Benzene May Hit 45 Baht Per Liter & Diesel Could Hit 38 Baht Per Liter In The Next Few Days

[Plus]

if that's what adds up to be the sticker price or price on a shelf somewhere, it's the market price....it doesn't matter how you divy it up: into taxes, overhead, raw materials cost, bribes, whatever

Taxes and free market are direct opposites. Who taught you otherwise? It's like saying that Pak Mool Dam is a natural phenomenon. Of course it doesn't stop the river from flowing or market from functioning but it's not a free flow or free market anymore. Do you REALLY believe in what you said or just being asinine on puprpose?

Actually in a democracy people can choose the government that proposes higher or lower taxes according to benefits they recieve, so there's some sort of a market mechanism. Your idea of raising car taxes by 50% is a non-starter and has no political support whatsoever, I don't want to waste any more time on that.

I joined this thread when some people implied that using public transport is cheaper than driving so traffic jams will disappear. Of course the sudden increase will have a shock effect and people will try to save money by driving less, but whether it's sustainable is a big question. Now that schools are opened morning traffic is the same as it was back in February. And I don't see any evidence of people switching to riding buses.

Plenty of folks all over Bangkok own their streets and have toll gates set up. People who are willing to pay do so, and those who aren't just avoid the area.

My concern wasn't about the fees but about extra snags created by stopping the traffic to collect them.

Another question is - who will stop driving to Sathorn? It's a highest income area in the country, fees are not the obstacle.

>>>

Nimber of cars in the inner city will decrease due to convenient alternatives, not due to higher taxes. MRT's "Park and ride" on Lat Prao works very very well, and both parking lots at BTS stations are always full. That's how they plan to stop cars from entering the city.

[Naam]

I filled up the pick-up a couple of weeks ago and managed to squeeze in 1,900 baht's worth of diesel. That was a new record for me.

Then yesterday I filled up again and set a new personal record of 2,000 baht.

wife told me yesterday "first time Accord fill-up more than 2,000 Baht!"

[Heng]

Taxes and free market are direct opposites. Who taught you otherwise? It's like saying that Pak Mool Dam is a natural phenomenon. Of course it doesn't stop the river from flowing or market from functioning but it's not a free flow or free market anymore. Do you REALLY believe in what you said or just being asinine on puprpose?

I'm not saying anything is a natural phenomenon. I'm saying that whatever contributes to the final price is indeed part of the market price. Do you REALLY have nothing else to say other than to argue about textbook definitions?

Actually in a democracy people can choose the government that proposes higher or lower taxes according to benefits they recieve, so there's some sort of a market mechanism. Your idea of raising car taxes by 50% is a non-starter and has no political support whatsoever, I don't want to waste any more time on that.

I'm talking about whether it would work or not, not whether it's going to happen or not. If we're going to talk about what's going to happen, it's going to be much of the same for a long time. Which is just fine.

I joined this thread when some people implied that using public transport is cheaper than driving so traffic jams will disappear. Of course the sudden increase will have a shock effect and people will try to save money by driving less, but whether it's sustainable is a big question. Now that schools are opened morning traffic is the same as it was back in February. And I don't see any evidence of people switching to riding buses.

Whether they are driving less or switching to buses is the same result as far as I'm concerned: thinner traffic on the roads. It's the same result even if it's the last thing that they cut back on after dining out, going out, drinking less, eating less, gambling less, whatever...

My concern wasn't about the fees but about extra snags created by stopping the traffic to collect them.

Another question is - who will stop driving to Sathorn? It's a highest income area in the country, fees are not the obstacle.

Number of cars in the inner city will decrease due to convenient alternatives, not due to higher taxes. MRT's "Park and ride" on Lat Prao works very very well, and both parking lots at BTS stations are always full. That's how they plan to stop cars from entering the city.

I don't think the snags will any more serious than the snags created by the toll booths at the Dept. of Land Transport or any of the toll booths for the expressways all around the city. I don't think that there is anything that a good civil engineering team can't come up with a solution to if given the opportunity.

Everyone has a breaking point. For example, I probably wouldn't pay a X,000 Baht toll to use the expressways, especially since I'm not really driving, but working, playing pc games, or dozing as I go. That doesn't mean I can't afford it, but like all people, I do have a certain point where I think a 10-40 kilometer ride shouldn't have a particular pricetag. Your logic, as it has been all along, is that people will continue to drive, in their current numbers no matter what the cost. That's ridiculo and if anything shows your lack of understanding of the marketplace.

If you think people will suddenly jump on the BTS just because there are more park and rides, that's in direct conflict to your opinion that you can't stop the better to do from entering downtown just because there are tolls. There needs to be an additional downward pressure to reduce the number of cars. I totally agree that people love their comfort, I most certainly do as well.

The number of cars will most certainly increase if you make cars more expensive and less accessible. I think if you increase the fuel price in the cities, and nearby surrounding areas, that would also help as well. Whether that happens through "natural" market forces or gov't intervention, I think the result would be the same.

About to do a cross town jaunt to Bang Khen. I bet I'll be back by 1-2pm. This same trip in the old days would be an all day affair.

back later, dude...

Edited May 23, 2008 by Heng

[Plus]

whatever contributes to the final price is indeed part of the market price. Do you REALLY have nothing else to say other than to argue about textbook definitions?

No, I see that you have a very odd understanding of taxes and markets. It's not my job to re-educate grownups like you.

I don't think the snags will any more serious than the snags created by the toll booths at the Dept. of Land Transport or any of the toll booths for the expressways all around the city. I don't think that there is anything that a good civil engineering team can't come up with a solution to if given the opportunity.

A snag on four lane expressway with twelve gates is not quite the same as snag on three lane Witthayu Rd with two gates they can fit in there. Those roads were not designed to accomodate toll booths.

Now it's the time to come up with possible solutions - which areas should be cordoned off, for example. It's opinion gathering stage, after all.

In London there are no gates or booths, they use cameras to read license plates and charge your account automatically. I don't think Thailand is ready for that - they'll have to physically stop each car on every street and collect the fees or let them through, like "tag" lanes on expressways. Actually those tag lanes don't work anymore, Thais can't manage even that.

[bonobo]

If it's something that the consumer pays, is willing to pay, or is not willing to pay, it's part of the market price.... it doesn't matter how you divy it up: into taxes, overhead, raw materials cost, bribes, whatever... if that's what adds up to be the sticker price or price on a shelf somewhere, it's the market price. Who told you that it wasn't, Plus? Feel free to go off on a semantics tangent if you can't think of anything better to say.

Actually, this is true. I don't mean to get into a huge debate over definitions, but the consumer does not differentiate how a given price is divied up. It is the total amount of baht going out of a person's pocket, not whether a certain percentage goes to the government, a station owner, the oil, company, etc.

[highdiver]

the price of oil is going up because its is speculated over the markets.

financial giants are bubbling up the commodities markets and oil is a major player.

the oil prices can not go down as long as heavy speculations are going on

[Heng]

If it's something that the consumer pays, is willing to pay, or is not willing to pay, it's part of the market price.... it doesn't matter how you divy it up: into taxes, overhead, raw materials cost, bribes, whatever... if that's what adds up to be the sticker price or price on a shelf somewhere, it's the market price. Who told you that it wasn't, Plus? Feel free to go off on a semantics tangent if you can't think of anything better to say.

Actually, this is true. I don't mean to get into a huge debate over definitions, but the consumer does not differentiate how a given price is divied up. It is the total amount of baht going out of a person's pocket, not whether a certain percentage goes to the government, a station owner, the oil, company, etc.

Thanks Bonobo. And no kidding. It doesn't matter whether one feels the end price is manipulated, natural, or artificial, the market price is the price that the market will bear.

[nothingleftbutfaith]

the price of oil is going up because its is speculated over the markets.

financial giants are bubbling up the commodities markets and oil is a major player.

the oil prices can not go down as long as heavy speculations are going on

You are wrong.

It is a simple supply and demand equation.

Not to say that there is no speculation, but it is not the main factor.

[Heng]

No, I see that you have a very odd understanding of taxes and markets. It's not my job to re-educate grownups like you.

I'll take that as *no you don't have anything better to say.*

A snag on four lane expressway with twelve gates is not quite the same as snag on three lane Witthayu Rd with two gates they can fit in there. Those roads were not designed to accomodate toll booths.

That's the beauty of being able to redesign something.

Now it's the time to come up with possible solutions - which areas should be cordoned off, for example. It's opinion gathering stage, after all.

In London there are no gates or booths, they use cameras to read license plates and charge your account automatically. I don't think Thailand is ready for that - they'll have to physically stop each car on every street and collect the fees or let them through, like "tag" lanes on expressways. Actually those tag lanes don't work anymore, Thais can't manage even that.

An excellent suggestion though.

Different colored/barcoded plates for those who are allowed in the zone might be a possible alternative. These would have to be paid for in advance along with yearly vehicle registrations. I don't think more than a dozen controlled zones would be needed for large metro areas like Bangkok. Fewer for the smaller metro areas and none for country areas. To keep cars from getting too cluttered, I think small but visible credit card sized barcode plates would be better. Naturally public buses would be allowed in and out with these plates and there would have to be handheld scanners to check which plates are legit or not (wouldn't be too hard to do if/when traffic slowed down... where are they going to run?).

Another would be not to tax/collect tolls from people when they are actually driving, but to "get them" when they have already parked. It could be a meter maid type system with the police or particular agency allowed full access to all office parking structures in addition to any public street with the a copy of the bill/ticket affixed to the car and another copy automatically sent to the car owner's registered address. Payable through any of the mainstream payment processing services like Paypoint or Counter Service. Just like no one would park in MBK if they were charging 4,000 Baht for 3 hours instead of 40 Baht, I think eventually you could significantly reduce the number of people parking (and hence driving) downtown.

[Plus]

If it's something that the consumer pays, is willing to pay, or is not willing to pay, it's part of the market price.... it doesn't matter how you divy it up: into taxes, overhead, raw materials cost, bribes, whatever...

You forget to look at it from the sellers point of view - he doesn't want to include your tax in his price, you force him.

The whole concept of market is a relation between supply and demand, buyers and sellers. Taxes come from a third party, absolutely uninvited. Both buyers and sellers do not want them in any shape or form, they have no value whatsoever and having nothing to do with the market.

You confuse what happens AFTER the taxes are imposed - the market continue to function, it's just not free anymore, it's been distorted.

The whole idea of a free market is to reduce taxes to minimum or at least make them flat, like VAT - it doesn't matter what the product is, it's always 7%.

Thailand is legally commited to developing free market economy and in some cases it could be sued for interfering in the market with extra taxes.

[Heng]

You forget to look at it from the sellers point of view - he doesn't want to include your tax in his price, you force him.

Evening Plus,

If one wants to make an omelette...

The whole concept of market is a relation between supply and demand, buyers and sellers. Taxes come from a third party, absolutely uninvited. Both buyers and sellers do not want them in any shape or form, they have no value whatsoever and having nothing to do with the market.

You confuse what happens AFTER the taxes are imposed - the market continue to function, it's just not free anymore, it's been distorted.

The whole idea of a free market is to reduce taxes to minimum or at least make them flat, like VAT - it doesn't matter what the product is, it's always 7%.

Thailand is legally commited to developing free market economy and in some cases it could be sued for interfering in the market with extra taxes.

I'm not here to promote a textbook "free" market, I'm making suggestions to reduce the number of cars on the road.

edit: forgot to add a: for the highlighted comment above

Edited May 23, 2008 by Heng

[Plus]

the consumer does not differentiate how a given price is divied up

Actually it's not true. Consumers usually ask what they are getting for their money, then they decide if sunroof, DVD player or GPS system is worth the extra expense. Just the other day someone asked in Motoring forum if 1.4mil price increase for V6 Accord is justifiable. He was immediately referred to prices in a free market country to find the true difference in value and told that in Thailand most of 1.4 mil increase is extra taxes. Every week or so people ask why some cars are so expensive here and others are so cheap, and answer is always the same - tax.

Customers do care.

In a free market economy government has no authority to intefere in business transactions at will, and Thailand can be sued in WTO courts for restricting free trade. German car makers threatened exactly that when Thais were negotiating low import tax on Japanese cars.

>>>>

Heng,

When eco car projects come on line we'll see acceptable entry level cars possibly at a half price than they are now and car sales will probably double in a few years time.

That's what's going to happen regardless of free market textbooks or your tax proposals, we better think how to deal with that.

>>>

Main problem with bar code system is that Thailand doesn't have a national database for every car and no working system to collect fees from car owners other than through a car window. In London it's all done online in milliseconds.

Also in London the area is almost like a circle, Silom+Sathorn+Sukhumwit are not even connected to each other. What about Rajawithi, Witthayu, Petchburi, RamaIV or Suriwong?

I think it's a lot easier to cordon off Chinatown+Rattanakosin area, it has clear boundaries and only one straight through road - Rajadamnoen. In London they don't charge for straight through traffic.

Also London "congestion charge" area includes about 30-40 Tube stations. Silom has only one.

[A_Traveller]

Maybe there should a thread, the Heng and Plus Show.

Just an interjection, if I may. Many are now blaming the oil companies for making excessive profits during this, to me strange but inevitable period. The reality is that though the headline numbers are greater, the percentages are similar or lower to profits being made when oil was 25USD a barrel, further, an independent estimate has identified that costs of exploration and recovery have at least doubled since 2000.

Regards

[Heng]

Actually it's not true. Consumers usually ask what they are getting for their money, then they decide if sunroof, DVD player or GPS system is worth the extra expense. Just the other day someone asked in Motoring forum if 1.4mil price increase for V6 Accord is justifiable. He was immediately referred to prices in a free market country to find the true difference in value and told that in Thailand most of 1.4 mil increase is extra taxes. Every week or so people ask why some cars are so expensive here and others are so cheap, and answer is always the same - tax.

Customers do care.

You're cherry picking (in this case a particular product where everything is itemized for the consumer to see), Plus. People may ask, but in most cases hardly stops them from buying now does it? They accept that whatever the end price is, it's the market price. I often compare prices of various goods and their prices in other countries all the time before purchasing, but since it's usually not feasible to import it in myself, I just go with the local price. IMO that's about par for most consumers.

In a free market economy government has no authority to intefere in business transactions at will, and Thailand can be sued in WTO courts for restricting free trade. German car makers threatened exactly that when Thais were negotiating low import tax on Japanese cars.

Again, A "threat" compared to them bending over for import duties and taxes for the last 20-30 years on all of their imported/non-local assembly cars that they are and have been selling (at times in regional record numbers) every single day?

Heng,

When eco car projects come on line we'll see acceptable entry level cars possibly at a half price than they are now and car sales will probably double in a few years time.

That's what's going to happen regardless of free market textbooks or your tax proposals, we better think how to deal with that.

My tax proposals: both upfront and yearly registration taxes are exactly how we should deal with cars overflowing the roads. The current pricing (with both high profit margins and import/other taxes built in) on Minis, Prius, VW Bugs, Alphards, etc. etc. is exactly what keeps large numbers of these cars OFF the road. There's no reason to think that it wouldn't work for every single car model out there. I'm all for eco cars, I'm also for fewer cars in general. I'd love to see Bangkokians and countryside Thais driving Japanese hybrid compacts and maybe trucks one day at entry level prices that would keep the numbers on the road reasonable.

>>>

Main problem with bar code system is that Thailand doesn't have a national database for every car and no working system to collect fees from car owners other than through a car window. In London it's all done online in milliseconds.

Also in London the area is almost like a circle, Silom+Sathorn+Sukhumwit are not even connected to each other. What about Rajawithi, Witthayu, Petchburi, RamaIV or Suriwong?

I think it's a lot easier to cordon off Chinatown+Rattanakosin area, it has clear boundaries and only one straight through road - Rajadamnoen. In London they don't charge for straight through traffic.

Also London "congestion charge" area includes about 30-40 Tube stations. Silom has only one.

Yeah, I didn't say that there wasn't a lot of work that needed to be done, Plus. I don't have anywhere to park the car that I'm currently contemplating buying either... it doesn't mean I can't build another garage to house it though.

[PeaceBlondie]

Like the auto market, high capitalization costs prevent any new players to enter the oil and gas industry as large scale players, and I suspect the day of wildcat drillers is dwindling or gone. Note that the biggest companies in the world are now paying the spot market price of $125 a barrel even when buying millions of barrels in one purchase. Even when they decide to increase refining capacity in the First World, the NIMBY factor requires them to expand existing refineries, which also have a limit.

There are, indeed, times when buyers are curious about the built-in taxes at the retail price. I just bought a new CBR150R and that thought never crossed my mind. A new Range Rover, however, would raise the question, but be moot because I know of no market so 'free' that there are no taxes, direct or indirect, for most consumer items. People hate to pay taxes, but they demand clean gasoline, safe refilling stations and transport trucks, modern roads, etc. They are even willing to pay for traffic police, 200 baht per payment, rather than face the consequences.

I just filled up for 39.24 baht per liter (91 benzene), so that part of this topic's headline has come true, about 25 days later.

[Heng]

Arguments as to whether it'll go to 45-50-60-70-100 Baht a liter aside, it'll be interesting to see which school of thought is more prevalent if this trend persists. No doubt some people will pay 4,000 Baht a tank/16,000 Baht a month on fuel in their 1800 cc cars, and maybe even at that rate the roads might still be fairly crowded, but like all things if not the number of cars in a clear and visible sense, something else will surely give. I wonder what that'll be.

[JetsetBkk]

... something else will surely give. I wonder what that'll be.

. .

[slapout]

Todays Nation had a interesting article, front page, on meeting between govt and refiners.The refining charges by the in country refiners blow the mind when compared to the real world. If the articles' numbers are true, the refining margin is more than double normal refining margins. The numbers quoted do seem correct as they agree with past statements made by some of our learned politicians. When this type of profit is added to the petrol pump it is easy to see another reason the price of fuel is so high here in Thailand.

[PeaceBlondie]

Todays Nation had a interesting article, front page, on meeting between govt and refiners.The refining charges by the in country refiners blow the mind when compared to the real world. If the articles' numbers are true, the refining margin is more than double normal refining margins. The numbers quoted do seem correct as they agree with past statements made by some of our learned politicians. When this type of profit is added to the petrol pump it is easy to see another reason the price of fuel is so high here in Thailand.

That could well be true, though we cannot believe the journalists, politicians, or oil executives. However, one reason given by Exon and Mobil for not building more refineries is that overall, including capital costs, the net profit margin is not high enough. Hard to say what is a reasonable profit for a changing technology over a sixty-year life span.

[A_Traveller]

A key reason also has been the effective impossibility {at one stage it was estimated that the planning process, encompassing state & federal actions, the inevitable legal challenges etc. would take up to 10 years just to get to a position of maybe breaking ground} to build a refinery in the continental US, driven as much by 'ecological' concerns, often, of course, being used as a shield for NIMBYism.

By the by the US imported 1,274,000 barrels of 'finished' petroleum products, that is refined, in the month of Feb. 2008 per day.

Regards

PS Under US law the board has to show that it is acting in the best {read profitable} interest of the shareholders. A CEO would find it difficult to sell the 10 year process without any guarantee of return, even without the impact of an Icahn.

Edited May 24, 2008 by A_Traveller

[slapout]

PB; the main reson refining capacity has gone down and is not being rebuilt is the environmental concerns that must be approached. The refinering margin of profit has been less than 10 US/ bbl for new construction and old construction worked on a 3 to 4 dollar margin. Another problem is a refinery is set up on the type of oil it will handle Gravity, sulphur content, etc, so to buy from a different source mods may be required to the refinery. You can even buy ready made refining units which are portable and assemblied on site. The bean counters can give very accurate numbers prior to building and the pay out per bbl handled. Oil companies (public held) would have a hard time BSing on these numbers, though politicans and journalists may not have a clue on what is happening or questions to ask those who do know.

[Plus]

They accept that whatever the end price is, it's the market price.

That's a useless criterion - by this logic USSR was a market economy, too. They had prices and people bought what they could afford.

I have nothing against taxes, btw, I just have a different opinion on the benefit of rasing auto taxes. I think Thai government has done a great job with auto taxes so far - they have really put this country on a world map in this business. Artificially created demand for pickup trucks to build economy of scale which attracted investments they would have never seen otherwise, domino effect followed with small passenger cars and supporting industries and that attracted even more investments.

Eco car is their next big thing as there's no more growth in their traditional segments left, and they hope to use the same strategy that worked with pickup trucks - lower taxes to increase volume.

One thing they should also get credit for - consistently overtaxing large, powerful engines to decrease overall fuel consumption. I bet an average Thai car consumes half of an average American.

Edited May 24, 2008 by Plus

[Plus]

Check this guy's story:

Government official, late 20s, unnamed

"The room I'm sitting in is filled with overachievers. Many graduated top of their class, some with PhDs, and all are ranked well within the top 1 per cent of the country's most highly educated. All are earning less than Bt13,000 a month.

Despite popular belief you need to be loaded to pursue an elite education and take a salary hardly enough to pay for petrol: more than half of my colleagues take the bus to work. Those who don't drive the smallest cars with the most efficient petrol use. They still spend half of their salary on fuel.

Filled with idealist views of saving the environment and playing a small part in improving Bangkok's traffic, I initially took the bus to work. It worked out all right in the beginning, although I started worrying the pollution would give me lung cancer.

Then, the final straw - the rain. On the best buses, it still got stuffy and claustrophobic. Everyone is forced to shut windows to stop the inside of the bus from getting drenched. On the worst, leaks meant I got an impromptu shower. It took two hours to get home.

I dug out the rest of my savings and got my ageing car fitted with a gas system. I save a bit more on transport now, even though it cost me four months' salary. I worry that LPG prices will rise, too.

It's not all bad though. The ministry canteen charges Bt25 a dish, although we all gasp in awe at a bar of Wall's Magnum ice cream that costs an unholy Bt40.

We thank the rain. It means electricity for air-conditioning at home is saved. Gruelling 12-hour work days cut down on home electricity bills, too.

Why do we do this? Well, for new civil servants, we say we've taken enough from the country and want to give back. I hope and pray we do not change."

http://www.dailyxpress.net/2008/05/25/cove...rstory_2433.php

[PeaceBlondie]

I have a friend who felt he had to pay back to his country for the tax dollars that paid for his first two degrees from state universities. He did the most brains-taking work at the IRS. Saved half his take-home pay for 35 years. Earned two more degrees, and finally retired after some of us convinced him that his own taxes had more than repaid his free education. Cars? He owns 8, everything from a 1961 Beetle to a Mazda Miata sports car and a big V8 truck, and he thinks nothing of driving 1000 km in a day.

It is good national policy to impose high taxes on petrol or gas-guzzlers.

[jumnien]

I agree with a high tax on gas-guzzlers. A high tax on over-eating would be welcome as well! Let the under-nourished folks eat, too!

[Heng]

That's a useless criterion - by this logic USSR was a market economy, too. They had prices and people bought what they could afford.

Useless to your argument, no doubt.... which has nothing to do with whether raising prices through margins and taxes would reduce the number of cars on the road, which it would.

I have nothing against taxes, btw, I just have a different opinion on the benefit of rasing auto taxes. I think Thai government has done a great job with auto taxes so far - they have really put this country on a world map in this business. Artificially created demand for pickup trucks to build economy of scale which attracted investments they would have never seen otherwise, domino effect followed with small passenger cars and supporting industries and that attracted even more investments.

Yeah, you have nothing against them besides arguing against them when they might result in you having to pay more for your next car.

Eco car is their next big thing as there's no more growth in their traditional segments left, and they hope to use the same strategy that worked with pickup trucks - lower taxes to increase volume.

That would of course be the result. Which would certainly be appropriate if we were discussing ways to increase car sales.

One thing they should also get credit for - consistently overtaxing large, powerful engines to decrease overall fuel consumption.

And at the same time keeping the number of gas guzzlers off the streets. Of course it works. It would also work for all engine classes. End result: fewer cars and trucks on the road.

[Plus]

End result: fewer cars and trucks on the road.

That's not the goal.

The goal is less traffic jams - less cars in some tight places. All around the world it is done through proper traffic management, not through increasing taxes.

Proper traffic management doesn't have any negative effects.

Increasing taxes has too many downsides to count, but it's obvioulsy the easiest way for all around incompetent government.

[Heng]

End result: fewer cars and trucks on the road.

That's not the goal.

The goal is less traffic jams - less cars in some tight places. All around the world it is done through proper traffic management, not through increasing taxes.

The goal is fewer cars, resulting in lighter traffic. The goal is indeed not fewer cars on the road where there are no traffic problems. Proper traffic management is hardly going to be abandoned, all along I've said these are two things that should be undertaken at the same time.

Increasing taxes has too many downsides to count, but it's obvioulsy the easiest way for all around incompetent government.

Easy, probably not. Most effective given the tools and level of competence available, I agree.

Fin?

[PeaceBlondie]

PB; the main reason refining capacity has gone down and is not being rebuilt is the environmental concerns that must be approached. The refinering margin of profit has been less than 10 US/ bbl for new construction and old construction worked on a 3 to 4 dollar margin. Another problem is a refinery is set up on the type of oil it will handle Gravity, sulphur content, etc, so to buy from a different source mods may be required to the refinery. You can even buy ready made refining units which are portable and assemblied on site. The bean counters can give very accurate numbers prior to building and the pay out per bbl handled. Oil companies (public held) would have a hard time BSing on these numbers, though politicans and journalists may not have a clue on what is happening or questions to ask those who do know.

Thanks, slapout. It is difficult to get a side conversation going here. You are right that the oil company executives and spokesmen are more reliable than politicians and journalists.

Speaking of O&G bean counters, I knew a revenue agent-engineer at the IRS who audited the tax records of a very big oil refinery near Houston, which had claimed over a million dollar tax credit for building a new facility. The agent-engineer asked to see the facility, and after driving her around the massive compound, the comptroller nervously said, "Well, maybe we did not build it."

[slapout]

Texas seems to make a practice of this type of business, first it was directional wells from railroad right of way, wheat in non-existant elevators, oil wells which were never drilled, etc had to be a nightmare for the investors, Government and the IRS. If I remember correctly GW held a intrest in oil company which lost investor money during the boom of the 70's and 80's, another form of listen to what I say not what you see and read.