Is Gordon finally driving oil companies out of the UK?

Discussion in 'Current Affairs, News and Analysis' started by jagman, Mar 28, 2010.

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  1. 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.
  2. 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?
  3. My point is exactly what I said in my post.
  4. Imagine that, a corporation out to make money, I'm outraged.
  5. You're easy to upset then.
  6. 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.
  7. mercurydancer

    mercurydancer LE Book Reviewer

    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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.

  14. Mr_Fingerz

    Mr_Fingerz LE Book Reviewer

    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.