Agreed. A lot of it is a combination of economic stupidity and competition law ignorance anyway.
For the most part, the excess profits come from the drilling/extraction/importing arms of the companies. They're obliged to sell their stuff at the international price on the commodities market, even if they're selling it to themselves.
That way other companies (like Tesco) can buy oil and then sell it to us. In normal circumstances, it keeps costs down (UK pre-tax petrol costs are amongst the lowest in Europe IIRC).
If the extraction companies are making excess profits, it's because the speculation on the energy markets is massive and/or demand has rocketed (both of which are true currently). To allow them to sell it internally (so BP fuel stations buy from BP extraction) at cheaper rates would pretty much force other fuel stations and/or home energy distributers out of business and thus hurt us medium term.
The solution is cut consumption and stop invading oil producing countries for spurious reasons. Oh, and maybe switch to trading oil in Euros like what we should've been doing 5 years ago and Iran is planning on. Propping up the dollar and the US economy in the way we are is a bit silly, really.
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branchandroot
no subject
Date: 2008-09-07 07:45 pm (UTC)For the most part, the excess profits come from the drilling/extraction/importing arms of the companies. They're obliged to sell their stuff at the international price on the commodities market, even if they're selling it to themselves.
That way other companies (like Tesco) can buy oil and then sell it to us. In normal circumstances, it keeps costs down (UK pre-tax petrol costs are amongst the lowest in Europe IIRC).
If the extraction companies are making excess profits, it's because the speculation on the energy markets is massive and/or demand has rocketed (both of which are true currently). To allow them to sell it internally (so BP fuel stations buy from BP extraction) at cheaper rates would pretty much force other fuel stations and/or home energy distributers out of business and thus hurt us medium term.
The solution is cut consumption and stop invading oil producing countries for spurious reasons. Oh, and maybe switch to trading oil in Euros like what we should've been doing 5 years ago and Iran is planning on. Propping up the dollar and the US economy in the way we are is a bit silly, really.