Shell etc

[Dis86]

But if costs are higher why is profit higher? Profit is not cost based? End price could be lower than they are now if profits were lower even if costs are higher.

Because they've increased their margins. That and when the government cut duty, they didn't cut prices.

 

[sparkymark75]

What about all the investments into Hydrogen they are making? The money has to come from someplace.

Whilst massive increase in profits at the expensive of the population is obtuse all the money isn't flowing into the back pockets of the already rich.

Probably investing in the dirty Hydrogen produced at their refineries.

The whole UK energy sector needs reformed. Windfall taxes are just soundbites and short term. Like the government going on about all these wind farms and renewable sources of energy that are being built. However they are being built by private companies who will sell the energy on the open market and we will have to pay the going rate for it.

 

[413x]

But if costs are higher why is profit higher? Profit is not cost based? End price could be lower than they are now if profits were lower even if costs are higher.

Costs will have gone up say 1 percent (arbitrary value) but profit margin much more.

If something is in demand and 2 people are wanting it. One might bid 2 pounds. The other 3.. The first 4 etc etc.

That product still costs 1 pound to make. But now your making 3 pounds rather than 1.

 

[Mrwong]

Probably investing in the dirty Hydrogen produced at their refineries.

The whole UK energy sector needs reformed. Windfall taxes are just soundbites and short term. Like the government going on about all these wind farms and renewable sources of energy that are being built. However they are being built by private companies who will sell the energy on the open market and we will have to pay the going rate for it.

You are also paying for it with your taxes.
Direct and Indirect funding them, but were is the cheaper energy promised.

 

[Chuk_Chuk]

Interersting video by Wendover on the issue. One of the points brought up is that the oil companies are now looking to profit now rather than reinvesting into new locations. Which would partly explain the profits they are pulling.

 

[SPG]

Inflation is a con and the economy is essentially one large pyramid scheme.

This.

 

[Delta3D]

This "soak the rich" narrative is just ignorance. Do you have a pension pot building up ? Do you have investments in tracker funds ? If so, I've got news for you - you're one of the rich. These are the major shareholders of shell, BP etc: not some bunch of Illuminati sitting in their hollowed out volcanos stroking white cats and feeding poor people to their pet sharks.

A (very highly) simplified view of their business is that they make a percentage profit off the oil price when its over a baseline price. Its not that long ago the oil price was below what the majors could make a profit on, but nobody was rushing to bail them out. Now that the oil price is high of course the money is coming in and the big increase (off a low base !) is there.

That money will be used for:
- Corporation tax
- Paying shareholders (those pension funds which you and I are part of)
- Repaying debt
- Investment to keep the money coming in. Oil fields need maintenance and re-supply. You don't just drill an hole and you're done ...

If they were truly raking it in, their share prices would be higher. BP are currently ~£4.25 a share. If you look over the last 10 years or so, that's still low - they spent more time between £5 and £6 per share. Shell are doing better (finally !), but not at their highs.

As someone with decent involvement in the fuel/oils industry, this is the best explanation.