View Full Version : And now, a little fairy story from the OFT.

Krystal n chips
30th Jan 2013, 17:11
Once upon a time....well, maybe not.

So, how about, "the OFT were very clever people, but, sadly had no idea as to geography as they published a report on petrol prices located in somewhere called the UK.

Unfortunately, their idea of this "UK" was very different to those those who actually lived in the real UK and thus had a very good idea as to how petrol price variations actually worked ".

Still, as fairy tales go, this one has a happy ending as all is well it seems and we all like happy endings........albeit complete and utter garbage!:ugh:

BBC News - OFT says UK petrol market is working well (http://www.bbc.co.uk/news/business-21258809)

30th Jan 2013, 17:50
What really annoys me about it is that they state that tax and VAT increases are responsible for a lot of the increase and yet the blasted idiots in government don't even apologise, let alone realise that their economic policies are such crap that they are wrecking the country! And that applies to all three major parties - and quite likely, minor ones as well..

One a very micro scale, government tax policies are going to lose about £20,000 pounds worth of business for BA next year paid for from outside the EU, (including a lot of the pernicious APD) and £16,000 of income tax on £40,000 income from abroad - and that is just radeng. I can only spend so much money, so why work to give 40% to the government when I can live nicely on my pensions?

I am told that in what may be called 'professional classes', a lot of people are taking this option.

31st Jan 2013, 02:16
I can only spend so much money, so why work to give 40% to the government when I can live nicely on my pensions?

Go for it... but start something with revs on the side.... for when the folks in charge start inflating and the values of pensions go toward air.

Lon More
31st Jan 2013, 04:21
As a lot of it comes from the North Sea, refined I believe at Grangemouth, why is the price higher in Scotland than in England?

Alloa Akbar
31st Jan 2013, 07:26
Lon - Probably because (To paraphrase Michael MacIntyre) "It's bloody Scottish petrol, none o' yer b4st4rd English petrol.."

Michael Mcintyre's Comedy Roadshow- Scottish people, The Scotch Egg! - YouTube

31st Jan 2013, 07:56
As a lot of it comes from the North Sea, refined I believe at Grangemouth, why is the price higher in Scotland than in England?

Almost certainly tax. Now there's a surprise.

31st Jan 2013, 11:57
Lon Mor your belief is wrong, most of it is not refined at Grangemouth. Some does indeed go to Grangemouth via Forties p/line but most of the Forties stuff gets moved straight out, as crude oil, from Hound Point. Sullom Voe (Shetland) and Flotta (Orkney) terminals also receive N. Sea crude whilst, in additiuon some is loaded direct into tankers offshore. I hope that helps:ok:

KnC – what part of “..excluding taxes, the UK has the cheapest petrol in Europe. ” didn’t you understand?

I’ve worked in this area for more than 40 years. I know the economics of Exploring, Developing, Producing, Transporting, Refining (mainly at a loss) and Distribution.

In addition to pump tax and VAT the UK N.Sea production is also subject to 62% marginal Ring Fence tax.

Furthermore, the supermarkets are NOT subject to holding the (Gummit required) strategic reserve of 60 days supply. The cost of this dead stock is an another additional cost that oil companies have to carry.

You may not like the answer but it didn’t surprise me one bit, because it’s FACT.

Krystal n chips
31st Jan 2013, 16:56

Thank you for that question.

Actually, I was, being a consumer you understand, terribly confused until you took the time to clarify those points for me.

As you work in the industry, clearly you have both knowledge and a vested interest in promoting, what's that word again ??...ah, got it!..propaganda.

Now, being a mere consumer, one of many millions who contribute towards profits (various) to be more precise, which part of these reports do you not understand?....or could it be that, like myself and the several million other consumers, we are all wrong in our perceptions of price variations and yourself, and the OFT of course, are perfectly correct ?

Catch up - Channel 4 News (http://www.channel4.com/news/catch-up/display/playlistref/300113)

Petrol prices: all pumped up | Editorial | Comment is free | The Guardian (http://www.guardian.co.uk/commentisfree/2013/jan/30/fuel-price-oft-review)

31st Jan 2013, 17:52
KnC – I note that your tendency towards sarcasm, it does you no favours.

I am now retired so have no axe to grind. It just so happens that I do know the economics.

This is not a popularity game where numbers equals being right. Millions thought the earth was flat, it wasn’t/isn’t.

I can happily share some of the cost data with you,
Exploration Well £15-30 mm per well depending upon drilled depth
Production well (with horizontal section) £30mm
Platform (Oil Area) £500mm (no accommodation)
Platform (manned) £800mm
Not Normally Manned Gas platform £100mm
Typical Platform Operating/pipeline cost £30mm/year
Pipeline £500k-£1mm per mile.
Typical UKCS oil field 50-80mmbbls (these days).
Marginal Tax rate 62%

Then there is the refining and distribution cost. I can't give you the cost of a refinery - Nobody has built a refinery in the UK for over 20 years – why? - Because they lose money. Yep, no regular refinery in the UK makes a profit :{(some specialised “topping plants” do)

All of the above translates, per OFT, into
Crude cost 44p/litre
Refinery/distribution cost and margin 11p/ltr
Duty & VAT 81p/ltr.

The one cost that you don’t see KnC is the cost in lives – most recently In Amenas and UK Helicopters. But there are many other such as Piper Alpha, Alexander Kielland. And, yes, I've lost a couple of good friends

If you have any constructive, fact based answer to the OFT statement that “excluding tax, the UK has the cheapest petrol in Europe” I’d be happy to discuss it with you :ok:

Otherwise, it may be your perception (and that of millions of others) BUT… “perception” doesn’t mean it’s correct. :=

31st Jan 2013, 19:57
This didn't happen because of high profits.............

BBC News - Coryton oil refinery workers in Essex attend last day (http://www.bbc.co.uk/news/uk-england-essex-19596740)

31st Jan 2013, 20:04

You forgot seismic, post survey processing of cubes, pre seismic geophysical research and licence costs. They add quite a few more millions.

Them seismic vessels cost an awful lot of money.


Onshore seismic is much cheaper,but still not cheap

31st Jan 2013, 20:32
Tks Vulcanised –I think you make the point very well. It's a shame but it's a fact:{

Hval – you must be a “geo whiz-bang” aka “rock-hopper” :(

I didn’t mention CSEM either, with its believers and non-believers. You are of course correct – may millions go in the dark arts of G&G and ResEng – but not as much as in the “Meccano” and “plumbing” of the pots and pans ;)

I do love engineers, in much the same way that one loves little children and puppies with wet noses:E

31st Jan 2013, 20:37
I agree percentage wise costs else where are higher, but I wouldn't like to miss out on my favourite bit. :E A child at heart.

I didn't want to mention that big long list of further functions and costs.

31st Jan 2013, 20:57
Well, Hval, at least the days of picking out 'tops" with coloured pencils have gone or was that the bit you enjoyed;)

The modelling these days is very impressive, particularly the 3D and 4D stuff:ok: