The profit gluttony, or fuel crisis
“Motoring companies are deluding the public by suggesting that high petrol prices were due to anything other than the overwhelming impact of soaring oil prices, Prime Minister John Howard says.” Was the opening paragraph in an article on The Age website on 22/09/05 titled ‘PM denies tax reap on fuel’. Prime Minister Howard is a very smart man and a lawyer by trade. Whilst no-one could successfully argue the statement is a lie it is only a very small part of the truth. There is a common misconception in Australia that government fuel tax is a percentage of the wholesale or retail price hence the government is profiting on the current high prices at the pump. The tax is fixed per litre so the government would actually be suffering currently as people are using less fuel because they can’t afford it.
Author’s Note: I feel that kind of dirty that can’t be cleaned. Those last few sentences could sound like I am siding with, or even making excuses for the government, Oh the shame!
I strongly believe the dissident has a very important role to play in democracies and I am passionate about throwing my little grains of sand onto the beach of dissidence. While I live in a two party system I will never support a sitting government and only dislike the opposition slightly less until they come in government, then it’s their turn; it’s a great sport :-)
The soaring prices at the pump are predominately due to unconscionable profiteering of Oil companies. US oil giant ExxonMobil (think first half Valdez, second half large Australian presence) has just posted the largest first half profits for any company ever (US$15.2 billion profit for 6 months!) according to their own website. Since US oil companies where handed huge tax breaks in 2001 the 5 largest US Oil companies have reaped combined profits of over US$220 billion. In 1999 US oil refiners were making 22.8 cents per gallon, by 2004 that had increased 80% to 40.8 cents per gallon according to www.consumeraffairs.com. US oil companies have a huge in presence Australia and reliable data is more readily available, no doubt profits are similar in relative scale / growth for Australian based subsidiaries and others. Australia has not yet given tax breaks to oil companies but was about to. Up until this week the Australian government was planning to increase the petrol tax by 0.6 cents per litre to give back to the oil companies to develop cleaner fuels. But now they have come up with a much better solution. They will dump the increase in fuel tax but still give the money to the oil companies to develop cleaner fuel and every tax payer gets a slice of the bill. It is so ridiculous it sounds like a plot from UK sitcom ‘Yes, Minister’. I wonder how highly environmentally conscious people that don’t have cars feel about their taxes going to oil companies pulling in huge profits in a hope they will destroy the world at a slightly slower rate.
When Deputy John comes out with things like the this, ‘Children Overboard’ and ‘WMD in Iraq’, I never quite know if he is just plain lying, trying to exercise his legal training by saying something that could not be called a lie but does not go close to revealing the truth, or if he's simply so out of touch with reality that he really believes the nonsense he expels. I find it offensive that he would think the Australians would believe the ridiculous propositions he put to us in these cases. Even worse would be if he was actually silly enough to believe his own ‘private realities’. Wasn’t there are catch phrase going around a while ago something like ‘...is either a liar or really gullible’.
The beginning of increasing oil prices in Australia coincides exactly with the invasion of Iraq. The oil companies seized on the publicly perceived, and no doubt to some extent real, decrease in supply to play the public for fools and this has been going on ever since. The steady rise in prices is certainly the product of disaster. There have been now the years of man made disaster that started with the WMD / Iraq + Osama lies, disastrous lack of planning and imperialist ignorance in relation to the Iraq invasion that has needlessly taken the lives of so many. More recently the natural disasters of Katrina, and now potentially Rita, will soon make an impact on prices at the pump. The devastation caused to oil rigs in the gulf and oil refining capacity on land, not to mention the countless desperate people that could not be saved because their national guard was busy in the futile quagmire that is Iraq, only exacerbated the real cause of the oil crisis which is oil companies mauling consumers in times of perceived short supply; and that was before the hurricanes! What are they going to do to us now?
Whilst there is no doubt that there is an imbalance in supply and demand due to increased demand, mainly in China, and the man made and natural disasters has decreased supply. But not for a second can China be branded the ‘bogey man’ in this current oil crisis. Statistics from the US governments CIA and DoE (Department of Energy) websites show that China has 1,306 Million people and consumes 14.2 million barrels of oil per day; a rate of 0.0108 barrels per person per day. The US has 296 Million people and consumes 20.7 million barrels of oil per day; a rate of 0.0699 barrels per person per day. Finding current Australian consumption data is proving difficult but no doubt Australia would not be far beind the US on a per capita basis. China has a population 422% larger but only uses 66.8% of the oil that the US does.
Venezuelan president Hugo Chavez pointed out in an interview in New York recently that the US having 5% of the world’s population while consuming 25% of the worlds oil production is quite obviously unsustainable. In that same interview President Chavez offered to donate fuel to the America’s poor as he does in to the poor in Venezuela and other countries that region. Due to the dangerous and typically ridiculous rhetoric being thrown around by Dick Cheney, not to mention Rev. Pat Roberts, about Venezuela and it’s President at the moment I doubt that offer will be accepted. That’s OK though, after all it’s only the poor that suffer, those that make the decisions can afford all the fuel they could ever need several times over.
I believe the solution is two fold:
1) Obviously all the world, including the author that has a 2 seat sports car that uses over 20 litres of fuel per 100 kms and goes through tyres like an active growing child does runners, needs to address our Phoenix like fascination with oil.
2) In Australia we need to regulate oil companies, if only to provide visibility for consumers to decelerate the swelling ill feeling against the oil companies.
There is a perception that pump prices going up the very moment crude up goes up but comes down very slowly if at all, there is the inexplicable different prices on different days of the week and the constant coincidence that is the price similarities. I just find it stunning that every oil company has exactly the same production costs; and no one has been able to find a competitive advantage in all the years I’ve been on this planet?
Sounds like a consulting opportunity for someone.
-----------------------
NB - You don't make friends with salad :-)
Author’s Note: I feel that kind of dirty that can’t be cleaned. Those last few sentences could sound like I am siding with, or even making excuses for the government, Oh the shame!
I strongly believe the dissident has a very important role to play in democracies and I am passionate about throwing my little grains of sand onto the beach of dissidence. While I live in a two party system I will never support a sitting government and only dislike the opposition slightly less until they come in government, then it’s their turn; it’s a great sport :-)
The soaring prices at the pump are predominately due to unconscionable profiteering of Oil companies. US oil giant ExxonMobil (think first half Valdez, second half large Australian presence) has just posted the largest first half profits for any company ever (US$15.2 billion profit for 6 months!) according to their own website. Since US oil companies where handed huge tax breaks in 2001 the 5 largest US Oil companies have reaped combined profits of over US$220 billion. In 1999 US oil refiners were making 22.8 cents per gallon, by 2004 that had increased 80% to 40.8 cents per gallon according to www.consumeraffairs.com. US oil companies have a huge in presence Australia and reliable data is more readily available, no doubt profits are similar in relative scale / growth for Australian based subsidiaries and others. Australia has not yet given tax breaks to oil companies but was about to. Up until this week the Australian government was planning to increase the petrol tax by 0.6 cents per litre to give back to the oil companies to develop cleaner fuels. But now they have come up with a much better solution. They will dump the increase in fuel tax but still give the money to the oil companies to develop cleaner fuel and every tax payer gets a slice of the bill. It is so ridiculous it sounds like a plot from UK sitcom ‘Yes, Minister’. I wonder how highly environmentally conscious people that don’t have cars feel about their taxes going to oil companies pulling in huge profits in a hope they will destroy the world at a slightly slower rate.
When Deputy John comes out with things like the this, ‘Children Overboard’ and ‘WMD in Iraq’, I never quite know if he is just plain lying, trying to exercise his legal training by saying something that could not be called a lie but does not go close to revealing the truth, or if he's simply so out of touch with reality that he really believes the nonsense he expels. I find it offensive that he would think the Australians would believe the ridiculous propositions he put to us in these cases. Even worse would be if he was actually silly enough to believe his own ‘private realities’. Wasn’t there are catch phrase going around a while ago something like ‘...is either a liar or really gullible’.
The beginning of increasing oil prices in Australia coincides exactly with the invasion of Iraq. The oil companies seized on the publicly perceived, and no doubt to some extent real, decrease in supply to play the public for fools and this has been going on ever since. The steady rise in prices is certainly the product of disaster. There have been now the years of man made disaster that started with the WMD / Iraq + Osama lies, disastrous lack of planning and imperialist ignorance in relation to the Iraq invasion that has needlessly taken the lives of so many. More recently the natural disasters of Katrina, and now potentially Rita, will soon make an impact on prices at the pump. The devastation caused to oil rigs in the gulf and oil refining capacity on land, not to mention the countless desperate people that could not be saved because their national guard was busy in the futile quagmire that is Iraq, only exacerbated the real cause of the oil crisis which is oil companies mauling consumers in times of perceived short supply; and that was before the hurricanes! What are they going to do to us now?
Whilst there is no doubt that there is an imbalance in supply and demand due to increased demand, mainly in China, and the man made and natural disasters has decreased supply. But not for a second can China be branded the ‘bogey man’ in this current oil crisis. Statistics from the US governments CIA and DoE (Department of Energy) websites show that China has 1,306 Million people and consumes 14.2 million barrels of oil per day; a rate of 0.0108 barrels per person per day. The US has 296 Million people and consumes 20.7 million barrels of oil per day; a rate of 0.0699 barrels per person per day. Finding current Australian consumption data is proving difficult but no doubt Australia would not be far beind the US on a per capita basis. China has a population 422% larger but only uses 66.8% of the oil that the US does.
Venezuelan president Hugo Chavez pointed out in an interview in New York recently that the US having 5% of the world’s population while consuming 25% of the worlds oil production is quite obviously unsustainable. In that same interview President Chavez offered to donate fuel to the America’s poor as he does in to the poor in Venezuela and other countries that region. Due to the dangerous and typically ridiculous rhetoric being thrown around by Dick Cheney, not to mention Rev. Pat Roberts, about Venezuela and it’s President at the moment I doubt that offer will be accepted. That’s OK though, after all it’s only the poor that suffer, those that make the decisions can afford all the fuel they could ever need several times over.
I believe the solution is two fold:
1) Obviously all the world, including the author that has a 2 seat sports car that uses over 20 litres of fuel per 100 kms and goes through tyres like an active growing child does runners, needs to address our Phoenix like fascination with oil.
2) In Australia we need to regulate oil companies, if only to provide visibility for consumers to decelerate the swelling ill feeling against the oil companies.
There is a perception that pump prices going up the very moment crude up goes up but comes down very slowly if at all, there is the inexplicable different prices on different days of the week and the constant coincidence that is the price similarities. I just find it stunning that every oil company has exactly the same production costs; and no one has been able to find a competitive advantage in all the years I’ve been on this planet?
Sounds like a consulting opportunity for someone.
-----------------------
NB - You don't make friends with salad :-)
posted by Dissident Dave | 8:17 pm
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