Friday, November 09, 2007

One for the clever sods

Consider the new high price of petrol in the UK?
Consider the new high exchange with the dollar?
Consider the traditionally lower price of petrol in the US?

What relative price/exchange rate and volume would we have to see for it to become cheaper to buy petrol in the US and ship it over to the UK, than buy it on a Shell forecourt?*

Neil

* Yes, I know we wouldn't be ABLE to do it - its hypothetical!

21 comments:

Anonymous said...

Ah.

Give me something hard to do.

Lets take the current price of a gallon of petrol in the USA to be US $3

A Gallon is 3.78 thus they are paying about 80 cents per Litre.

With the current exchange rate of £1 giving 2.10, that is effectively 39 pence per litre of US fuel.

With us currently paying £1 per litre a price of 39p sounds quite nice huh?

Well then we can go two ways.

Do you want me to include Mr Browns wonderful sales tax on petrol? Nope, thought not. So shipping costs then.

Well this is where you hit a snag. You can’t ship refined petrol. It in-fact would be very, very silly to try it. You’d have a 1000 tonne floating flammable bomb. There is a reason you ship crude oil and then refine it at the country of destination!

But, since we are talking hypothetically. Lets say you *COULD* (You can’t, but hey!) You have the added issue that about the smallest TANKER you can get to traverse the North Atlantic is about 1000 tonnes. (

You now need to find a tanker that isn’t currently working under contract to a major oil company and is willing to traverse the North Atlantic just for you. Ok, not an issue. You can hire a 1000 tonne tanker for a price of about $23 per tonne. PER TONNE. Do you know how much petrol you are going to have to buy?

As the tanker would have previously been carrying crude oil, add in the full cost of cleaning it to a very clean level to be able to place a highly refined product such as petrol in there.

Add hazard pay to pay the ship captain and crew to crew a floating bomb over the high seas where a single ember or similar can explode the entire tanker in the worlds largest napalm bomb. (Probably paying double the normal amount, lets call it $46 per tonne,

Add to that the cost of hiring a fleet of Oil tankers to drive the petrol from petrol forecourts to the tanker.

The expense of getting it loaded on.

The expense of getting it loaded off at the other end.

The expense of paying another fleet of trucks to get it to North Sheilds.

Then the storage costs in North Shields of 1000 tones of highly flammable petrol…





And then they’d catch you for tax.

D.

Vodkashok said...

Oh you and your legal niceities. In the world of silliness that I am suggesting where you paid £50 for 50 litres last night, you would have by your calculations what? £30 spare on a full tank to get to the UK!

So we know that you can get an airfare to the UK from the US for what? £300? So thats only ten full tanks and you are saving!!!!

OK, I am being silly but the idea of sitting next to a large barrel of petrol on the way back from NY makes me titter

'Sorry Mr Customs Man - of course its for my personal use...'

Neil

Anonymous said...

Given that you cant even take a bag of colourless gel or a bottle of water on the plane I think the chances of getting large barrels of petrol on board without anyone noticing is a bit slim...:)

andrew

Anonymous said...

Interestingly, on the average UK litre of petrol, 75% of the cost paid is tax.

Meaning that production costs and profit for oil companies on a litre is about 25p

While Gordon chuckles all the way to the bank with 75p per litre of my money.

Personally I think it would be far easier to shoot all the bleeding heart lefty greenies and get Petrol tax removes. :-p Be like the Americans! they don't seem to give a shit about saving the environment. Lets all drive Humvees!

Then of course you need to plug a rather large £30bn funding black hole in the governments spending plans.

Anonymous said...

While I'm still not convinced that the green / lefty idea of taxing cars to the hilt to make people drive less when there is often no alternative makes sense.

I'm also a firm believer the Americans are just bat-shit insane. They moan constantly about needing cheap petrol because they have a bigger country and thus drive more miles. In truth I suspect many people don't drive that much more miles (based on how close they seem to have a lot of things to them even if that means two ridiculously large retail parks very close together), and if it is true they drive so many miles why buy a car with two tanks of petrol that guzzles at 5 mpg or something.

Americans. Crazy people.

Anonymous said...

Personally I am not convinced that there is a lack of alternatives.

Certainly throughout Co Durham provided you dont live in the middle of nowhere then the busses are frequent and accessible.

If you need to go further then our train system does actually work quite well even if we do love to complain bitterly about it.

andrew

Anonymous said...

I think it depends on what you are trying to do Andrew.

Live within a certain urban zone and want to get into work within that urban zone? I'm sure that's possible in a good number of cases.

Live in Hartlepool with a job near the metro centre? Live north of the river tees and have a job in Teesside park?

You don't have to do much before you're looking having problems.

Getting around town or into a town from the outskirts of it no problem though, but a surprising amount of people don't work so close to their homes anymore.

Vodkashok said...

But I think thats the point the environmentalists would make - you shouldn't be commuting back and forth to Newcastle for work and gaming. You should be staying close to home. The assumption we make is that we have a divine right to travel wherever we want, whenever we want. That is what might need to be challenged.

Neil

Anonymous said...

Then the environmentalists are talking rubbish. That's pretty much equivalent to saying we go back to the horse and cart and only meet people phyiscally in the same village.

I can agree people should use the public transport in an urban area if they have one. Hell, if I was living and working in Melbourne the chances are I'd not use a car all week!

But saying I can't take a job or see friends in places I can't take public transport to is nuts. They can of course, make good public transport available, but then that's the crux isn't it.

Such an strategy, mass transport systems appearing aside, would have other problems other than the environment.

redben said...

If it came down to a choice between global cimatic catastrophe leading to ecomonic collapse or restrincting yourself to short journies which would you choose?

It's not my intention to be alarmist, just to clearly set the stakes.

Anonymous said...

Well, if those are the choices the decision is obvious.

At the same time I think that is largely facetious since it is predicted the big rollover, when the demand for oil outstrips demand, is destined to happen in our life time.

I believe predictions are somewhere between 2003-2010. So this would mean alternatives would have to be found pretty soon anyway, and the chances if they are not the world will have a bigger problem than the environment as geopolotics deal with that issue.

It's also a bit mad, as we could go back to 'travelling a lot less' on a personal level, but it's not going to make that much difference as third world countries enter first and second world development and they want to make all the mistakes we want to. It can be argued they should be allowed to from a certain perspective, as we did it? But that I suspect that will outstrip anything we can save by people giving up their gaming in Newcastle. Still that shouldn't mean we don't do it where we can.

At the same time, you're not going to manage to restrict business travel even if you manage to get people to restrict personal travel (which is good if it works, I'm not against public transport, etc). You're not going to get it restricted because no country will put itself at risk by making themselves significantly less competitive by travel being less convenient both in terms of the workforce and goods.

As a result, what you actually come down to is the only thing that is going to solve the problem is a lot of what the leftist people rail against: the market economy and business.

They may be slow, and only do things there is a profit in, and while ideas may come from virgin births and altruistic ideas, it is their success on the market economy that will drive change.

In short, we need new ways, and only when the backs against the wall, it becomes a 'unique selling point' or makes people money, will change happen.

We can trim around the edges by restricting travel, but it's profitable alternatives (under whatever criteria) that will drive it.

Luckily, in ironic way, business is being forced to luck at alternives, green is becoming a selling point and arguments can be made green across the business is profitable. It's what is key.

Anonymous said...

Well, if those are the choices the decision is obvious.

At the same time I think that is largely facetious since it is predicted the big rollover, when the demand for oil outstrips demand, is destined to happen in our life time.

I believe predictions are somewhere between 2003-2010. So this would mean alternatives would have to be found pretty soon anyway, and the chances if they are not the world will have a bigger problem than the environment as geopolotics deal with that issue.

It's also a bit mad, as we could go back to 'travelling a lot less' on a personal level, but it's not going to make that much difference as third world countries enter first and second world development and they want to make all the mistakes we want to. It can be argued they should be allowed to from a certain perspective, as we did it? But that I suspect that will outstrip anything we can save by people giving up their gaming in Newcastle. Still that shouldn't mean we don't do it where we can.

At the same time, you're not going to manage to restrict business travel even if you manage to get people to restrict personal travel (which is good if it works, I'm not against public transport, etc). You're not going to get it restricted because no country will put itself at risk by making themselves significantly less competitive by travel being less convenient both in terms of the workforce and goods.

As a result, what you actually come down to is the only thing that is going to solve the problem is a lot of what the leftist people rail against: the market economy and business.

They may be slow, and only do things there is a profit in, and while ideas may come from virgin births and altruistic ideas, it is their success on the market economy that will drive change.

In short, we need new ways, and only when the backs against the wall, it becomes a 'unique selling point' or makes people money, will change happen.

We can trim around the edges by restricting travel, but it's profitable alternatives (under whatever criteria) that will drive it.

Luckily, in ironic way, business is being forced to luck at alternives, green is becoming a selling point and arguments can be made green across the business is profitable. It's what is key.

Anonymous said...

Not sure how the double post happened.

A very serious discussion from a largely frivolous blog entry though! :)

redben said...

We've reached a point where only the most extreme sceptics deny that climate change is an issue, even the current US administration has changed its tune on climate change in the last year.

The question now is just to the degree. No-one can be sure right now what that degree will be but one thing we do know is that we cannot bargain with the environment.

If it is to be to a catastrophic degree we cannot sit the enviroment down at the discussion table and inform it that it is pointless us compromising as China will still keep doing it and, hey, we love our cheap package holidays to Spain too much so can you just kindly take your climate change somewhere else.

This is the crux of the issue, climate change is a real threat with potentially disastrous consequences. Unless a global strategy is formualted, agreed on and implemented then we run a serious risk of these consequences coming to pass.

Now, are you honeslty trying to say that if this country (or whatever country you are in anonymous) decided to try and enforce laws that restricted the use of cars and restricted your mobility as they were convinced that they were a significant contributer to the end of the world as we know it, that you would both disagree and refuse to comply on the grounds that you think its a futile gesture because everyone else is still doing it?

Anonymous said...

On the 2003-2010 issue. Those where indeed the predictions, rather alarmist predictions, leveled 20-30 years ago.

We are no-where near running out of oil though. Current oil capacity and reserves means that Oil may, *may*, be running out by the time we all die, if and this is a big if, the protected lands of such places of Alaska etc aren't used... Fat chance.

Personally I like the Russian attitude to climate change. Asked what they thought about it, over 50% of Russian people thought global warming could be considered a good thing. Indeed with Mr Putin recent claiming of the melting arctic shipping lanes and arctic land shelf for potential oil drilling etc at least someone is seeing a benefit.

My problem with all these environmentalists though is is Really, really doesn't mean shit if we in the UK change our habits. In the scope of things, given the huge outputs of the USA and the growing amount that China and the developing world are polluting, we are just a minor, minor fraction.

Some people at this point will throw their arms up and say; every little helps! No. No. No. It doesn't. Unless we have a world consensus, the UK could go completely green and stop all CO2 pollution etc, emissions and it *really* wouldn't mean shit. It would be meaningless.

The growing economy of India alone will out pollute us in the next 5 years and create double our pollution in 8 at current growth rates. A person saving a few Tescos bags in the UK is meaningless in the scheme of things.

This is a global problem which needs a global strategy and will never, ever, get one in our lifetime as the short term selfish goals of individuals means that no consensus will ever, ever be reached. No Chinese government, Indian, or indeed USA government is ever really going to do more than a bit of talking and hand wringing in our lifetimes. Short term goals of profit and wealth are far too prominent, and I'm sorry, but some cry baby environmentalists aren't gonna get in the way of big bucks capitalism.

D.

Anonymous said...

http://en.wikipedia.org/wiki/Oil_supply

redben said...
This comment has been removed by the author.
redben said...

'Personally I like the Russian attitude to climate change. Asked what they thought about it, over 50% of Russian people thought global warming could be considered a good thing'

Wow, will the last civilisation thank the Russians and Dave before you turn out the light.

Again, we're back to the bargaining thing. China, India, Russia and USA cannot bargain with the environment, if they choose not to change and if only half of the worst prefictions for climate change come to pass then their reign as major world ecomonies will be very short lived. There is already a major sea change in the attitude of the US electorate towards climate change, as witnessed in last years Senatorial elections.

If the Presidential elections were to be held today and Al Gore were to stand then he would win purely on the basis of an alarmist documentary he made on climate change.

In as short a period as a decade you will see a massive shift in attitude by the populations of the western world. China, India and Russia won't follow immediately but the combination of carbon credits, which will become and economy in and of itself and will allow some third world nations to sustain themselves almost purely on the sale of them, and massive pressure from already developed nations will see them forced to make some sacrifices whilst still being able to maintain economic growth.

In fact, the only problem I forsee is people like you and 50% of Russia you motherfuckers ;)

Anonymous said...

I love you too ;-)

I see the points of your arguements Ben, and I honestly wish I could agree as of course I'd like the world to be able to gather around, look at the facts and realise that heading to mutual destruction was a little stupid...

But..

I don't see the world that way.

I see the world governed by groups with huge vested interesteds in maintaining the status quo. I see a group of consumers who like to think about saving the environment, but when you stick on green taxes, complain heavily about the unfairness of it all. I see international financial markets and companies which hold shareholder wealth far higher than environmental concerns.

In other words, I'm a realist (though you might say pessimist), and I see no hope for the environment, and I see a lot of words regarding reducing environmental damage, but I think a lot of this is a smokescreen because of the power of those vested interests.

I like what you're saying Ben, and I wish I could bring myself to agree. But I see a world filled with powerful people who simply mouth the words of change without meaning.

D.

redben said...

I would most definitely put you on the pessimistic side of realist.

Anonymous said...

I'm not sure I see it as bad as Dave does. Whether the changes happen in time is another matter, but that's a different argument.

The key thing remains green solutions being economically viable, that has to hit critical mass via one route or another for it to work. Or it has to be convenient.

I recycle. I use energy saving bulbs. We are on metered water. These things I do because they are convenient and / or save me money.

While there is a lot of 'powerful people with a vested interest', a lot of these are based around money. If enough people start seeking out and looking for green products then someone wanting to be rich or a company wantint to survive will provide them.

There are even signs, and I'm not saying critical mass signs, but litlte signs that in some ways the 'third world upgraders' may use green technologies more, as businesses adopt solar technology and the like since they didn't begin their life 'tied to oil as power'. I'm sure it's a minority, but it's a beginning.

I know for sure that businesses are making big money in the north east based on projects surrounding green technologies, such as wind farms and fuels based on bio-fuels.

I'm not saying it's 'count us as saved yet', but slight movements have begun, and corporations will change significantly to maintain their power base when consumers change and markets change (just look at Kodak)- the key is it happening in time:)

Ian