Paying more for your petrol?

Question

Here's why...

BP reports massive profits Tue 26 October, 2004

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'LONDON (Reuters) - BP, the world's second largest oil company, has reported bumper third-quarter profits thanks to high oil prices, but its higher capital expenditure plans has raised some concerns about the size of future share buybacks.

BP said on Tuesday that pro forma net profits in the three months to September

30 rose 43 percent to $3.937 billion (2.5 billion pounds), including exceptional charges related to environmental clean-up costs and the write-off of a production platform destroyed by fire.

Excluding the exceptional items, which had been flagged to the market earlier this month, net profits rose 46 percent to a record $4.338 billion. This compares with the average forecast of $4.18 billion given in a Reuters poll of 13 analysts.'

Sergeant Bilko · Accepted Answer

Out of the 85p a litre for unleaded, approx 65p is excise duty and other tax.

The remaining 20p covers cost of the oil, refining and profit.

As Gordon Brown takes over 75% of the money we pay at the pumps, it is just ignorant to blame BP for the high cost of petrol.

The fault lies with wasteful New labour.

CliveM · Answer

And you are ignoring the other taxes BP would pay, such as VAT, corportation tax, Employers Contributions, Stamp Duty, Capital gains etc etc

Whilst the figures looks huge in monetary terms, what you also need to bear in mind is the sheer size of BP. BP has a capitalisation of 115.1 million the next biggest company is HSBC at 98.1 million, Vodapfone at 89.9 million then GlaxoSmithkline at 66.2 million. BP is therefore something like 5.5 times bigger than Tesco, 14 times bigger than Marks & Spencer or over 50 times bigger than British Airways.

If this is considered BP make a profit of 13603 million on a capitalisation of 115087 million (11.8% of capitalisation), whilst say Sainsburys made a profit of 610 Million on a capitalisation of 4276 million (or 14.2% pf capitalisation) or British Airways 230 million of capitalisation of 2233 million (10.3%)

So is BP really making excessive profits compared to other companies?

Tim · Answer

"CliveM" wrote I cannot believe that BA have a market cap. of only around 2million !!

CliveM · Answer

Whoops. Ive changed the comma to a decimal point! - comparisson still ok tho.

BP. 115,087 million HSBC 98,159 million Vodaphone 89,911 million Tesco 22,091 million Marks and Spencer 8,178 million British Airways 2,233 million.

Terry Harper · Answer

For million, read billion.

Tim · Answer

"Terry Harper" wrote I know  ;-) Somehow, Clive managed to make the same mistake *four* times!!!

Britannia2002 · Answer

towards the end of the third quarter  my local BP station increased its unleaded prices by 5p per litre I don't think New Labour can be blamed for that

Marcus Collie · Answer

OK clever then - go to the franchise owner and complain - they set the  actual pump price, not BP! Donkey

Sergeant Bilko · Answer

Yes you can - the high oil price can be blamed, partly, on the illegal war in Iraq. Which New labour backed.

britannia2002 · Answer

I did he blamed BP too muttered something about having to pass on their exorbitant costs to the motorist me?...I'm off to ASDA down the road it's 3p cheaper there!  ;)

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