Saturday, June 28, 2008

Completely off topic

Hands up all those who survived the petrol tanker strike a couple of weeks ago? All of you. Excellent. I know it got a little hairy in Scotland where the main/only refinery is run by Shell. [the only drivers on strike] but otherwise I think we survived the earth shattering crisis quite well.
Crisis? Well only according to the media. I saw one newspaper front page with a picture of empty supermarket shelves. IN SPAIN. But you had to read the copy to find that out and that the story was 'will this happen here'?
What????? The usual feeble exortations not to panic buy were included but were obviated by quotes from hard sought out dickheads who were doing just that. When the media tries to create a story out of nothing you know things are going wrong with their editorial policy.
Fortunately most of us saw through that. Only 10% of forecourts were likely to be affected in the slightest yet the story was punted in YK2 proportions.
The real story should be why the hell we are paying £1.20 a litre. Yeah I know 80% of that is tax and the poor petrol companies make about 2p profit. Bollocks!!!!!!!!!
The money in petrol is in the production and refining, not the retailing. And those companies are so vertically integrated that massaging of pre-retail pricing is a doddle.

The main reason petrol prices are so high is of course the price of crude oil. Except it's not. The main reason is the lack of refinery capacity. Forget all the talk of OPEC conspiring to raise prices. It's the oil companies cartel who are conspiring to choke supply. Sure they could build more refineries, but a cost benefit analysis probably shows that the massive profits being made - Shell posted a record $28 Billion profit in 2007 and made $8 Billion in the first quarter this year- outweigh the cost of building new refineries for what is a quickly disappearing raw material. So they are making money while the sun shines. Simple as. And they know that 9 out of 10 of us will blame the Government or greedy Opec for the debacle and not them. So their PR remains intact.
I'm no eco-warrior, and no communist. But this is the unnacceptable face of capitalism. Joe Public being squeezed til they squeak to provide fat salaries and bonuses for execs and dividends for shareholders.
Well I'm going to do a little digging and write a script. Not much in the way of direct action I agree, but it'll make me feel better.


Jon Peacey said...

Got a bit hairy in parts of the West Country too.

The Daily Express seemed to be trying desperately to make people panic buy... I guess that's what happens when Porn Barons buy Papers... you get pimped news! It used to be a newspaper.

It would help if the fuel duty was lowered, it would help if the VAT were removed from the price and that said VAT was not charged on the duty. Taxed tax!

While it doesn't help that India and China have suddenly massively increased their oil demands there is another reason why the prices have gone so high (which nobody outside the business pages and political villages seems to know). Speculators. There are various people on the markets who are just buying up Crude and sitting on it (metaphorically). This causes further shortages in an already squeezed market... they then sell at a higher price. People are making money from (effectively) nothing and it's pretty close to usury in my book. Both US and EU leaders are trying to find a way of cracking down on it- possibly by taxing third party unused oil purchases- but it's difficult because this is capitalism red in tooth and claw. The other week, when the Saudis agreed to pump more oil the excess was snapped up by speculators and instead of the price going down- it went up! Now that is the unacceptable face of capitalism!

David Grenier said...

I think a lot of the problems come from a fundamental supply/demand imbalance, but speculation is certainly adding quite a premium. Fucking capitalists.

Personally I don't think taxes on fossil fuels should be lowered, but I do think said taxes need to be invested into alternative energy and public transit. I get the impression you folks in Europe are at least ahead of us in that you have more dense cities and villages and such, not sprawling suburbia where a car is a necessity for survival.

You also seem to have better rail networks and the like. Not that rail doesn't use fuel, but its still a more efficient way to move people around.

Anonymous said...

As someone who used to work in the City I'd second blaming it on the speculators and wouldn't underestimate the extent to which the market has been artificially inflated.

You can see it quite easily in the daily price movements. Some of the biggest jumps in prices have followed bad US economic data. That has hit the stock market, but, rather than the expected downward pressure on oil prices too, they have been jumping as the supply-demand effect has been outweighed by a portfolio effect - big investors dumping stocks and shifting into oil (which at the moment looks a one-way bet). Rational behaviour but with very negative and far-reaching consequences.

Not that I've been paying much attention because I am of course concentrating on my script..!

Danny-K said...

In the Guardian newspaper they have a regular feature of collected postings culled from various blogs that catch their editorial eye. Happened to read it during the tanker strike and laughed my socks off when they quoted one blogger who said:

"Wednesday - Can't help Feeling I've forgotten to do something today. Oh yes, now I remember, I've forgotten to panic buy petrol."

(Well I thought it was funny).

Lucy said...

One of the very first things they teach you when you train as a journo (and I did, 10 years ago) is to NEVER believe a word of the press... As a result I didn't even know about this supposed crisis until about 2 days ago, lol - why does anyone buy papers anyway?? They're out of date the moment they're printed and environmentally unfriendly. But then I also remember thinking the internet would never catch on too cos it was all just porn and teenagers talking about their fave bands... Is this what it's like to be OLD ED? ; )

English Dave said...

Jon and David - yep, agree about the Express. And the speculators. I've always regarded the stock and financial markets as just being giant casinos where 90% of the gamblers are card counters ripping off the house. The house being us.

But specifically on petrol take the Saudi example. They have something like 25% of all known oil reserves, but their crude isn't suitable for refining into petroleum products. Them increasing production doesn't affect the petrol market.

terraling- you're right, but I don't think the vested interests will never allow specific taxation on speculation. It's odd how we've all been brought up to believe the 'CITY' is the be all and end all. The news carries the footsie 100 etc. As if most of us give a shit. Yes pensions are at stake and all that and that is fair enough, but there is a difference between long term investment in a well run company and rampant gambling for a quick buck. Seems to me the tail is wagging the dog here.

Danny - lol, yep I forgot too.

Lucy - Porn is ageless