Oil Price Watch

[uls]

But we know that the ratio of overhead to revenue for smaller players would be bigger because they don't have the advantage of economies of scale

^^ yep, my point exactly

But it's really just capitalism at work, with us seeing market dominance in action.

^^ yep, my point exactly

[anonemus]

* uls / digitalron --

thanks for the info, especially the hard data. It confirmed my initial belief that the local market is controlled by the Big 3, and that the Deregulation Law as hoped by most consumers that it will break the market hold of the Big 3 is a failure.

A quick research shows that with Shell/Chevron/Petron controlling around 80% of the local market, there is oligopoly here, and with distinct signs of collusion.

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists)

Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may employ restrictive trade practices (collusion, market sharing etc.) to raise prices and restrict production in much the same way as a monopoly. Where there is a formal agreement for such collusion, this is known as a cartel. A primary example of such a cartel is OPEC which has a profound influence on the international price of oil.

Firms often collude in an attempt to stabilize unstable markets, so as to reduce the risks inherent in these markets for investment and product development.There are legal restrictions on such collusion in most countries. There does not have to be a formal agreement for collusion to take place (although for the act to be illegal there must be actual communication between companies)–for example, in some industries there may be an acknowledged market leader which informally sets prices to which other producers respond, known as price leadership.

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

Ordinary consumers and countries that are addicted to oil are at the mercy of OPEC. Can't really do anything about this situation for now, except to mitigate its impact.

I don't like Villar, but this time his proposals make sense:

Slow response to crisis criticized

By ROLLY T. CARANDANG
March 9, 2011, 7:41pm


MANILA, Philippines — If the government is to lessen the impact of the continuing oil price hikes, the government should adopt drastic measures, like pushing for a comprehensive oil sector reform agenda and a review of Oil Deregulation Law.


This was the assessment of Sen. Manny Villar as he criticized the government for its very slow response to the present crisis engulfing the nation, including the repatriation of overseas Filipino workers (OFWs) affected by the political unrest in Libya and other states in the Middle East.
Villar said with world oil prices expected to further soar as the unrest worsens in the Middle East and North Africa, the government could adopt measures to mitigate or cushion the impact of skyrocketing pump prices.
“We just can’t relax and bear the oil price hikes, there must a mitigating middle ground wherein our collective anxiety would be appeased by government assurance that the oil companies are not screwing us big time,” he stressed.


Villar said the oil sector reform agenda should be able to address the concerns raised against the players of the downstream oil industry still controlled by the so-called “Big 3” oil companies among them the alleged overprice, low quality of oil products or tinkering with quality of supply, upward rounding off of increases and downward rounding off of decreases, weekly adjustment instead of the 30-day period, and no transparency in books of accounts.


The senator said while the helpless public may surrender to the prospect of high oil price regime, “there should be at least assurance that the petroleum products that they are buying are not of poor quality and not a fruit of shrewd business practice."


Villar, chair of the Senate committe on trade and commerce, disclosed receiving reports that regular unleaded gasoline are passed off as a high-octane variant that costs higher and pads up the profits of oil firms.

http://www.mb.com.ph/articles/308388...sis-criticized

[uls]

tuwing tumataas ang presyo ng langis, lumalabas ang mga topic re oil cartel, sabwatan, etc

paulit ulit nalang. this is getting really really old

OIL COMPANIES ARE NOT RESPONSIBLE FOR SKYROCKETTING CRUDE OIL PRICES

crude oil prices are NOT determined by oil companies

oil prices are determined by participants in the commodities market

market participants are commercial traders and non-commercial traders or speculators

commercial traders are the ones who take physical delivery of the commodities

speculators make money from buying and selling contracts. they don't take physical delivery

in the global commodities markets, non-commercial traders or speculators outnumber commercial traders

recently speculators pumped billions of dollars into the oil market driving up the price of oil

oil refiners buy crude oil. that's their raw material

when the price of the crude oil rises, naturally the cost of producing gasoline, diesel, kerosene also rises. so they have to raise the prices of their products

tumaas ang puhunan nila so kailangan nila itaas ang presyo ng produkto nila

mahirap ba intindihin yun?!

oligopoly, cartel, sabwatan, whatever

why don't we hear that talk when gas is P35 per liter??!

[tidus1203]

Oo nga eh pag mura gas walang cartel although yung pricing nila pare pareho pa din pero pag tumaas cartel na kaagad... Idiot left wing communists!

Isa lang payo ko sa kanila. MAKE MORE MONEY THEN! Other rich people who make money in buying and selling oil don't give a crap if you now have to take a commute and can no longer use your car. Survival of the fittest!

[CVT]

Sadly, it is bro.

But, everyone needs a strong middle class.

Else, everyone loses....

12.5K:soccer:

[badsekktor]

Sadly, it is bro.

But, everyone needs a strong middle class.

Else, everyone loses....

12.5K:soccer:

I agree. We dont want chaos in our streets... better to have small profits than taking in huge losses from civil unrest

[safeorigin]

ah well...

2 of my uncles each have gas stations

1 is petron and 1 is total(used to be caltex) and both are from different towns

they watch the news EVERY night and anticipate price changes and price their products accordingly since they have to worry if they'll be able to purchase oil at all. now if they don't, they won't even be able to send a tanker

it's also no secret that they sometimes get oil from the same supplier for the right circumstances(eg. supply). so it's no coincidence that they arrive more or less at the same price

is this a cartel? No, even if they happen to be brothers

[uls]

ah well...

2 of my uncles each have gas stations

1 is petron and 1 is total(used to be caltex) and both are from different towns

they watch the news EVERY night and anticipate price changes and price their products accordingly since they have to worry if they'll be able to purchase oil at all. now if they don't, they won't even be able to send a tanker

it's also no secret that they sometimes get oil from the same supplier for the right circumstances(eg. supply). so it's no coincidence that they arrive more or less at the same price

is this a cartel? No, even if they happen to be brothers

o ayan. read that Mr. Collusion Sabwatan

hilig kasi sa conspiracy theories

[anonemus]

o ayan. read that Mr. Collusion Sabwatan

Is this a taunt?

[safeorigin]

Is this a taunt?

oh you're very mistaken

I've learned my lesson that way

[uls]

safeorigin:

they watch the news EVERY night and anticipate price changes and price their products accordingly since they have to worry if they'll be able to purchase oil at all. now if they don't, they won't even be able to send a tanker

me:

your cost is P100 and you're selling at P110

but your supplier raised his price to P110. if you dont raise your selling price to P120, and you buy new stock at P110, your P10 profit vanished

to maintain your P10 profit, you have to raise your selling price to P120 even if you bought the old stock at P100 so when you buy the new stock at P110, you still maintain your P10 profit

see?

is that clear?!

if safeorigin's uncles didn't raise prices on the old stock, they won't make enough money to pay for the new stock which is more expensive

[safeorigin]

if safeorigin's uncles didn't raise prices on the old stock, they won't make enough money to pay for the new stock which is more expensive

let alone cover the cost of maintaining a tanker... which is a b**** btw

[uls]

^^^ and that. and other costs that go into keeping a gas station running profitably

[anonemus]

tuwing tumataas ang presyo ng langis, lumalabas ang mga topic re oil cartel, sabwatan, etc

paulit ulit nalang. this is getting really really old

OIL COMPANIES ARE NOT RESPONSIBLE FOR SKYROCKETTING CRUDE OIL PRICES

crude oil prices are NOT determined by oil companies

oil prices are determined by participants in the commodities market

market participants are commercial traders and non-commercial traders or speculators

commercial traders are the ones who take physical delivery of the commodities

speculators make money from buying and selling contracts. they don't take physical delivery

in the global commodities markets, non-commercial traders or speculators outnumber commercial traders

recently speculators pumped billions of dollars into the oil market driving up the price of oil

oil refiners buy crude oil. that's their raw material

when the price of the crude oil rises, naturally the cost of producing gasoline, diesel, kerosene also rises. so they have to raise the prices of their products

tumaas ang puhunan nila so kailangan nila itaas ang presyo ng produkto nila

mahirap ba intindihin yun?!

oligopoly, cartel, sabwatan, whatever

why don't we hear that talk when gas is P35 per liter??!

The issue is getting old precisely because the issue is old. Gets mo? Parang tuwing eleksyon dito sa Pinas ang isyu na parating bumabandera is corruption. Why do you think this is? Because there is corruption since elections started in the country. Kung walang corruption, walang issue.

Same case when oil prices shoot up. It becomes a public issue again and old unresolved issues surface again. Simple logic.

Matanong nga kita: do you believe that OPEC is a cartel or not?

Now can you pick up a dictionary and look up the word oligopoly and tell me honestly that Shell/Chevron/Petron's dominance in the local market is anything but?

What your explanation of how the commodities market work only goes to show that OIL COMPANIES AND THE COMMODITIES MARKET ARE RESPONSIBLE FOR SKYROCKETTING CRUDE OIL PRICES.

ah well...

2 of my uncles each have gas stations

1 is petron and 1 is total(used to be caltex) and both are from different towns

they watch the news EVERY night and anticipate price changes and price their products accordingly since they have to worry if they'll be able to purchase oil at all. now if they don't, they won't even be able to send a tanker

it's also no secret that they sometimes get oil from the same supplier for the right circumstances(eg. supply). so it's no coincidence that they arrive more or less at the same price

is this a cartel? No, even if they happen to be brothers

Thanks for this anectodal and helpful contribution, safeorigin. But it doesn't really prove if there is collusion or not as this is a transaction at the gas station level. Unless your uncles are the ones buying and refining crude oil, and then distributing and retailing gas and diesel.

oh you're very mistaken

I've learned my lesson that way

Huh?

safeorigin:


me:


see?

is that clear?!

if safeorigin's uncles didn't raise prices on the old stock, they won't make enough money to pay for the new stock which is more expensive

See my retort above.

What's with the "Mr Collusion Sabwatan" comment? You want to make this discussion personal?

[safeorigin]

Thanks for this anectodal and helpful contribution, safeorigin.

it's not merely anecdotal. anybody who owns a business would do the same

But it doesn't really prove if there is collusion or not as this is a transaction at the gas station level.

it does show that prices would be more or less the same if they purchased on the same supplier especially if supply is low (if they don't they have nothing to sell and would be out of business) like what happened before

so myth busted

Unless your uncles are the ones buying and refining crude oil, and then distributing and retailing gas and diesel.

same can be said for refiners since they also need to raise their prices in order to purchase crude oil

so myth busted

Same case when oil prices shoot up. It becomes a public issue again and old unresolved issues surface again. Simple logic.

oil doesn't magically pop out of nowhere. it is a finite resource. the world market is VERY REFLEXIVE. stuff becomes more expensive because of UNCERTAINTY and FEAR. price will naturally go down if the demand is too low.

no amount of regulation can magically create oil to make it dead cheap as air

it's like regulating explosive vests to reduce bombing attempts

[ame]www.youtube.com/watch?v=e0Zj5XxK9ec[/ame]

[Monseratto]

Oil companies operate all over the world, not only in the Philippines. Compared to other countries, the Philippine market is puny.

[Monseratto]

Yet do you hear other countries complain as much as we do? Dito lang ata hinaharass ang mga oil companies, to the point na pinaparade sa senate in aid of legislation...

[hondaboot]

basahin nyo na lang kase 'to kaysa mag-away-away kayo, what's happening right now is speculation. people like *uls and *tidus like this coz it somehow disturbs the financial markets

http://money.howstuffworks.com/oil-s...-gas-price.htm

admitted na nga yun 2008 eh.


the reason why oil is being speculated today, kasi walang cashflow ngaun, nobody is buying/purchasing/spending. so the investors with so many money babalek ulet dyan sa oil speculation

i don't really follow that gulo in the Mid East unless it's convenient timing as escape goat.

now instead of feeling bad or blaming these greedy people, tignan nyo muna ang buhay nyo, if you spend too much or you have high overhead, then talagang apektado ka nyan. 2008 is a lesson in itself, if you continued your ways, paktay ka na talaga ngaun coz after the speculation, we'll be expecting P200 two piece chicken meal and P1000 per head fine dining dinner experience ...


nakakatawa talaga ang Pilipinas eh, we have so much gas guzzling SUVs and Vans here for just a group of island nation while the Europeans who are located in a continent but are wise and humble enough to drive mini-diesel cars. add the disease that is the PUV and wala na ubos na pera mo sa daily energy requirement pa lang


--

re: speculators: it can be the cartels themselves masquerading as speculators.

[br733]

i agree with what uls has to say.

anyone who works an an enterprise that uses fuel products can attest to whether the oil industry in its present form is a free market.

[uls]

The issue is getting old precisely because the issue is old. Gets mo? Parang tuwing eleksyon dito sa Pinas ang isyu na parating bumabandera is corruption. Why do you think this is? Because there is corruption since elections started in the country. Kung walang corruption, walang issue.

Same case when oil prices shoot up. It becomes a public issue again and old unresolved issues surface again. Simple logic.

only people who believe in "collusion" and "cartel" and "sabwatan" bring that up when fuel prices rise

leftists, PUJ organizations, populist politicians, some newspaper columnists, conspiracy theorists, environmentalists