Re: This Just Doesn't Seem Right
- From: "Amused" <Amused@xxxxxxxxxxxxxxxxxx>
- Date: Sun, 30 Oct 2005 21:22:23 -0600
"Nicholas Adam" <info@xxxxxxxxxxxxxx> wrote in message
news:a5pam1h801oqp1lphqg5odo2v5691vgurj@xxxxxxxxxx
> On Sun, 30 Oct 2005 18:47:21 -0500, Rick B. <rocks@xxxxxxxxxx> wrote:
>
>>On Mon, 31 Oct 2005 00:07:57 +0100, Nicholas Adam
>><info@xxxxxxxxxxxxxx> wrote:
>>>
>>>Particulary when the costs of Petrol *are* rising because of the US of
>>>A.
>>
>>What did we do now?
>
> Your demand's to high while you don't have enough refineries to
> produce yourself enough Petrol.
>
> See, although there is enough Raw-Oil on the market and the EU has
> contracts with the Russians as well as with Norway to deliver as much
> as we need, the prices at the pumps in Germany (for excample) shifting
> high due to the high Petrol demand of the US *and* due to all those
> Hurricans on your southern coast....
> Well, at least that's what we're told are the reason for that high
> petrol prices over here. Of curse, the Taxman is smiling all the way
> to the Bundes-Bank as there are 52% Tax on anything that Petrol
> involves.
>
> Nicholas
Oil is an international commodity. While a oil company would certainly
honor a contract for delivery of oil, they'd be foolish not to write
contingency clauses into the contracts allowing them to raise prices in
response to changing international situation. I'd guess that there are
tripwire prices. If oil on spot markets reaches a specific price, then
contract prices are automatically raised.
Differences arise when a country produces it's own oil. Even the US,
although we're the largest oil importers, we're also an oil producing
country. Gives US buyers some leverage. (Even some of the largest oil
exporting countries pay pretty much the going rate, because they don't have
the refining capacity and get caught by the same market forces as everyone
else.
During Katrina, American production didn't suffer as much as American
refining capacity. (There are still some oil rigs in the Caribbean that are
offline.)
Basically, everyone worldwide pays close to the same price for a barrel of
oil, and basically, refining costs are the same, worldwide. Transportation
costs for refined petroleum products can vary some. In the end, the usual
variance in prices charges is taxes.
I always thought the Brits paid the highest taxes, but it seems, that
Norway, Netherlands and Belgium are higher.
http://www.aip.com.au/pricing/oecd.htm The chart is pretty startling. God
knows what a gallon of gasoline costs in the Netherlands.
For Americans, it provides an explanation of why some foreign folks, get all
kinds of upset over American driving habits. (For God's sake. Please tell
your buddies that SUV's range in size from gigantic to tiny little
4-cylinder jobbies. Okay?? Most people don't buy the giants, not because
of the mileage, because they're hell to park at the stores.)
If Americans are paying more for gasoline, everyone else (worldwide) will be
paying more, too. Basically, since America is the largest market, what
Americans are willing (or unwilling) to pay, sets the base price, worldwide.
(Their ARE exceptions, especially in some oil rich countries.)
BTW. There are some fairly significant variations inside the US. Due to
various local regulations, there are 92 different gasoline blends sold in
California. It's certainly not universal, but at any given time, the most
expensive gasoline in America, will probably be sold somewhere in
California. (Local spot shortages anywhere, can certainly drive up prices,
too)
Since America doesn't traditionally tax the hell out of gasoline, (at least
not in comparison to other countries), there's a great deal more
"elasticity" in the American market. (Not to mention is the largest market
on the planet.) So, while Americans might mumble and grumble, they'll pay
the increased oil costs; foreign drivers will get hit with the same
increase, plus their already murderous taxes.
Americans might be grumbling, but some other folks are going to be walking.
Extensive "public transportation" systems are no protection, either. Most
countries have reached a (dynamic) balance between public transportation and
private transportation. While Great Britain might have (does have) a much
better rail system than America, if fuel costs increase, it'll increase for
the rail systems, too.
(Just as an interesting sidelight, there was a study released in Great
Britain that purported to show that trucking fuel efficiency now exceeded
rail efficiency!!!!!! It seems that the rail cars, have gradually become
significantly heavier, due to many and sundry safety regulations, including
fire and crash protection. I have no idea if this is true, but it's one
helluva of a story.)
.
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