rollback!!!

[[archie]]

eh di tong mga to pala e mahihirap ding makaintindi? sana if ever matupad ang malaking rollback eh matuwa rin kayong mga nakakaintindi kung bakit di dapat mag rollback ng biglaan...pesteng rollback to oh.

ASSUMING po yan... if the government can control OPEC and contract buyers then they can implement this BUT the market is very volatile... one day up to $85 another day drops to $65. hindi nila pwede assume lahat.

if the govenment really wants to intervene with the gas prices, subsidize nila anything OVER $70 per barrel. kung mas mababa naman... kumita sila. then for sure stable at 40/l gas natin.

theres one draw back though... who will pick up the slack... sino pa kung hindi tayong mga tax payers.

[actor21]

or tax them on excess profits....

Sir in fairness to Angelo Reyes, though i dont know this guy, e nagbanta sya na tataxan nya ang excess profits ng oil companies here kaya nagbaba ng pabutal butal...i say its still not enough...

[XTO]

ASSUMING po yan... if the government can control OPEC and contract buyers then they can implement this BUT the market is very volatile... one day up to $85 another day drops to $65. hindi nila pwede assume lahat.

if the govenment really wants to intervene with the gas prices, subsidize nila anything OVER $70 per barrel. kung mas mababa naman... kumita sila. then for sure stable at 40/l gas natin.

theres one draw back though... who will pick up the slack... sino pa kung hindi tayong mga tax payers.

i don't see any intention or plans that the gov't wants to subsidize it. wala ako nabasa. besides yes andun na tayo that if that certain delivery was paid at $200 a barrel then naturally they will sell it at over P60 or even P70 a liter - fine... but what if they ordered today at $70 a barrel then on the following month it becomes $100 do you think hindi muna sila magtataas? dun nga sila magaling e.

i'm sure nag iimbak na yang mga yan ngayon hangga't mura. mga tanga sila pag nag antay pa sila ng 2 or 3 months para bumili ulit na palagi nilang sinasabi - kalokohan di sana matagal na silang lugi.

[[archie]]

i don't see any intention or plans tha the gov't wants to subsidize it. wala ako nabasa. besides yes andun na tayo that if that certain delivery was paid at $200 a barrel then naturally they will sell it at over 60 or even $70 a liter - fine... but what if they ordered today at $70 a barrel then on the following month it becomes $100 do you think hindi muna sila magtataas? dun nga sila magaling e.

IF they order today... that WILL come months after sa gas pumps. uubusin muna kung ano ang at hand. so naturally hindi kita epekto kagad. di ba?

also hindi magoorder yan ng month on month kasi mas mahal expense sa shipping pagpatingi-tingi bili.

i'm sure nag iimbak na yang mga yan ngayon hangga't mura. mga tanga sila pag nag antay pa sila ng 2 or 3 months para bumili ulit na palagi nilang sinasabi - kalokohan di sana matagal na silang lugi

so kung hindi sila hintay ng mas matagal... saan nila lalagay yun... kung puno pa majority ng tank nila?

shempre mas ok na bulk buying kasi may perks like less transport cost, less handling cost, less holding cost. kung month on month, baka hindi lang 47/liter ngayon.

[XTO]

We’re talking about big 3 here who has their own refineries ha? have you seen their fuel depots in pandacan? na kayang mag supply ng 50% ng pilipinas? bukod pa yung refineries nila sa Bataan at Batangas.

Do you think di nila kaya mag imbak?

According to a position paper of the "Big Three" (Petron, Caltex and Shell), the depot supplies:
Fifty percent of the country's total demand for fuels, including 1,787 retail stations in Regions 1 to 4, including 459 stations in Metro Manila alone
Seventy percent of the shipping industry's needs nationwide
Ninety percent of lubricant requirements nationwide
Seventy-six percent of all aviation fuel needs nationwide
Twenty-five percent of the demand for chemicals nationwide

[[archie]]

We’re talking about big 3 here who has their own refineries ha? have you see their fuel depots in pandacan? na kayang mag supply ng 50% ng pilipinas? bukod pa yung refineries nila sa Bataan at Batangas.

Do you think di nila kaya mag imbak?

nope, they will always order at capacity to lessen the cost. mamaximize nila invetory nila para no tanks would be unused.

[Galactus]

might not be a CPA, but i have my background on analysis of FS.

Ok, if you say so, (but I highly doubt it).

its a simple logic really, why build tanks that you have no intentions of filling? sayang puhunan sa pagawa.

There is such as a thing as economies of scale. During lean periods, companies do not maximize their inventory of stocks, because it's not profitable to do so. Hindi naman consistent ang demand ng fuel products. (In the West, mas malakas ang consumption sa winter kesa summer). Dito sa Pinas, last time I reviewed energy consumption, malakas din sa last quarter and summer months and medyo flat in-between.

Like during the time na masyadong mataas ang presyo ng langis. Di sila gaano nag-import, kasi malulugi sila. They normally maintain naman a stockpile which will last for about 90 - 120 days in anticipation of an unlikely demand. Pag mababa ang presyo sa merkado, mataas din ang orders nila.

Funny, if you indeed claim to have a background sa financial analysis, dapat alam mo to. Napaka-basic nito. (Hmmph, pretender ka lang yata)

[[archie]]

Ok, if you say so, (but I highly doubt it).




There is such as a thing as economies of scale. During lean periods, companies do not maximize their inventory of stocks, because it's not profitable to do so. Hindi naman consistent ang demand ng fuel products. (In the West, mas malakas ang consumption sa winter kesa summer). Dito sa Pinas, last time I reviewed energy consumption, malakas din sa last quarter and summer months and medyo flat in-between.

believe what you what sir....

maybe your talking about DISECONOMIES of scale... economies of scale states that lower cost in the long run BUT output increases.

that is not maximizing profit... you are simply encouraging to increase cost of shipping and handling... rather than have a small cost of storage.

[gearhead]

Question: Why is the price per barrel falling? There was a report in the TV news that said it had to do with the possibility of less usage in the US which represents the biggest oil using market. If that is the case isn't it to the benefit of the oil producers that people get a lower price so they buy? Obviously the Philippines is not a big market so it doesn't matter. But by keeping the price up there will be less consumption of petroleum products thus the oil producer's lowering of price did not work for them? In the end the middle man profits but not the producer.

Just asking

[Galactus]

Economies of scale are the cost advantages that a firm obtains due to expansion. Diseconomies is the opposite.

Economies of scale may be utilized by any size firm expanding its scale of operation. The common ones are purchasing (bulk buying of materials through long-term contracts), managerial (increasing the specialization of managers), financial (obtaining lower-interest charges when borrowing from banks and having access to a greater range of financial instruments), and marketing (spreading the cost of advertising over a greater range of output in media markets). Each of these factors reduces the long run average costs (LRAC) of production by shifting the short-run average total cost (SRATC) curve down and to the right.

Economies of scale, also called increasing returns to scale, is a term used by economists to refer to the situation in which the cost of producing an additional unit of output (i.e., the marginal cost) of a product (i.e., a good or service) decreases as the volume of output (i.e., the scale of production) increases. It could also be defined as the situation in which an equal percentage increase in all inputs results in a greater percentage increase in output.

Shell and Petron import crude oil, since silang 2 na lang ang may refineries dito. They import more when the price of crude is low.

IMHO, stop hyping your credentials, obvious kasi na you don't know what you're talking about.

[_Cathy_]

economies of scale states that lower cost in the long run BUT output increases.

Yup. I'm not taking sides but my understanding of economies of scale is that the cost to produce decreases as output increases. Diseconomies of scale happens when the cost outweighs the benefits gained from achieving economies of scale this is because organizations that have reached economies of scale become more complex to manage.

I'd like to understand better how this is related to economies of scale: "During lean periods, companies do not maximize their inventory of stocks, because it's not profitable to do so". Because as I understand economies of scale is all about strength in numbers. Maybe Galactus has a deeper understanding of how the petroleum industry operates.

I have nothing against oil companies but why is it that when it comes to increasing prices they are so aggressive but when it comes to decreasing prices they are so conservative.

[Galactus]

Again your ignorance is showing. Try to read it again. It says there that it is simply one of the options to achieve economies of scale. In practice, companies will try buy in bulk when the price is low, thus getting even lower prices. Wala naman akong sinabi they should bulk-buy pag mataas ang presyo ah.

Ang contention mo kasi, ito:

its a simple logic really, why build tanks that you have no intentions of filling? sayang puhunan sa pagawa.

You're saying na parating PUNO ang tanks nila? Kasi sayang ang puhunan. II already explained to you na that is not necessarily the case. You're telling us na kahit mataas ang presyo ng langis, pupunuin pa rin nila yung tanke nila?

Get back to school, and learn the basics! May pa-FS FS analysis background ka pang nalalaman dyan...

But hey archie123456789, don't get me wrong. Di naman ako namemersonal eh. Palitan lang naman tayo ng opinyon dito. Pasensya na kung medyo magaspang ang dating ko. That's my nature, I guess...

[uls]

Question: Why is the price per barrel falling? There was a report in the TV news that said it had to do with the possibility of less usage in the US which represents the biggest oil using market. If that is the case isn't it to the benefit of the oil producers that people get a lower price so they buy? Obviously the Philippines is not a big market so it doesn't matter. But by keeping the price up there will be less consumption of petroleum products thus the oil producer's lowering of price did not work for them? In the end the middle man profits but not the producer.

Just asking

YES, there is an ideal price for crude oil.

remember when crude oil was soaring early this year, there was already talk of demand destruction.

But there was still strong demand for oil futures contracts.

Speculators still kept bidding up the price of oil till it hit the $147 peak this July.

As oil price climbed past $130, demand destruction became more evident.

Even the oil producers were saying oil price shouldnt be that high.

Past $145, there was no more momentum to sustain oil price...

Actually, before reaching that high, the smarter guys already sold off their contracts and exited the market. They made billions.

The dumber ones were left holding on to the $145+ future contracts and couldnt find buyers.

They has to sell the contracts at a loss.

that's when oil price started to fall...

---

Now oil has dropped to a level where oil producers are now complaining.

Kaya may meeting sila ngayon... they will cut oil production to support the price of oil.

For the oil producers, $70 is low enough.

They say $70-$100 is ideal.

[[archie]]

Again your ignorance is showing. Try to read it again. It says there that it is simply one of the options to achieve economies of scale. In practice, companies will try buy in bulk when the price is low, thus getting even lower prices. Wala naman akong sinabi they should bulk-buy pag mataas ang presyo ah.

Ang contention mo kasi, ito:


You're saying na parating PUNO ang tanks nila? Kasi sayang ang puhunan. II already explained to you na that is not necessarily the case. You're telling us na kahit mataas ang presyo ng langis, pupunuin pa rin nila yung tanke nila?

Get back to school, and learn the basics! May pa-FS FS analysis background ka pang nalalaman dyan...

ang sabi ko nga... majority... so konte lang oorder nila kung sakali bumaba yung price and that will not be cost efficient because of the cost of shipping... etc.

sabi ko nga im NO expert but have a background... do you wanna result to personal attacks? go right ahead... but if you want to go physical..... im right here bro!

[jpdm]

It's unbelievable how embarrassingly closed-minded someone here is.

Simple lang -- if any oil retailer (be it Caltex, Petron, Shell, Uni-Oil or SeaOil) is selling its products at a price higher than anyone else... DON'T BUY from that retailer. Buy from someone else.

Kung talagang mas mura ang Uni-Oil, bibili ang mga tao sa Uni-Oil. No need for the histrionics from someone here.

That's how the market works. Stop this whining.

??????????

[niky]

Unless anyone here actually works for an oil company, or works as an auditor for an oil company, we may never know the true market value of the gasoline on the streets right now.

It's all baloney and hearsay on either side, unless you can provide concrete evidence either pointing to low profitability or excessive profit on the part of the operation.

Like I was saying, why don't we try to look at market prices and find out? I'm surprised that I'm the only one interested in seeing how big the "excessive markups" of the Big Three really are.

This place is the Diesel Depot. It used to be a jeepney cooperative, but the prices are kept at the same level nowadays since the local JODA is the biggest clientele for this station. This is the lowest diesel in our market area, just 15 kilometers south of manila.



43.25. That's tax-free pricing because this station only services PUVs. I've heard complaints of the quality of their diesel (dirty, supposedly, when it was still a coop-only station... I don't know how it is, nowadays).

This is Nuez, an independent. This used to be a Shell station, but the franchiser couldn't make a profit and had to sell off. Actually..., there are two gas stations that closed down on the same strip, and one that closed for a while and had to be renovated.... wow.. I suppose they're making a ton of money, huh?



Diesel at 43.85. No PUV discounts mentioned, so that's likely PUV prices.

Here's a "Diesel Depot" that used to be a Jetti station (which also went out of business).


Without the need to service the cooperative that funded it, PUV pricing is 44.75.

Now here's the big three stations in the same area:


Petron. 44.91 for PUVs. 45.91 for regular buyers. This is directly opposite the former Jetti / now Diesel Depot station. Shell right beside it has the exact same price.


Caltex. 44.90 for PUVs. Near the Coop and Nuez. Regular diesel is 45.90.

---

Price gouging... errh... premium pricing, is surprisingly mild. A difference of under 2 pesos, and just over 2.5 pesos against the coop-price... which is probably the bare minimum you can charge and still stay in business (though the fact that these undercharging stations have changed hands numerous times tells you how low margins are.

A 2 peso margin... now think about this... 7-11 is the biggest, most profitable convenience store chain in the metro. Together with MiniStop, they have a common, competitive level at which they mark-up their products. A can of softdrinks costs about 21 bucks at 7-11... around 20 bucks at MiniStop.

Smaller convenience stores, non-branded ones... obviously can't charge that much for softdrinks (though some small restaurants do), so they sell closer to supermarket level. Supermarket level is aboout 13 pesos, last I looked... though it's getting higher.

That's a markup increase of over 30% for the "brand". It's not uncommon. Remember when Sarsi and Pop were still alive and softdrink bottles were in vogue? Back then, you would pay over a piso in markup for a Coca Cola or a Pepsi over a Sarsi. That was maybe 20% more than a Pop Cola (back when softdrinks cost around 5 bucks...)

In this case, because gasoline and diesel are a market sensitive and price sensitive product, the markups for "brand name" diesel aren't as high.

With "Diesel Depot" versus Shell or Petron, the markup is almost non-existent... but compare prices between that and the Diesel Depot coop-prices... a 6% difference in total price, which drops to under 4% difference when you compare like-to-like pricing for PUV diesel WITHOUT the extra taxes. A PUV driver would be paying just 4% more at the major players. Who have (according to those who've tried the coop) cleaner diesel.

There's a difference, but it's market pricing. Considering you can pay a bigger markup when buying chicken or fish from the supermarket versus the palengke, I think we should all be chasing after SM (and 7-11) for their "non-makabayan" pricing....

Again, don't shoot the messenger. If there's anyone to take issue with, it's OPEC. It's their greed that allowed speculation to push oil prices higher and higher... as they allowed speculators to push oil futures through the ceiling into some otherworldly level. And it's their desperation to get those investors back that's making them propose to artificially keep prices high. But there's politics involved. Note that the populist Venezuelans, whose president said he would sell to all of the USA's enemies, are in support of the production cut, while the tyrannical, imperialist pigs (lol) of Saudi Arabia are against it... because Saudi can survive low oil prices... socialist producers like Venezuela and Iran can't.

An executive of Eastern Petroleum (not a big three player, mind) chided Recto for getting people's hopes up. He's not a financial analyst. He doesn't know how the price of fuel is broken down, what exact tax the companies are paying for for fuel and the cost of operational overhead... which is what kills many local stations, be they "Big Three" or "small player"... it's still the same problem... running a gas station costs money. You're not just repackaging gasoline. You're paying for transport of the fuel to your station, the cost of running the station, paying the gas boys, land tax/rental/lease, business tax, E-VAT, return on investment, etcetera.

That's why franchisers set a minimum level of markup for franchisees... because if you start a price war with other gas station franchisees, they will die off, simply because they won't have enough net profit to pay off their loans.

That's also why some fleets buy in bulk, because elminating the middleman (gas stations) removes a hefty chunk of the price.

If people think that the profit is at such an insanely gross level... why don't they just set up their own gasoline stations? Independents don't need their own refineries... they can just buy overseas from the lowest bidder. I don't doubt you could get the gas and diesel very cheaply... but try maintaining a gas station without money to pay for maintenance of the equipment.

SeaOil was offering franchises for under 2m pesos a while back (that includes the equipment, too... one package was just 1m pesos)... if a government official thinks gas is way overpriced, they have enough money in their pockets to open up their own gas stations and start charging people ten pesos for gas... let's see how long the business lasts.

---

Again... if you think fuel costs too much, buy from someone else. The level of penetration of independents in the market is now big enoough that you will pass by at least one independent on any route you take through the city. (on my trips inside the city, I pass at least three on any trip... and there are three or four independents near my house in the province) The question is... why don't you buy from them? Why do you pay for the "excessive" markups of the Big Three?

[jpdm]

Again, don't shoot the messenger. If there's anyone to take issue with, it's OPEC.

Im surprised you said this. When you hit me with you shame thing, you are attacking me personally. It was a hit out of nowhere.

Why did you singled me out? Because of my attacks on oil companies?

O may personal grudge ka ba sa akin?

It's their greed that allowed speculation to push oil prices higher and higher... as they allowed speculators to push oil futures through the ceiling into some otherworldly level. And it's their desperation to get those investors back that's making them propose to artificially keep prices high.

Now, you are talking. Tama yang sinabi mo.

An executive of Eastern Petroleum (not a big three player, mind) chided Recto for getting people's hopes up. He's not a financial analyst. He doesn't know how the price of fuel is broken down, what exact tax the companies are paying for for fuel and the cost of operational overhead... which is what kills many local stations, be they "Big Three" or "small player"... it's still the same problem... running a gas station costs money. You're not just repackaging gasoline. You're paying for transport of the fuel to your station, the cost of running the station, paying the gas boys, land tax/rental/lease, business tax, E-VAT, return on investment, etcetera.

Kaya oil companies tinitira.

Ano ba yang gas stations na yan. Franchise lang yan.

Parang SM. Kumikita SM pero mga tenants nya hindi.

Kasi, ano mang mangyari, kita pa rin SM. pero tenants lugi pag walang benta..

Dapat banatan oil companies. Talo gas station owners. Sa kanila hirap sa oil companies ang sarap.

That's why franchisers set a minimum level of markup for franchisees... because if you start a price war with other gas station franchisees, they will die off, simply because they won't have enough net profit to pay off their loans.

Yang nga. Kaya yung ibang cooperatives gusto nang mag-import ng direkta...

If people think that the profit is at such an insanely gross level... why don't they just set up their own gasoline stations? Independents don't need their own refineries... they can just buy overseas from the lowest bidder. I don't doubt you could get the gas and diesel very cheaply... but try maintaining a gas station without money to pay for maintenance of the equipment.

naparaming gusto, im telling you.

lalo na ngayon na mababa na franchise fee, lalo Seaoil

pero problem, hawak sila sa leeg ng mga oil companies.

SeaOil was offering franchises for under 2m pesos a while back (that includes the equipment, too... one package was just 1m pesos)... if a government official thinks gas is way overpriced, they have enough money in their pockets to open up their own gas stations and start charging people ten pesos for gas... let's see how long the business lasts.

Sea oil is expanding based on their recent press release.
---

Again... if you think fuel costs too much, buy from someone else. The level of penetration of independents in the market is now big enoough that you will pass by at least one independent on any route you take through the city. (on my trips inside the city, I pass at least three on any trip... and there are three or four independents near my house in the province) The question is... why don't you buy from them? Why do you pay for the "excessive" markups of the Big Three?

This is the gist of the boycott thread...nauna na kasi galit ng iba...

[gearhead]

waw, ngayon ko lang nabuksan 'tong thread. meron pala entertainment dito.
ahahahah

Very action packed.

Questions lang: Okay so it was explained that the oil companies bought at a higher price and need to deplete that stock before rollback. When will the "expensive" stock be depleted you reckon?

Also wasn't it possible to operate stations with a lower pump price when price per barrel was lower? i.e. if the price per barrel was where it was at a certain point it had been is it fair to say that the pump price should generally be equivalent to that plus say a bit of inflation or whatever? Just asking since the issue of the stations was raised.

Just asking. Peace. Sabay ilag.

[jpdm]

Oil Companies should roll back the prices now!!!


..... by 10 pesos for diesel and 7 pesos for gasoline!!

[[archie]]

Again your ignorance is showing. Try to read it again. It says there that it is simply one of the options to achieve economies of scale. In practice, companies will try buy in bulk when the price is low, thus getting even lower prices. Wala naman akong sinabi they should bulk-buy pag mataas ang presyo ah.

But hey archie123456789, don't get me wrong. Di naman ako namemersonal eh. Palitan lang naman tayo ng opinyon dito. Pasensya na kung medyo magaspang ang dating ko. That's my nature, I guess...

then dont bring up your "magaspang" attitude here... learn some manners.

dont tell that a person is ignorant IF they are saying that they just have a BACKGROUND and not an expert. i might be NOT well versed at that aspect but i can definitely school you on other aspects!

anyway, apology accepted just dont do it again.