Vehicle fuels are not high margin. In fact, almost all of their endevours are high volume, low margin business. To keep you happy they could of course change this into high margin...

...but then do you really want to pay 4 quid for a plastic bag, 8 quid deposit on a plastic water bottle? Perhaps you also want your aspirin tablets to cost 40 quid each. The Petrochemical industry is the foundation of nearly all our industries where complex organic chemical compounds are required.

Or won't people go shopping or have headaches in your communist utopia?
 
#18
Dread said:
parapauk said:
The oil companies profit margins in the UK are large. The only reason they are moving is that they know that if they sell their UK assets and invest in emerging markets, they'll make even more money because the workers are cheaper and demand is only going to go up. In the UK, you pay developed world wages, and demand is only going to go down as everyone who wants one already has a car, and cars are only going to get more economical and run increasingly on non-oil products. If someone is being paid a wage of £100m a year and leaves for another job paying £150m, they couldn't plausably claim that they left their first job because their employer was screwing them. That's the level of BS the oil companies want you to buy.
Oh Lordy... Where to begin?
How about in understanding that my £150m example was just a use of numbers, not an example?

IQ is just a couple of letters to you, isn't it?
 
#19
It's not just the direct taxation on petrol that's causing this, it's all the other operational costs that are landed on companies that want to do business in the UK. Everything from employers' national insurance to paid paternity leave adds to the cost.

I know a bloke who works for a company that's had a manufacturing presence in the UK since before WW2. He was in England recently shutting down their last two factories and relocating the production lines to the Far East. He said it's now 100 times more expensive to run a factory in the UK than to run the same factory in China.

For polluting industries like oil refineries, the real killer is the cost of the 'carbon permits' they need to buy to carry on their business. Gordon wanted £100 million a year off the Corus steel plants on Teesside. Plus corporation tax. Plus employers' national insurance. Plus massive taxation of the fuel they use in the furnace.

The Indian government wanted bugger all. No corporation tax. No national insurance. Barf as much pollution as they like free of charge.

Result: An industry that's been around for a century joined the 'taxodus' and bailed out of the UK.
 

Mr_Fingerz

LE
Book Reviewer
#20
Ancient_Mariner said:
It's not just the direct taxation on petrol that's causing this, it's all the other operational costs that are landed on companies that want to do business in the UK. Everything from employers' national insurance to paid paternity leave adds to the cost.

I know a bloke who works for a company that's had a manufacturing presence in the UK since before WW2. He was in England recently shutting down their last two factories and relocating the production lines to the Far East. He said it's now 100 times more expensive to run a factory in the UK than to run the same factory in China.

For polluting industries like oil refineries, the real killer is the cost of the 'carbon permits' they need to buy to carry on their business. Gordon wanted £100 million a year off the Corus steel plants on Teesside. Plus corporation tax. Plus employers' national insurance. Plus massive taxation of the fuel they use in the furnace.

The Indian government wanted bugger all. No corporation tax. No national insurance. Barf as much pollution as they like free of charge.

Result: An industry that's been around for a century joined the 'taxodus' and bailed out of the UK.
What taxation of the fuel used in the furnaces?
 

Similar threads

Latest Threads