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- - Cost of fuel (http://forums.sv650.org/showthread.php?t=106581)

Re: Cost of fuel

Quote:

Originally Posted by tomjones2 (Post 1449953)

Apparently there was a new record today, its cracked over $110 a barrel i think - joy. I remember people saying the prices when they would actually stop driving cars/vans. In today's money I reckon over ?1.80 a litre I would have to stop, especially as they are all leisure trips as well. I don't think the bike would go until it hit ?3/litre though.

On the upside the government has got the luxury of cutting tax to control prices. Personally I think a serious cut of the oil companies profits should be returned, everyone is blaming the government but the oil companies are really to blame. They make silly, silly money.

They don't make 'silly money' - anyone who says that doesn't have a clue what they're talking about.

If you invest ?100 in the bank, or stocks/shares, you expect a certain return on your investment, say 10% if you're doing very well. So you might get ?110 back after a year.

If you invested ?100,000, you might expect ?110,000 after a year.

?10bn profit may sound like an obscene sum of money, but it isn't, because ?100bn or more would have been invested to get that.

Re: Cost of fuel

Quote:

Originally Posted by Flamin_Squirrel (Post 1450005)

They don't make 'silly money' - anyone who says that doesn't have a clue what they're talking about.

If you invest ?100 in the bank, or stocks/shares, you expect a certain return on your investment, say 10% if you're doing very well. So you might get ?110 back after a year.

If you invested ?100,000, you might expect ?110,000 after a year.

?10bn profit may sound like an obscene sum of money, but it isn't, because ?100bn or more would have been invested to get that.

That is 10% ;)

Re: Cost of fuel

Quote:

Originally Posted by tigersaw (Post 1449995)

Not from forecourt sales though, thats why every filling station is a retail outlet, same as every airport - their revenue does not come from their core business. The oil companies do make huge profits from the sale of oil products, but not from sales to motorists.

I might be wrong here but I though that the oil companies ran the petrol stations to sell petrol from there refineries, where they make very good money. I though petrol station main source of income was from associated goods sold in the shops. Hence the reason that private petrol stations are almost none existent and supermarkets run them to get people to the shops. How many none chain/supermarket station do you still have around you?

Sorry but squirrel are we talking about shareholder value or profits here. As a share holder you would of course expect to see a return on your investment, 10% as you put it. However and oil company cannot possibly invest 100bn each year to make 10bn profits, where would all the money come from next year.

My original point was that the oil companies still make huge money of our backs, regardless of there size/market forces there is potential for them to cut the cost of fuel, obviously there not going to and again we cannot force them to because they are so big. I'm not a communist I was just making the point that its not exactly poor old oil companies struggling to get by, whilst the govement rolls in cash.

From a quick glance at the balance sheet shell made 355bn with a cost of sales of 296bn last year.

Re: Cost of fuel

Quote:

Originally Posted by tomjones2 (Post 1450694)

You are contradicting your own point here though. Shell for instance, make about 2p profit from the sale of each litre. In fact all but about 20p is tax and VAT anyway. So if they were to run their sales at zero margin, they could do no more than cut the price by 2p - hardly much difference.

Re: Cost of fuel

Quote:

Originally Posted by tigersaw (Post 1450756)

Are we talking forecourt profits here?

Re: Cost of fuel

Quote:

Originally Posted by tomjones2 (Post 1450788)

Are we talking forecourt profits here?

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Yes - or are you suggeseting they sell fuel at a loss to mitigate against the profits they make elsewhere?