Shell oil artificially driving up gas prices

Discussion in 'Current Events' started by DKSuddeth, Aug 11, 2004.

  1. DKSuddeth
    Offline

    DKSuddeth Senior Member

    Joined:
    Oct 20, 2003
    Messages:
    5,175
    Thanks Received:
    61
    Trophy Points:
    48
    Location:
    North Texas
    Ratings:
    +62
    They would rather destroy a very profitable refinery instead of sell it to

    A) drive up fuel prices

    B) avoid competition.

    US Newswire

    The Foundation for Taxpayer and Consumer Rights today released internal Shell documents showing the oil refiner is set to close and demolish its Bakersfield refinery despite the fact the site had the biggest refinery margins, or profits per gallon, of any Shell refinery in the nation as of yesterday.

    Shell had claimed it was not economically viable to keep the refinery open and has refused to put it up for sale. Bakersfield supplies 2 percent of the state's gasoline and only 13 refineries feed California's tight gasoline supply (down from 37 in 1983).

    An April 5th internal Shell document released today by FTCR shows that Bakersfield's refining margin at $23.01 per barrel, or about 55 cents profit per gallon, topped all of Shell's refineries in the nation. That means, for example, that margins are 36 cents per gallon higher in Bakersfield than in Port Arthur, Texas. The internal document comments under the category of refinery margins "Wow."

    "Only an oil company that wants to short the market and artificially drive up the price of gasoline would demolish a highly profitable refinery rather than sell it," said Jamie Court, president of FTCR and author of the book Corporateering (Tarcher/Putnam). " Shell has deceived the public about Bakersfield and must be forced to keep this refinery open or sell it to a competitor. This evidence should also spur a national moratorium on all further domestic refinery closures."
     
  2. 5stringJeff
    Offline

    5stringJeff Senior Member

    Joined:
    Sep 15, 2003
    Messages:
    9,990
    Thanks Received:
    536
    Trophy Points:
    48
    Location:
    Puyallup, WA
    Ratings:
    +540
    Weird... not the way I would run a business.
     
  3. HGROKIT
    Offline

    HGROKIT Active Member

    Joined:
    May 22, 2004
    Messages:
    1,398
    Thanks Received:
    19
    Trophy Points:
    36
    Location:
    Federal Way WA, USA
    Ratings:
    +19
    Gee - maybe our goverment should step in an tell them they can't do that! [/sarcasm]
     
  4. freeandfun1
    Offline

    freeandfun1 VIP Member

    Joined:
    Feb 14, 2004
    Messages:
    6,201
    Thanks Received:
    295
    Trophy Points:
    83
    Ratings:
    +296
    I don't know anything about this situation, but I can tell you this. It does not make sense and therefore, I believe there must be much more to the story.

    What good would it do for shell oil to drive up prices? Gross revenues are NOT important, but profit is. Why would they drive up prices only to make lower margins? Makes no sense at all. Futhermore, limiting the availability of gasoline will do nothing but speed up the development of alternative power sources that would put shell out of business. I bet there is a lot more to this story than the author is telling. He must have an agenda.
     
  5. HGROKIT
    Offline

    HGROKIT Active Member

    Joined:
    May 22, 2004
    Messages:
    1,398
    Thanks Received:
    19
    Trophy Points:
    36
    Location:
    Federal Way WA, USA
    Ratings:
    +19
    I agree, hence the sarcasm of the post.
     
  6. 007
    Offline

    007 Charter Member Supporting Member

    Joined:
    May 8, 2004
    Messages:
    38,328
    Thanks Received:
    7,868
    Trophy Points:
    1,130
    Ratings:
    +11,946
    Sure he does. He's a liberal, and this fiasco will all turn out to be President Bush's fault... :rolleyes:
     
  7. Annie
    Offline

    Annie Diamond Member

    Joined:
    Nov 22, 2003
    Messages:
    50,847
    Thanks Received:
    4,644
    Trophy Points:
    1,790
    Ratings:
    +4,770
    Which 'he'? I'm lost!
     
  8. DKSuddeth
    Offline

    DKSuddeth Senior Member

    Joined:
    Oct 20, 2003
    Messages:
    5,175
    Thanks Received:
    61
    Trophy Points:
    48
    Location:
    North Texas
    Ratings:
    +62
    somebody show the advantage that shell oil would have in demolishing the most profitable of their refineries. If you can do that and theorize what the 'liberal journalists' agenda is, I'd be interested.
     
  9. freeandfun1
    Offline

    freeandfun1 VIP Member

    Joined:
    Feb 14, 2004
    Messages:
    6,201
    Thanks Received:
    295
    Trophy Points:
    83
    Ratings:
    +296
    we don't know the details. why was it the most profitable? did they have big write offs that allowed them to show a larger profit than normal that year? There are LOTS of reasons why they may have been profitable but no longer are. Have taxes gone up in the area? What about payroll taxes. I know that before the recall, workman's comp in California went up so high that HUNDREDS of companies moved from Cali to Vegas last year. Right now if you go to bizbuysell.com you will find LOTS of machine shops for sale in Cali now. Why? Cuz last year workman's comp went up so much, they can't make a profit. They are using cashflow numbers from 1 and two years ago as the bases of their multiples, but if you do research, you will find that their insurance, taxes and others have gone up so much that those numbers are no longer attainable.

    Maybe that is why just one year later it is no longer profitable. I would think that refineries would have high workman's comp insurance rates.
     
  10. 007
    Offline

    007 Charter Member Supporting Member

    Joined:
    May 8, 2004
    Messages:
    38,328
    Thanks Received:
    7,868
    Trophy Points:
    1,130
    Ratings:
    +11,946

    The author of the article.
     

Share This Page