boilnoil - "Now in Europe they have a supply problem, most of the stations are out of fuel completely and fuel is over 5.00/gl
Ouch!! FWIW "
Europe out of supply ? I've seen that on CNN too. Not on the streets. What happens is hamstering, as in any crisis.
The crowd (families, companies...) are busy filling their tanks, adding to demand and sending prices higher. Sounds familiar ?
Another major player in the world demand for oil is China. They are currently building up their stategic reserves.
Third element is the slowdown in new investments these last years when oil was at it's lows. Cos. as GLM, HAL, FLC have suffered a lot.
Gas around $5 a gal. in Europe: yes. But this is a component of European tax policy. Part of the price also are the stringent environment norms already obligatory.
In Europe, fuel is at some $4.16 /gal.
Guideline from EU is to levvy a minimum of $0.72 accises/gal. (UK doubles that amount).
Component of the price also is VAT. In the Value Added Tax system, at any intermediary step, the sales price carries a VAT, but the intermediary is credited for the VAT he has paid to his provider. In effect, paying the tax only on his margin (hence the name VAT). For fuel, most countries tax 20%, or $1 component per gal. For most professionals, that $1 is a credit of taxes, not a part of the price.
So fuel is at the station, without tax components, at about $2.44 /gal.
Heating fuel does not carries the accise axes.
Gasoline has the same pricing scheme, but I don't know how much accises are levvied.
So, when you hear some OPEC ministers saying that Europe levvies 70% taxes, take that with a TON of salt, this is NOT true, and this is a VAT system.
Further, all those petro-Dollar rich countries, with no exception, are one the list of developing countries and receive development credits from US and Europe.
If US and Europe were to cut development aid (coz. of high oil prices), this would impact the little people there, not those that have the power. And as these countries are not exactly democracies.... |
