1.5 cents a litre profit for Caltex

[xelasnave]

In answer to Alan Evans (NRMA) attack on petrol companies we get a nice reply from Caltex that they only make 1.5 cents a litre...mmmm... who buys that?

Do they have to pay the executives out of that 1.5 cents one must wonder... or is it only 1.5 cents because of their accounting system minimising profit so as to make such claims.

I would like to hear how such figures are arrived at before we start to think that the poor petrol companies are basically providing us with fuel on a charitable basis.

If they make so little on each litre and the margin is so narrow one must also wonder why their share price is so strong after all that is a very dubious margin if a fact.

AND how do we fit the fact that each additional cent in the price of fuel equates to additional revenue of some $200,000,000-00 ( this is heresay and open for correction)..it is a pity I am so poor on math but at a glance it does not add up for me.

We can only conclude they are not in business to make money but there simply to help the motorists ... I wonder how much the Government actually makes..probably only a cent or two also if they use the same accounting systems as Caltex.

So will Caltex provide a basis for their horrible under paid possition or are we simply to take their word that they make only 1.5 cents a litre.

alex

[avandonk]

Alex I am sure that is the 'profit' on the final retail sale. Like all vertically integrated companies each subsidiary sells to the next and they claim all sorts of 'costs' to offset tax on profits. It is one very large shell game that all the multinationals play.

The same thing is done with mineral exports the material is sold to an overseas subsidiary at a ridiculously low markup. The large profit is then realized in some offshore tax haven.

If you do the sums we are paying them to take our minerals away.

If this is not true why do they have such complicated corporate structures that are truly labarinthine.

Bert

[xelasnave]

Yes Bert I have no doubt about anything you have observed... It is a shame that folk just hear the news and go on thinking they are not being made victims and that we get our fuel at only a fraction above the cost of production.

I hope this attempt by Caltex to make out they are so charitable comes back and hits them in the face...

I have been waiting for Mr Alan Evans to make a similar observation as a counter reply I hope he does not buy it and can tug at the threads of their lie to expose the truth.

If Caltex can put him to rest with such a reply makes me think he can not think too hard about what is before him...If he is serious about his statement that he is holding the petrol companies accountable one would think he could point out the obvious and perhaps expose the nonsence of such a comment by Caltex.

alex

[xelasnave]

AND I wonder who it was who lobbied sucessfully for the introduction of parity pricing for petrol...I know it was the greedy motorists looking to save themselves forcing the Government to take action they were so relucant to take..we all know they only tax us for our own good..
alex

[SteveB]

A mate of mine is fairly high up in Caltex so when we get together I try not to raise petrol prices over dinner. At xmas I asked him how come deisel is now dearer than petrol when it used to be half the price... his answer was very simple... supply and demand! cost figured very little into it. I can only assume that the same applies to petrol.

[Zuts]

Hi,

Back when GM was in trouble they actually made millions of cars a year selling for tens of billions of dollars and still made a loss. How you can make a loss on a 30,000 USD car is beyond me but they managed it. Similarly Coles manages a few cents per dollar averaged over all products on what they sell in the supermarkets.

So it's not too farfetched to imagine that companies refining the oil in OZ with OZ wages and taxes may not in fact make any money at all on the fuel they sell in Australia.

Paul

[Miaplacidus (Brian)]

Originally Posted by xelasnave

If they make so little on each litre and the margin is so narrow one must also wonder why their share price is so strong...

alex

Alex, have you seen Caltex's share price lately? It is down a lot further than the rest of the market.

Caltex uses an unusual metric for calculating company profit, replacement cost of sales operating profit (RCOP), and it now compensates for exchange rate fluctuations in these calculations. Caltex has been an "avoid" for six months.

BTW, the increased demand for diesel is coming from our miners, who are still experiencing a boom.

Cheers,

Brian.

[cahullian]

The Caltex down the road from me seems to be doing ok as the owner is driving the most expensive car in the area and lives in one of the nicest houses I have seen. So it must be the franchise owners who are stealing all the profit.

Gazz

[GTB_an_Owl (Geoff)]

i think you will find it is the servo operator that is making the 1.5 cents a litre

geoff

[acropolite (Phil)]

Originally Posted by bert

If you do the sums we are paying them to take our minerals away.

In our state we call it corporate welfare, but the formula's the same, we pay them to destroy our beautiful native forests and ecosystems.

[mark3d]

i remember reading that exxon and shell combined make USD$100bn profit per year. i dont have a source but even if thats 50% wrong its a lot of $

[xelasnave]

Originally Posted by Miaplacidus

Alex, have you seen Caltex's share price lately? It is down a lot further than the rest of the market.

Caltex uses an unusual metric for calculating company profit, replacement cost of sales operating profit (RCOP), and it now compensates for exchange rate fluctuations in these calculations. Caltex has been an "avoid" for six months.

BTW, the increased demand for diesel is coming from our miners, who are still experiencing a boom.

Cheers,

Brian.

I notice only what suits me Brian and the story really needed that extention of the imagination.

And Steve hit the nail on the head... it is supply and demand...and the petrol folk understand this fact better than the general public and perhaps apply the principles of the idea better than most... otherwise we would not have a variation of price during the course of a work day week... I used to buy fuel on Tuesdays because that is the day most folk are running short on cash flow..and others are not going anyplace so the price was cheaper on a Tuesday compared to Friday night...
We have Easter coming so have you noticed the news is having reports that petrol will hit $3-00 a litre at some stage in the future..why is that..well my cynical little mind tells me it is just part of the softening up process so folk wont feel so bad paying the real figure the petrol companies already have in mind for Easter...anything will seem better than $3-00 ...

Still all I do by grizzeling is to state the obvious... and in fact it does not worry me... it is just something to throw in for a general chat..a vehicle where some members may have a go in the privacy of a world forum...

Life is a game of poker those with the cash make big bets that can not lose and those without cash make bets that can never win...

Still it would be nice if magic was real and if Governments cared about the little folk.

Paul I know you follow the Gunns thing and although sortta off topic I must ask how many trees will need to be processed and over what time frame to recoupe an initial investment of now $2,000,000,000-00 dollars.... up here a tree sells for about $100 if you are lucky so just on that basis that is 200,000,000,000 trees they need to process on very ruff sums ... I wish I was better at math but it seems a lot of trees will be needed before that mill comes close to breaking even... so I guess we wont need to go to Easter Island to see an island where all the trees were cut down to satisfy the demands of an unreasonable God..in our case is the dollar is the God of unreasonable behaviour... When you mention Easter Island all folk think of is big long sad stone faces ...seems the statues were smarter than the inhabitants... and in Tazzie all we will end up with is long sad faces I fear..

Well I feel better ..try it folks expose what you can not change if for no other reason than letting them know we are not as stupid as they believe us to be..

AND dont you love the now opposition going against neuclear power...why? well how else can they get paid to get out of the way when the current Government caves in to the pressure of a determined lobby that is the NP group...
alex

[Miaplacidus (Brian)]

I have to agree with the sentiment. I read something somewhere recently, to the effect that when you cut down a 500 year old redwood it shows up as a positive number in a country's GDP (for one year!), but no one bothers to put a figure on what it means to lose a 500 year old redwood for all time.

[xelasnave]

I am not a communiist but I really think the market system can only address current economic considerations and as such it is not sound in the long term..what should it be replaced with I have no idea...my job is only to grizzle not be creative..why should I be no one would listern\

alex