do i really pay through the nose for gas because of American demand?

[Newbie 0]

ok we all know the US has cheap petrol/gas prices - no matter what you might think about it being $2.50/gallon out there....over here we are predicted to hit the $5.65/gallon mark by September.

In this article i was just reading....

http://www.guardian.co.uk/oil/story/0,11319,1216421,00.html (i have pasted it below too)

the last paragraph states that US and China's growing demand as well as OPEC cutting production has further pushed up the price of a barrel of crude. Now, i know China is going through massive economic regeneration so industry there will be consuming more oil, but i don't see many average mainland Chinese driving around SUV's and other 12mpg monsters. I also know that 80% of our prices come through tax at the pump, but the govt can't control the prices OPEC set on a barrel, and as demand goes up for limited supply, narurally the world market will see an increase in price/barrel.

So i'm curious - just how much of what i pay at the pump comes as a result of US consumption?

Here is the article for anyone who doesn't want to click.....


Protests loom over rising petrol prices

Terry Macalister
Friday May 14, 2004
The Guardian

The government will today hold an emergency meeting to plan for potential petrol shortages as fuel tax protesters warned of disruption and the industry predicted that the price of petrol could reach 88p a litre - £3.32 a gallon.
The energy crisis, which has already increased the cost of air travel, has been triggered by soaring crude oil prices, which hit $41 (£23) a barrel yesterday and pushed petrol prices to near record levels.

The Department of Trade and Industry confirmed it would hold contingency planning talks with oil companies and petrol retailers. "It's routine for us to test contingency plans for downstream oil disruption," said a spokeswoman. She said the police and local authorities would be involved.

The meeting comes hours after leaders of the protests that brought the country to a halt four years ago said that farmers and truckers faced a situation that was "grimmer than 2000". On top of rising crude prices, the Treasury is planning a 1.9p-a-litre increase in fuel duty in September.

David Handley, chairman of Farmers for Action, said this should be rescinded. "Should the chancellor hold back on the increase, then that would go a long way to appease my industry," he told the Financial Times. "If he does not listen to us, then I can see a reaction taking place that will be just as serious as in September 2000."

Brynle Williams, another former activist and now a Welsh assembly member, said new protests were a "distinct possibility".

The Freight Transport Association and the Road Haulage Association have already written to Gordon Brown demand ing that he shelve plans for future tax increases.

The Treasury said last night that it was looking at tax levels "very seriously". The Petrol Retailers Association warned that the price of petrol was likely to rise further if crude oil remained above $40 a barrel, which many experts now believe likely.

John Healey, economic secretary to the Treasury, tried to reassure MPs by arguing that rates of duty for motorists had fallen by 6.5p a litre over the past four years. "We are taking very seriously concerns about world oil prices," he added. BP confirmed that its prices had increased from an average of 76.6p a year ago to 81.7p now. A spokeswoman said prices were reviewed and adjusted on a daily basis.

She admitted that they were likely to go up if crude prices rose again - which they did in New York yesterday, where the cost of a barrel settled at $41.08, close to an all-time high.

Fears of big rises were enhanced last night by a report circulating in the City of London from Barclays Capital bank. "If prices are still above $40 in a month, we would not be surprised to see them stay above that level for the rest of the year. Indeed, if $40 sticks, then $50 becomes threatened," said Barclays oil analyst Paul Horsnell.

The price of oil has risen amid fears of supply disruptions caused by the upsurge in violence in Iraq and elsewhere in the Middle East.

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Growing US demand and production cuts by the Organisation of the Petroleum Exporting Countries have compounded the problem. China's economic boom has also fuelled demand, forcing it to import large amounts of oil.

"Skydiving is a door"
Happythoughts

[nacmacfeegle 0]

No, we pay through the nose for our petrol because it is so heavily taxed, as it is throughout much of Europe, although we are quite badly off compared to our other neighbours.
If we had petrol prices on a par with our colonial cousins, we'd be dancing in the streets.

The portion of tax that makes up the 80 odd pence per litre is around 73-75%, ie without tax (vat and petroleum duty) our fuel would be around 30p per litre, as opposed to the current 80p.

Now you know why we are about to see some direct action if price and tax increases are passed on to the consumers.

See here for more info and debate on petrol prices from 2000.
http://www.ifs.org.uk/consume/petrol.pdf

Prices will fluctuate according to the laws of supply and demand, but is unfair to blame either the USA or China for our ridiculous tax structure, and subsequent extortionate fuel prices.

--------------------

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. Thomas Jefferson

[Newbie 0]

thanks nac, interesting article.

"Skydiving is a door"
Happythoughts

[nacmacfeegle 0]

No worries Dave, I see you had a bit of a blast at San Marcos, good people, and a cool sign at the DZ.

--------------------

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. Thomas Jefferson

[kelpdiver 2]

You're paying what you're paying because of OPEC price levels.

US usage has definitely continued to grow, esp with this unfortunate SUV obsession, but China's growth is in an entirely different ballpark. Over the past decade personal weath has jumped and many people now own and use cars instead of bicycles.

Prices here are about a 60-70c/gallon higher than typical. The rest is internal issues - taxing at the pump for mass transit rather than via sales tax as is common here.

[PhillyKev 0]

Quote

You're paying what you're paying because of OPEC price levels.

Not really. One barrel of oil costs $40. From that one barrel you get:
19.4 gallons of gas
9.7 gallons of Fuel Oil
4.3 gallons of jet fuel
2.0 gallons of coke
1.9 gallons of residual fuel oil
1.9 gallons of liquid refinery gases
1.8 gallons of still gas
1.4 gallons of asphalt oil
1.1 gallons of petrochemical feedstocks
.5 gallons of lubricant
.2 gallons of kerosene

43% of a barrel of oil goes to gasoline. That means 43% of the price, which at $40 a barrel comes to 89 cents a gallon. If oil was at a very low price of $30 a barrel, that would save you 23 cents.

[kallend 1,671]

Quote

Quote

You're paying what you're paying because of OPEC price levels.

Not really. One barrel of oil costs $40. From that one barrel you get:
19.4 gallons of gas
9.7 gallons of Fuel Oil
4.3 gallons of jet fuel
2.0 gallons of coke
1.9 gallons of residual fuel oil
1.9 gallons of liquid refinery gases
1.8 gallons of still gas
1.4 gallons of asphalt oil
1.1 gallons of petrochemical feedstocks
.5 gallons of lubricant
.2 gallons of kerosene

43% of a barrel of oil goes to gasoline. That means 43% of the price, which at $40 a barrel comes to 89 cents a gallon. If oil was at a very low price of $30 a barrel, that would save you 23 cents.

I think it a very bad assumption that price is proportional to volume. Some of these products have far higher specific value than others, and refining costs are quite different for different fractions.

...

The only sure way to survive a canopy collision is not to have one.

[Guest]

What I cannot grasp is why an industrialized and highly technological society such as ours continues to power its transportation system with distilled DINOSAUR GUTS.

mh

.

"The mouse does not know life until it is in the mouth of the cat."

[PhillyKev 0]

You're right, the finished products have different values based on the refining costs. That's my point. The cost to produce gasoline is less impacted by the price of crude oil than it is by refining, distribution, and speculation on future trends than it is on the price of crude.

The assumption above was made that the cost of crude is what makes the price of gas so high.

[livendive 8]

Quote

43% of a barrel of oil goes to gasoline. That means 43% of the price, which at $40 a barrel comes to 89 cents a gallon. If oil was at a very low price of $30 a barrel, that would save you 23 cents.

Any idea what the price per barrel was 6 years ago when I was only paying $0.85/gallon? After watching our prices go up twenty cents in the last two weeks, I paid the most for gas I ever have in my life Wednesday...$2.18/gallon. I'm curious whether the per barrel prices have gone up the same 160% that the pump prices have.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[Gawain 0]

Quote

43% of a barrel of oil goes to gasoline. That means 43% of the price, which at $40 a barrel comes to 89 cents a gallon. If oil was at a very low price of $30 a barrel, that would save you 23 cents.

That would be accurate if the refining costs were constant and equal for each grade of fuel. They aren't and I don't know what they are, but your example is a good outline.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[Guest]

I'd like to see rationing, myself (with exemptions made for farming, etc.), but it would be difficult and expensive to set up, and hard to enforce.

mh

.

"The mouse does not know life until it is in the mouth of the cat."

[billvon 2,463]

>I'd like to see rationing, myself

What would that fix?

[kmcguffee 0]

Quote

do i really pay through the nose for gas because of American demand?

You guys really do try to blame us for everything don't you? I always thought it was an exaggeration.

"Any fool can criticize, condemn and complain and most fools do." Ben Franklin

[peacefuljeffrey 0]

Quote

Quote

do i really pay through the nose for gas because of American demand?

You guys really do try to blame us for everything don't you? I always thought it was an exaggeration.

I know. It's like the first question that occurs to any non-American to ask is, "Can we at all plausibly blame this on the Americans?"

If not, then they go looking for other causes.

-

-Jeffrey
"With tha thoughts of a militant mind... Hard line, hard line after hard line!"

[Guest]

Quote

>I'd like to see rationing, myself

What would that fix?

Excessive individual consumption, for one thing.

If not rationing, then even higher taxes with the proceeds going directly to the development of alternatives.

mh

.

"The mouse does not know life until it is in the mouth of the cat."

[peacefuljeffrey 0]

5{>I'd like to see rationing, myself

What would that fix?

[billvon 2,463]

>Excessive individual consumption, for one thing.

That would be great for me, but I think that capitalistic forces are a better method to regulate supply and demand than governmental regulation.

>If not rationing, then even higher taxes with the proceeds going
> directly to the development of alternatives.

I'd support that, but I don't think it would ever fly.

[Newbie 0]

If you reread my original post you will see i am asking IF i pay more due to US consumption (i asked a question), not stating i DO pay more because of the US consumption rate. I'm not blaming Americans for anything, im curious to know if the consumption/demand that the US has for oil has a knock on effect for me in the UK.

If you read the article i posted, and this one, you will see that there could be an amount of evidence that links US consumption to worldwide price increases, and that was what i wanted someone to help me understand.

Edited to correct link

"Skydiving is a door"
Happythoughts

[Gawain 0]

Quote

then even higher taxes with the proceeds

*Steam billowing from my ears* .... WTF am I reading?? Taxes and proceeds....arrggghh......I'm melting....

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[nigel99 151]

Quote

do i really pay through the nose for gas because of American demand?

Quote

You guys really do try to blame us for everything don't you? I always thought it was an exaggeration.

It was posed as a question and not an accusation/assumption.

The UK government has a habit of blaming our high fuel prices on everyone and their dog - forgetting the circa 80% fuel tax's that they impose. I don't think it is unreasonable to question the impact of american demand on world fuel prices - the fact that they are 1 of the largest consummers must have some influence.

Experienced jumper - someone who has made mistakes more often than I have and lived.

[peacefuljeffrey 0]

Quote

If you reread my original post you will see i am asking IF i pay more due to US consumption (i asked a question), not stating i DO pay more because of the US consumption rate. I'm not blaming Americans for anything, im curious to know if the consumption/demand that the US has for oil has a knock on effect for me in the UK.

Yes, and I'm saying that the very question itself is biased toward blaming the U.S.

Why did you not ask, "What's responsible for the outrageous prices I pay for gasoline?"

Wouldn't that have a bit less implication of predisposition toward thinking it must be the Americans?

People -- especially those in Europe -- love to knock the U.S. for its consumption; I wonder if everyone considers how much larger the U.S. is than typical European countries, and how much greater the population. Is it fair to compare the U.S.' oil consumption with that of Britain? Let's not forget to compare the rates on a per capita basis, and let's also not forget that the geography of our country is such that our driving distances -- to visit relatives, to get to work, to go to recreate -- tend to be longer just because our country is vastly larger. So it's our fault that our aunt lives 1300 miles away instead of 130? That's gonna take more gas.

So, to recap: I think it was telling that instead of asking "what causes our gas prices" you asked, "Does the U.S. cause our gas prices?" And even if we DO cause them, hey, that's life and there really isn't something to blame us for, because you'd be doing the same thing if you lived in our country, too.

Why don't we talk about pollution? Europe is famous for its industrial and air pollution. European cars are made, it is my understanding, with lesser pollution control than those allowed in the U.S. and therefore have to be modified before they may be imported. Should we be griping about the nasty overconsuming overpolluting Europeans, I wonder?

-

-Jeffrey
"With tha thoughts of a militant mind... Hard line, hard line after hard line!"

[kallend 1,671]

Quote

Quote

If you reread my original post you will see i am asking IF i pay more due to US consumption (i asked a question), not stating i DO pay more because of the US consumption rate. I'm not blaming Americans for anything, im curious to know if the consumption/demand that the US has for oil has a knock on effect for me in the UK.

Yes, and I'm saying that the very question itself is biased toward blaming the U.S.

Why did you not ask, "What's responsible for the outrageous prices I pay for gasoline?"

Wouldn't that have a bit less implication of predisposition toward thinking it must be the Americans?

People -- especially those in Europe -- love to knock the U.S. for its consumption; I wonder if everyone considers how much larger the U.S. is than typical European countries, and how much greater the population. Is it fair to compare the U.S.' oil consumption with that of Britain? Let's not forget to compare the rates on a per capita basis, and let's also not forget that the geography of our country is such that our driving distances -- to visit relatives, to get to work, to go to recreate -- tend to be longer just because our country is vastly larger. So it's our fault that our aunt lives 1300 miles away instead of 130? That's gonna take more gas.

So, to recap: I think it was telling that instead of asking "what causes our gas prices" you asked, "Does the U.S. cause our gas prices?" And even if we DO cause them, hey, that's life and there really isn't something to blame us for, because you'd be doing the same thing if you lived in our country, too.

Why don't we talk about pollution? Europe is famous for its industrial and air pollution. European cars are made, it is my understanding, with lesser pollution control than those allowed in the U.S. and therefore have to be modified before they may be imported. Should we be griping about the nasty overconsuming overpolluting Europeans, I wonder?

-

1. Western Europe now has stringent pollution controls required.

2. While you are correct insofar as you went, you omitted to justify the US tendency to drive gas guzzling monsters, like the neighbor of mine whose Lincoln Navigator never gets farther off-road than the car wash.

...

The only sure way to survive a canopy collision is not to have one.

[christelsabine 1]

Quote

1. Western Europe now has stringent pollution controls required.

We in Europe do have. Starting with 2005, laws will be much more sharpened as they already are. pollution regulations are stricty handled.

Quote

2. While you are correct insofar as you went, you omitted to justify the US tendency to drive gas guzzling monsters, like the neighbor of mine whose Lincoln Navigator never gets farther off-road than the car wash

there is something like a joke about what
the US use to say:

"
Why to control oil consumption? We have large wide lands, our highways are built with each 5 lanes, why to reduce anything? what do we have to do with the rest of the world? why to reduce any pollution? we love our big cars, our 4wheelers and don't mind the rest of the world.

why to agree on any environment compacts? "

The US just is simply disregarding environmental factors.

This post in fact is not to be addressed to you but, much more

@ Peacefuljeffrey which seems to have (no) a wrong idea about how we treat this important point of air pollution in Europe.

It was which country refusing to enter international agreements on environmental protection/controlling better: reducing! air pollution of industry etc. ? Let me think a moment...

dudeist skydiver # 3105

[Newbie 0]

Did you even bother to read the articles i pasted? Let me recap the areas in question that had led to my original post. From the first article:

1 Growing US demand and production cuts by the Organisation of the Petroleum Exporting Countries have compounded the problem.

And from the second article:

2 Oil prices have risen 27% since start of year, driven by demand in the United States, where stocks are low.

No i don't believe everything i read in the papers, which is why i wrote the post in the first instance, to see if anyone could expand on how much impact - if any - on how growing US demand can affect prices at my pump. I do know stocks are depeleting and there is continual growing demand in the US, however, but i'm no economist.

And i have lived for a couple of years in the US, in San Francisco. I rode a bicycle and took the bus/MUNI (apart from out of state trips, when i would fly). I did have a hire car for 3 days (Mustang) which - while fun - did make me feel guilty about just how much gas i was going through, even in light of it costing less than half what my super compact costs to fill over here, believe it or not. Just because everyone does something and it's the done thing, doesn't make it right thing to do.

"Skydiving is a door"
Happythoughts