posted on Dec, 11 2007 @ 08:30 PM
It is true that petrol companies are not completely to blame for high prices, but they are partly to blame. ExxonMobil is the biggest company in the
world in terms of turnover and its profits after tax are over 10% of its revenue, so I think it is fair to assume that at least 20% (which is actually
probably far lower than it actually is, considering various taxes, tariffs etc, especially in the uk, where tax on petrol is insanely high) of each
litre of petrol you stick into your car is profit. Where I live, petrol is now £1.00 a litre or more, and petrol companies price more or less the
same as each other, so if ExxonMobil are making at least 20% on each litre, then we can assume the others aren't going to be too far off. Petrol is
clearly an inelastic good, so just like the middle eastern oil producers are taking the proverbial, so are the petrol companies, its all about money.
Big profits mean big bonuses for the men at the top, much like high prices per barrel mean bigger palaces for the king.
The problem is, things like petrol the governments know are inelastic, and they can justify massive taxation of them via global warming etc and the
oil producers and petrol companies want to make profit , so the price of petrol will continue to rise. Tax revenues need to increase every year and
petrol will always be one of the main victims because it is a pollutant and also because of inflation. Producers and retailers will continue to
increase prices anyway, so they don't end up worse of in terms of real money. Why would they keep their prices the same when everything else is
costing them more?
[edit on 11-12-2007 by mrmanuva]