None of us, I suspect, enjoys paying high prices for our petrol, but the announcement by Shell and BP of record profits this morning has been met by official dismay at the BBC. All morning there has been studied rumination over just how greedy these oil companies really are and why it is that with such large profits they cannot lower the price of the petrol that they sell on the forecourt. There has been precious little discussion on the fact that 60% of the forecourt price of petrol goes to Mr Broon and his grasping greedy government. I wonder why it is that the BBC does not question why government has failed to give us a break by taking a smaller cut of what the motorist is asked to pay?
THOSE WICKED CAPITALISTS.
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Sorry, the tax is irrelevant and immaterial to the fact that the oil corporations are making huge profits. You are conflating two quite separate things. What matters is that the oil corporations are making huge profits.
It’s true the oil companies are raking it in hand over fist, but the Beeb won’t ever question the amount the amount we pay per unit on petrol because there is an undercurrent of green fascism happening here: driving cars is bad, basically.
Therefore, tax those evil motorists, make the environment destroying swines pay for the (as the Beeb see it) “luxury” of driving. Talk to any car-hating, bike riding pillock and not only do they think the tax on petrol isn’t too high, but would also raise it by a large amount, if they had their way.
All part, of course, of the Beebs mission to ram the environmental agenda down our throats.
Nearly Oxfordian – tax is absolutely relevant to fuel sales; I believe that rather more than 60% of the pump price is duty, and that the *average* profit made on the sale of a litre of fuel is less than 1p. Pre-tax, British fuel is about the cheapest in Europe, post-tax it’s among the most expensive.
Garages make far more money flogging you papers and Mars Bars than they do selling fuel, which is one of the reasons for the closure of so many smaller filling stations.
“tax is absolutely relevant to fuel sales” –
more conflation, I am afraid. We were discussing profits, not sales. These are two quite distinct and separate things. And then you go on to conflate prices (“Pre-tax, British fuel is about the cheapest in Europe, post-tax it’s among the most expensive”) with profits AND sales (aka turnover).
Profits, aka bottom line, is what this is supposed to be about. The bottom line is the proof of the pudding: and the FACT is that the oil corporations are making huge profits. You want to moan about taxes? Fine. But don’t sneak it into a totally different issue, and then pretend that the huge profits are somehow a result of, or an indicator of, the level of tax.
Looking for oil and gas is an expensive business, so the more profits made by the oil corps the better as far as I am concerned. Good luck to them, and may success attend their future ventures.
I can’t actually see ‘official dismay’ or indeed any criticism at all of the companies’ pricing policies in that article?? I assume that the radio is flogging it though.
I’ve got no problem with simple and efficient green taxes which are equalised with reduction in general taxes. Unfortunately what happens is that:
1) Simple basic rate tax is cut to get a headline.
2) A fiendishly overcomplex and beaurocratic tax is raised to make up the revenue.
3) EDS are awarded a massive contract to deal with the admin.
4) EDS f*** up.
5) A protracted legal dispute trundles on due to the fact that the government employs nobody commercially competent enough to negotiate a tight contract with a private party.
6) The taxpayer pays for the legal dispute, the taxpayer pays for the beaurocracy, the taxpayer suffers for gaps in the operation of the new tax as nobody understands it.
ho hum
Nearly Oxfordian – it’s not conflation; yes, the oil companies are making verty large profits from the production of crude oil. They are also making huge losses (for the most part) on refining the crude into suitable products, and making nearly no profit on retail sales. They are not allowed under competition law to cross-subsidise from the profitable parts of the business into the unprofitable ergo the only way that fuel prices can realistically be reduced is to reduce the rate of tax levied.
Cockney,
Yes, it’s mostly on TV and Radio that the comrades are dismayed!
“They are not allowed under competition law to cross-subsidise from the profitable parts of the business into the unprofitable” –
therefore the unprofitable part pays little tax. The end result is STILL that the group as a whole makes a huge profit. These are different ‘parts’ only in terms of legal company structure (who is the subsidiary of whom on paper, etc). The shareholders still make a huge profit.
I’m relaxed about the oil companies making a profit – some of it goes into my pension plan, which needs all the help it can get after Broon’s depredations.
High spot of the Naughtie interview came when he observed that the oil companies are just sitting back and watching the money flow in. Isn’t that precisely what Beeboids do via the Telly tax?
N.O. – are you suggesting a windfall tax on the companies then to deter them from making such large profits? The shareholders in blue-chip companies are, for the most part, pension funds of one sort or another (BP alone was quoted a while back as paying one-sixth of all corporate dividends received by pension funds in the UK) so all you would be doing is removing money from pensions and transferring it to the government.
Since any rise in fuel nets the Government a VAT bonus, do not expect any changes – or for the same reason alternative fuels.
And any “windfall” tax will always find its way back to the wee man filling up his car.
As for big profits, if you sell an awful lot of a product that everyone needs, you will make a an awful lot of money.
Be it oil, clothes, groceries etc etc etc.
The BBC in it’s headline is implying BP, Shell et al should be taxed more. I don’t think they should because:
1. Making profits is what all companies do – why single out one successful FTSE-100 business and not some other? Profit is a reward for the nature of the business. I see sour grapes and the politics of envy at work at the BBC yet again.
2. They can use these profits to develop alternatives to petrol (whether they are serious in this is a good question)
3. BP, Shell et al already pay HUGE amounts in tax.
I’ve got shares in BP and can’t say I have any issue with the article, it merely states the facts.
All the issues raised are ones that, as a shareholder, I’d like to be aware of (and indeed already was).
Which parts do people have an issue with specifically? Cheers
Declan Curry’s spot on BBC1’s Breakfast this morning put the tax take on fuel at 66%. He also mentioned that the big oil companies are unable to cut forecourt prices even if they wished to as this would be ruled uncompetitive against smaller sellers.
Deckers usually plays a pretty straight bat on business stories I’ve found.
Andy | 29.04.08 – 10:27 am |
Cannot but agree, when all these successful companies have been hobbled and ruined by the idiots in Government and encouraged by the BBC, levying ever higher taxes and “windfall” taxes, where the hell do they suppose any future tax revenue is going to come from.
They don’t like the oil companies making money, or the telecoms, Tesco or the City; in fact they are against anyone that gains their money from enterprise.
The fact that these outfits generate the wealth for TAXING; including their own TV tax salaries seems to escape them completely.
At 60% plus of the price of a litre that is not tax, it is outright usury of the public and the place that pressure should be brought to bear, not on the oil companies.
Oil companies makese these “obscene” profits simply because the cost of a barrel of oil is so high.
The government makes “obscene” profit by taxing the f8ck out of petrol, and then get this, taxing a tax (VAT on top of fuel duty)!!!
Windfall taxes are a socialists wet dream, makes everyone feel nice and warm and fuzzy, until the next year when these socialists suddenly realise all their profitable companies have f8cked off overseas where they can do business cheaper and free of government interference.
Mailman
Companies are already re-locating to Ireland because Corporation tax is at 12.5% as against the UK’s 28%.
Over complicated tax law is another reason companies will move, the Government will watch the tax take disappear elsewhere, and then what?
Encouragement of enterprise…..what happened.. Socialist, that’s what.
The other thing is this, those profits the oil companies are making are being made on their current, known reserves, not on new reserves being discovered!
Mailman
Remember when some well known banks were threatened with a “windfall” tax no so long ago:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2001/03/22/cnwin22.xml
I don’t think Royal Bank of Scotland will be paying anything like that any time soon.
Congrats to the oil companies for making big profits and helping out my pension fund.
I hope they relocate to Dublin and boost their profits even more by paying less tax.
The Institutionally Leftist BBC would seem to be against profits as a principle. Must be the neo-marxist mindset that imbues the place. I expect they genuinely think it is their job to promote the socialist thievery of profit.
I believe the overall profit margin of the oil companies is between 7-10%. Hardy excessive. I’m sure Sir Richard Branson would agree with that.
I was wondering, does the BBC pay tax on their billions in “income” via the poll tax that subsidizes them?
Er, aren’t we forgetting that the oil companies will be paying taxes on those ‘obscene’ profits and the shareholders will be paying tax when those same ‘obscene’ profits are distributed as dividends? Added to the extra VAT accruing from the price rise & other taxes arrising when the fuel users pass on the extra costs through their own price rises, the Treasury is in for a large windfall. Some might call it ‘obscene’.
Oh, by the way, €1,35 ltr LeClerc Villefranche you poor suckers.
So basically the issue is the article isn’t saying how very lucky we all are to have such a successful businesses based in the UK?
The article reads like any other business report.
Interesting contrast.
The selling price of oil is elastic; it changes with demand. The higher the price the less sold. less oil sold equals less CO2 emissions.
Environmentally speaking, there ought to be rejoicing that oil companies are discouraging people from using oil. Whether the profits go to government in the form of taxes or into some millionaires back pocket it still has the same effect.
jus askin frenchy — ah you mean all those “fat cats” who pay into funds for pensions, endowment mortgages and the like; which said companies then invest in enterprises like Exxon Mobil?
Screw them. Capitalist lackeys. Viva la revolution.
TDK11:48
Actually, oil consumption is usually regarded as inelastic in the short term for economic purposes.
Look at it from a personal point of view. You need to use your car for the daily commute to work. High fuel prices may encourage you to buy a smaller car or even change your employment or place of residence but you won’t be doing so tomorrow.
The current (D)HYS is ‘Are the oil companies’ profits justified?’
Can anyone imagine one titled ‘Are the government’s fuel taxes justified’?
“N.O. – are you suggesting a windfall tax on the companies then to deter them from making such large profits?” –
I made no suggestion or even any comments on any such thing. I simply stated that it is factually erroneous to conflate profits, turnover and taxes.
Brazil Oil Finds May End Reliance on Middle East.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aBUoYKhu7PWk
Version 8 of this story added:
“How much are you paying for fuel? BBC News is looking for images of people standing at garage forecourts which show petrol prices.”
Version 10 added:
“For a litre of petrol costing 108 pence, approximately 33 pence goes to the oil company, 9 pence to the retailer, 50 pence fuel duty to the Chancellor of the Exchequer, and 16 pence VAT to the chancellor.”
The “most recommended” (D)HYS about oil profits is going off Beebie message:
http://newsforums.bbc.co.uk/nol/thread.jspa?sortBy=2&forumID=4698&edition=1&ttl=20080429142433&#paginator
moonbat nibbler:
Version 8 of this story added:
“How much are you paying for fuel? BBC News is looking for images of people standing at garage forecourts which show petrol prices.”
What sort of picture could they be looking for I wonder. If I photograph myself by a filling station forecourt smiling broadly will they use the picture? Smiley-faced people or grumpy-faced people – I wonder what they’ll go for?
The 1 O’clock news (first time I’ve caught it in months) was a grotesque piece of government propaganda and attack on the oil companies that provide our pensions.
Many newspapers have headlined with the £5 gallon price over the last few weeks but the BBC just so happened to catch up on this fact today and attached it in their headline to: “as oil giants Shell and BP make record profits”.
It would usually be astonishing that the BBC would mention such dirty words as “gallon”, an imperial measurement frowned up by their EU masters, but when it is used to attack capitalism its fair use?!
At no time during the report was it mentioned that the price at the pump is largely thanks to the government, not oil companies. Taking into account North Sea taxation and corporation tax the amount paid at the pump to government is 75p per litre – the 66p mentioned in the web report (not the populist TV report) is just the direct tax on the consumer.
Shell isn’t even domiciled in the UK for tax purposes. BP and Shell only make a tiny fraction of their money in the UK – a fact not pointed out when interviewing Mancunian drivers. This is a trick often used by the BBC when reporting banking results in the past. The success of UK companies overseas is effectively used by the BBC to bash these companies for their “record profits”.
I’m less than excited about the prifits made by BP and Shell; without those profits how can they fund exploration to find more oil, or research to develope alternatives (real ones, not cosmetic gestures like windmills)?
If I was less comfortable I could always buy my fuel elsewhere or walk everywhere and then I would not have to donate any money to BP or Shell’s profits. Nothing like the BBC; I can watch something else and then I still have to contribute to the BBC’s income.
Astonishingly, even a rag like the Daily Express made a better job of the story today. Its headline indicted both the oil companies and McBean.
It’s come to something when the Express can give impartiality lessons to the BBC!
TDK:
“The selling price of oil is elastic; it changes with demand.”
If only thje Telly tax did the same!
An instructive comparison this evening, between BBC TV local news for the South East and ITV Meridian.
The former makes no mention of today’s fuel protests. The latter leads on the story and not once does it mention the oil companies – instead it interviews hauliers stricken by the 30 per cent rise in fuel prices and lays the blame for the high cost firmly at the feet of the government.
That’s BBC bias for you. Ignoring, whenever possible, a story that shames McBean and, when forced to mention it at all, shunting the blame onto the filthy capitalists.
I have got no problem with companies making profits, but I do have a problem with the way the BANKS are being bailed out by the taxpayer.
From the conservatives on this forum, there is a deathly silence about the massive welfare handouts given to the likes of Lloyds, Barclays, Abbey, etc.
You know, Zevilyn,that may be because it has nothing to do with the BBC.
Ben, I suggest you save you sensible comments for a forum where they won’t be wasted.
The BBC is a communist organisation – their entire business coverage is designed to undermine the capitalist system at every opportunity!!! If you think otherwise then you are just a brainwashed idiot!!! Even if the article is not explicitly stating anything to this effect, we just know that the guy writing the article has a seething mass of anti-capitalist hate running through them!!!
Therefore the MORE the BBC covers business issues and the MORE depth and analysis they bring, the MORE of their communist propaganda they are spreading!!! Wake up and smell the coffee!!!
Oh yes, they hate Jersey too!!!
Personally, I just come here for a giggle every now and then. There are only a handful of regular commenters that I can take seriously (and David Vance is certainly not one of them).
“I have got no problem with companies making profits, but I do have a problem with the way the BANKS are being bailed out by the taxpayer.”
I think this is a BBC related issue. Their coverage of this issue was very much slanted towards the front end – i.e. why weren’t there sufficiently suffocating rules and regulations to prevent banks playing with high risk products. There’s at least an argument which was initially tentatively advanced by the BoE that letting the banks suffer the consequences would be the best way of ensuring responsibility going forward. I never heard a Beeb interviewer follow this up with one of the myriad of politicians desperately calling for a bail out to save their short term skin. Why not???
Look at Enron – after that scandal the US over-reacted by introducing the ludicrously over-prescriptive Sarbannes Oxley rules on financial reporting. The outcome has been that a lot of multinationals have edged away from the US and the financial services industry is mired in red tape. The fact that thousands losing their jobs at Enron and Arthur Anderson might work better as an incentive seems to have passed the regulators by…
Cockney | 30.04.08 – 9:22 am |
The fact that thousands losing their jobs at Enron and Arthur Anderson might work better as an incentive seems to have passed the regulators by…
Good point. It certainly does seem that there is such a stigma against making thousands of people jobless all at once (a collective race memory of the Depression, perhaps?) that nobody is able to think clearly in cases like these.
“Ben, I suggest you save you sensible comments for a forum where they won’t be wasted… MisterMinit | 30.04.08 – 7:42 am”
misterminit, the irony of you ‘wasting’ your time admitting you from time post here (= ‘wasting’ time) and advising someone else not to ‘waste’ their time seems to be lost on you.
I can only advise that perhaps you could stop ‘wasting’ your time, his time and our time by listening to your own suggestion.
I will try not to miss your clearly stunning sensible comments too much.
Bye and watch out for that door, it swings back quick, and you want to protect your derriere don’t you.
I have got no problem with companies making profits, but I do have a problem with the way the BANKS are being bailed out by the taxpayer.
There has been no bail out by the taxpayer.
From the conservatives on this forum, there is a deathly silence about the massive welfare handouts given to the likes of Lloyds, Barclays, Abbey, etc.
There have been no handouts to any bank. Where do you get this stuff from, the BBC?
MisterMinit | 30.04.08 – 7:42 am,
Is everything OK, you feeling alright? The exclamation mark is best used very sparingly. So is sarcasm.
The debate on this site about the BBC’s hero-worship of Castro and Guevara must have passed you by. Yes, the BBC is indeed packed to the rafters with ageing anti-capitalist adolescents who never grew out of their student protest days.
If you want to learn something about attitudes at the BBC, look at this article:
http://www.telegraph.co.uk/news/uknews/1557389/Here-is-the-news-%28as-we-want-to-report-it%29.html
But we were not just anti-Macmillan; we were anti-industry, anti-capitalism, anti-advertising, anti-selling, anti-profit, anti-patriotism, anti-monarchy, anti-Empire, anti-police, anti-armed forces, anti-bomb, anti-authority. Almost anything that made the world a freer, safer and more prosperous place, you name it, we were anti it.
Well, precisely. And the BBC evidently hasn’t grown up since those days.
Nearly Oxfordian,
> I simply stated that it is factually erroneous to conflate profits, turnover and taxes.
Yes, it is. However, when accusing those of making money out of a commodity of “greed”, it is usual — if you’re being unbiased and impartial and non-judgmental, as the BBC claim to be — to level the same accusation at all the parties making lots of money out of that commodity. The simple fact is that the Treasury take more money at the pump than the oil companies. Therefore, if the oil companies are making obscene amounts of money, then the Treasury are making even more obscene amounts of money. Sure, one amount is in the form of profit and another is in the form of tax. That’s a relevant distinction in a business report but not in the large amount of more human-interest-angle type of editorials offered by the BBC in which they complain that the ordinary man in the street is having to spend too much of his money on petrol.
“The simple fact is that the Treasury take more money at the pump than the oil companies. Therefore, if the oil companies are making obscene amounts of money, then the Treasury are making even more obscene amounts of money”
You will not find me disagreeing with that, and I yield to nobody in my contempt for this thuggish, nay gangsterish Treasury in particular and government in general. But that’s not what I was talking about 😉