imlach

Yes, because I've cut down and found alternatives. I used to use a lot more, some of it needlessly. No point lining someone elses pocket with my hard earned is there......

marky1

But I'm not saying the only remedy is to cut duties, if that were the case then no it wouldn't be a case of making it up somewhere else (and incidentally that somewhere else is often through borrowing so no it doesnt have to be made up immediately from another source) It could be through a cut in retailers margin.

Tiggs

marky1...how many mpg does your car do?

marky1

my daily car about 15 i think

Tiggs

so you have a viable alternative to spending so much on fuel.....why dont you explore that?

imlach

The retailer gets about 0.5p/litre IIRC.

imlach

So you could buy a diesel and cut your annual fuel bill by 2/3 I'd imagine if you're using so much of it....

marky1

No Tiggs, and I'm not saying I do, I'm just arguing about the economic theory about boycotting a supplier, I'm not saying if it's a good or bad idea, just that I think it would work in my economic opinion. Look to be honest, and don't take this the wrong way but I couldn't care less if they taxed petrol more, for example rather than raising income tax. I know that whatever price they make petrol I can afford it. On the other hand if they were to instead raise income taxes then the hit for me would be much larger and more painful.

marky1

yeah imlach i could, but again you're assuming that I care about my petrol consumption, I don't. read above! just talking about the theory of boycotts!

imlach

It WOULD NOT WORK

Another point I thought of - the supply & distribution system is probably set up at the moment to supply a more or less fixed demand to the UK's petrol stations. Given you won't believe the current method of distribution through multiple suppliers (ie, BP supplies others), I'll give you another fact to chew on....

I doubt Shell could cope with increasing its output if BP were to be boycotted. The distribution system has a finite capacity in the short term (refinery output, tanker numbers, etc). Also, the newly 'busy' forecourts are going to run out of supplies more quickly.....

...so where do people end up going? Back to BP cos they can't cope without fuel in the short term

It's flawed from SO many angles, even before we begin on the resolve of the UK people

marky1

yeah but if they all supply each other (which I do believe, not sure where I said I didn't) I can't see how it would make much difference to the logitics of delivery etc. Anyway, think we will just have to agree to disagree, guess we will never know if it would work or not, I certainly think it would.

imlach

OK, so if you now agree that they all supply each other, where exactly is it that BP loses out

It's still supplying the stuff, and as I said, they don't make much money from retail sales. Their profits come from extraction, distribution, and supply.

marky1

well they lose that component of their revenue and profits that came from retail sales. And it's not as though BP supplies shell with 100% of it's stock is it, it can't be much, what 10%, 20%? That's a fairly large drop for any company to take, let alone the largest in the UK.

Nexuas

I quite like the arugument, where you say they can rasie petrol prices as much as they like, and you can still afford it, whereas if they increased income tax, you would be turned in to a destitute finacial wreck?

All you are looking at is the difference between direct and indirect taxation. Just because in the fuel tax instance the money enters your bank before going the the goverment would not make you any better off then if the tax is deductated at source? All it gives you is the choice to use less petrol, which apparently you can afford whatever the cost?

Yet another flawed arguement?

Tiggs

studying the economics of a boycott without considering the public is pointless.

if 3000 blackbirds all tried to lift me off the ground with a network of fine, but quiet strong, nylon thread then i could fly.

however, no NASA engineer will give the idea much thought because blackbirds dont tend to do that.

FrenchBoy

So your theory goes like this.....

1. Nobody buys fuel from esso
2. Esso have loads of fuel sitting around and think 'oh no - we must sell it cheaper'
3. Everybody buys fuel from Esso
4. All the other suppliers think 'Lets drop our prices'
5. everyone is happy.

there are so many things wrong with this i dont know where to start.

if everyone stops buying fuel from esso, the other suppliers have to take up the extra demand - which they wont be able to meet in the short term.

this means one of two things will happen:
A. petrol shortages - therefore higher prices.
or
B. the other suppliers buy more of their fuel from Esso - no problem for esso - no lower prices (although some esso retailers - will go out of business - hurray well done).

This is before you even start to think about the fact that due to the Oligopolistic nature of fuel suppliers they will 'collude' and hold firm on their prices as its not in their interests for anyone to break ranks and 'undercut' the others.

Nexuas

The garages are normally franchises, which make money by putting 0.5p a litre on the cost. BP does not care which type of forcourt it sells to, it is selling petrol, it is the BP forecourt franchise holders that you are hitting in the pocket!! NOT BP!!!!

imlach

...but as I said, the distribution system is setup for a more or less fixed demand. Shell can't up it's supply in the short term, so who do you think could step in and fulfill that demand

Nope. It won't work.

Tiggs

"Yet another flawed arguement?"

no, he's right in this.

i work from home, do 15k a year. Fuel can be as expensive as it wants, on 15k a year i dont care...put HR tax to 41% and it will cost me loads.

OllyK

Sorry marky1 but I think imlach is spot on here. Because the main refineries supply each other's forecourts and indeed those of the independants as well, you can consider the fuel to supply to be coming from one big pot. If you boycott supplier X, you are boycotting their forecort operation. You will then got to supplier Y instead, who is actually getting their fuel from exactly the same place. The refinery sees no difference in consumption or profits. The franchisee for supplier X however, gets hit hard and goes out of business (no greate shakes the the refinery) as the demand is constant just spread around fewer outlets.

A boycott will only work when there is a viable alternative, you can't boycott air in protest to air polution, you have no alternative to use, it all comes from the same pot. The same is the case here, unless you can move over to a fuel not supplied by the refinery then your boycott will fail. It is all very well suggesting LPG or diesel or public transport, but they also all come from the same suppliers as the petrol. So for your boycott to work, people need to walk or cycle or maybe go with electric cars (as long as they get charged from power stations that are not oil fired). Now that would be effective, but how many people do you think will give up their cars and walk or cycle for the weeks it would take before the refiners were financially hit? And assuming they did and reduced the price, how long would it be before they crept, or more likely jumped back up again, and no doubt to a higher level as the suppliers would want to recoup the profits they lost during the boycott.

marky1

Nexuas many are not franchises, and the oil company owned ones make about 5p a litre, which is actually quite a lot (about 6%) Given BP is probably happy to pay a 5% dividend to their shareholders I can assure you they will be pretty concerned if they start to get a sniff of losing that kind of a profit.

Also, my point about taxes is nothing to do with the indirect/direct. All I'm saying is that as I know my income is higher than the average, it cost me less if the government raises revenue through petrol duty than income tax. i.e. incase you still dont understand if they raise petrol duty by 5% it may cost me an extra £20? a week. If they raise income tax by 5%, well it would cost me a lot more than £20 a week.

marky1

Wow Tiggs excellent you agree with me on something finnnnaaallllyyyyyy

marky1

Okay Olly but even coming from one big pot, retailers makes about 5p per litre. That's actually quite a lot. I'm sure Shell would be quite happy to increase their supplies. Anyway, if it is all coming from the same pot they wouldn't have to I guess. the same amount of petrol would just get shared around the other suppliers and the one we would boycott would simply miss out on it's profit element on petrol sales. (which even though it seems small is actually huge)

Tiggs

"finnnnaaallllyyyyyy"

try posting something sensible before 5 pages into a thread

marky1

well in your opinion tiggs

akshay67

If it hasn't already been pointed out in this thread, the chav who want's to lower UK petrol prices has forgotten that the population of the UK is less than 300 Million.

speedking

I stand corrected (next post).

A rise in crude price becomes a larger increase in pump price, due to tax.
The increase in tax take is not used to reduce income tax, but is a windfall for the government. This seems unfair to many motorists. As everyone is agreed that tax has to come from somewhere then you would expect a corresponding reduction elsewhere.

imlach

Let's end this misinformation rubbish now....you're talking rubbish.

http://www.hmce.gov.uk/business/othe.../roadfuels.htm
http://www.hmce.gov.uk/business/othe...oric-rates.htm

Fuel duty is not proportional to price - it is a fixed amount per litre.

The VAT element is the only bit proportional to price, but that applies to any product we buy.

imlach

You're stretching it a bit far now.
We're now talking about VAT, which is applied to every non-luxury product you purchase. There is VAT AND Duty on lots of things - tobacco, alcohol, fuel, etc.

The goverment is not to blame for the rise in the cost of the raw product (crude). It has not changed the fuel duty applied - it is fixed.

Why should it reduce fuel duty because the cost of the raw product has increased? It is gathering no more money from fuel duty, only VAT. Given we've seen, what, a 10p/litre increase, we're talking about 1.75p/litre extra that the goverment gets in revenue.

Yes, it all adds up, but a 1.75p decrease in the price of fuel is not going to keep you moaners happy. Is it?

Anyway, where does it end? Alcohol raw cost increases by 10p, so the goverment should reduce the VAT on that too???

VAT is VAT. Are you all wanting a moan about the VAT rate now too?

Brendan Hughes

Chaps, rather than going on about petrol prices, can I just divert your attention to something important in the General Forum for a second?

http://bbs.scoobynet.co.uk/showthread.php?t=331582

http://bbs.scoobynet.co.uk/showthread.php?t=331560

Many thanks.