UK gasoline could go over £1 per liter
A quick thrash of the calculator shows that £1 per liter works out to a sky-high $6.88 per U.S.
gallon. This prediction comes from someone who knows whereof he speaks - Lord Browne, CEO of British Petroleum
(pictured at right). In an interview with the BBC, Lord Browne said that prices could well pass the pound-per-liter
benchmark if crude oil prices continue to rise, adding, "We're not passing anything like the complete effect of
crude oil prices onto the consumer."Meanwhile, BP reported first quarter profits of $5.265 billion.
With President Bush sweating at the prospect of $3 a gallon prices at U.S. pumps, he must be glad he's not in Tony Blair's shoes.
[Source: BBC. Image courtesy BP]
Reader Comments (Page 1 of 1)
Anonymous Coward 1:14PM (4/27/2006)
If they are absorbing some of the rising cost of gas, then you would see their profits likely decline, not hit record numbers. They are merely whining about how much this is hurting them while stealing from our pockets.
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Michael 1:36PM (4/27/2006)
If I remember correctly, it was over 1/litre when I was there in 2000.
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Hank 1:43PM (4/27/2006)
You should do a tax per gallon break down for more accuracy. You'll then find they don't really pay much more than us pre-tax/gallon. In fact, 65-75% of the price of fuel in the UK is taxes. That quickly makes $6.88 into only $2.41 per gallon, pre-tax. That's almost exactly the pre-tax cost in my town in NY right now.
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jamie 1:46PM (4/27/2006)
I am sure that Bush WISHES he was in Tony Blair's shoes.
All Tony has to do is absorb some of the price increases within the government tax levy on petrol. So as a result British gas prices have not escalated to the degree that U.S. prices have.
Bush doesn't have a cushion he can play with like that. So he hopes releasing more oil on the market will ease the situation somewhat. It will for a couple of months, but then WATCH OUT!
The GP (General Public) have not been warned that purchasing foreign goods is what is driving up prices worldwide. The global economy is driving the dollar down.
The Bank of Canada report offers some insight as to what is really happening.
"The report gave a new lift to the Canadian dollar, which is already at 14-year highs. The currency rose to C$1.1225 to the U.S. dollar, or 89.09 U.S. cents, from around C$1.1240, or 88.97 U.S. cents, beforehand.
The Bank of Canada said it expected the U.S. dollar to depreciate by some 7 percent through 2008, although only a fraction of that would be against the Canadian dollar and the fall would come only late in the 2006-08 projection period.
It expected the currencies of emerging Asia, Japan and some oil-exporters to appreciate the most as these had seen no significant real appreciation."
http://news.yahoo.com/s/nm/20060427/wl_canada_nm/canada_economy_canada_bank_col_1
From this you can deduce that prices in the U.S. are going to escalate another 7% yet.
Why is this happening?
U.S. motorists are buying gasoline with U.S. dollars. Duh.
There is a glut of U.S. dollars purchasing very limited oil supplies around the world.
Half our oil is imported now.
The economies in China and India are exploding and demand oil to function.
We buy Japanese and Chinese goods like they are going out of style.
Ergo China has beaucoup bucks to dump on Middle Eastern oil companies which drives up the price internationally.
The Middle Eastern economies are now buying the same goods from India and China with our dollars which further drives up the price.
This cycle keeps repeating and our dollar keeps sinking.
The price of gas hasn't changed that dramatically as you have been led to believe. It's INFLATION eating away at the dollar that has done the real damage. We're actually still paying $1.70 per gallon like back in 1995, but by today's dollar the pump says $3.29.
So the more oil we buy or use, the more we cut our own throats!
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Jared 1:57PM (4/27/2006)
I don't feel sorry for the UK politicians, they dug their own grave. The tax on a liter of petrol in the UK is 50 pence or ~$3.41 a gallon. The people of the UK I do feel sorry for, they are the shaft up the a**! In the US the federal tax on a gallon of gas is 18.5 cents a gallon!
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klaatu 2:03PM (4/27/2006)
Last year when we were paying over $3 a gallon in Michigan, my sister-in-law told us the UK price spiked to what worked out to be about $8 per US gallon - and it was $10 per US gallon equivalent on the Scottish Motorways (where "they've got ya by the short & curlies" if you need petrol).
No wonder the Brits say "bloody hell" a lot...
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Micah 3:37PM (4/27/2006)
It's BP not 'British Petroleum'
How to use it in a sentence: "This prediction comes from someone who knows whereof he speaks - Lord Browne, CEO of *BP*(pictured at right). "
And yes, I am captain AR today. :)
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Chris 3:48PM (4/27/2006)
Micah: Technically it's BP Amoco, the BP stands for British Petroleum.
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LaserBeams 5:27PM (4/27/2006)
I was going to post what #2/Hank said in a little more detail, but he's got the general gist of it. Approximately 70% of the price brits pay for gas is tax, whereas in the US, we tend to pay around 30 cents tax per gallon.
So if BP is making "first quarter profits of $5.265 billion", then just think of how much money the government is pulling in - and they don't have production and shipping costs to worry about.
No wonder they can afford to have speed cameras everywhere, and want to make the system even more pervasive. National ID? GPS tracking in all cars? Suuure, why not.
I just wish they'd make the roads a little bit wider with some of that cash.
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jamie 6:00PM (4/27/2006)
Here in Cali BP bought out Arco (formerly Atlantic Richfield). So they call themselves BP/Arco or Arco "a part of BP".
Anyhoo, they still have the lowest prices around at (ouch) $3.29 per gallon. Ah, but that sure feels a whole lot better than the $6.88 a gallon the Limeys back home are shelling out.
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benj 6:06PM (4/27/2006)
no it stands for Beyond Petroleum! :P
But seriously, I think the british...hell the europeans have a different outlook on petrol prices than our neighbours across the pond. We are used to prices being so high...they don't call it 'Rip off Briton' for nothing.
The press have had relatively little to say on the price of petrol here, so on the whole Blair has had no trouble really when it comes to petrol...
Shame yesterday was called 'Black Wednesday' for him and his government though...but thats another story
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The Doctor 6:09PM (4/27/2006)
No, it's just BP now. The Amoco name was dropped a few years after they were taken over by BP.
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Steve 11:41PM (4/27/2006)
Its a free market economy. Why are you so jealous of the profits the oil companies are making. I am not a cheerleader for oil giants, but why should we blame them?
Isnt this what capitalism is all about? The pursuit of profits?
In fact, gas prices should be 7 dollars a gallon in US also. Imagine the profits then! More than 100 billion dollars a year for exxon mobil. They can then pay corporate tax of 40%, which makes it 40 billion dollars in governments hands to spend on infrastructure and education.
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Joey (Kev) 3:57AM (4/28/2006)
1.40 per liter is nothing unusual in Germany. Has forced car companies to focus on mpg-ratio and raises awareness for saving (a bit) of the fuel we waste for nothing. It limits the capability of oil magnates in the middle east to shift prices upward without public complaints because the level is so high already.
In Germany the high prices have led to construction of houses that use only 3 liters of oil per square meter a year! That is 300 liters for a whole year in a 100m-home! Costs only 20% more than a conventional house. People are all crazy about biomass, wind and solar energy but it is still a long way before energy dependence is reduced notably.
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david 9:06AM (9/28/2007)
I applaud their efforts but feel it is necessary that they offer biofuels in order to deliver a truly consistent message.
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