Read an article about electric cars a couple of weeks ago. Sales are very poor. One of the reasons is they are so expensive. 25k even with a 5k Govt subsidy.

I dread to think what petrol will cost in 20 years time, even without the upheaval in the middle East, Etc it will be out of reach of most people by then.

Or not. If the vast majority of people couldn't afford petrol, then there would be no point in making the stuff. The producing countries ain't that stupid. They are expert at keeping the price maxed at a level that everyone will still stump up, even if complaining bitterly, and the only other thing that is likely to change over time is the government's tax take percentage.

What I do find somewhat surprising is why the oil companies sold off the refining operations to 3rd parties. They have traditionally controlled all operations from well to tank but for some reason decided (almost en-masse) to ditch refining. I can only assume that their shareholders decided that there was not enough margin in refining (there seems little scope for adding further value in that process) and instructed them to sell it off and book the cash. So they sell it off to smaller operations, who don't have the finances to withstand a period of high raw material prices AND lower demand. Obviously a short-term gain for big oil but a potential problem if other refiners are suffering similar problems.

Thought I had read somewhere that the developing world will be buying more cars etc than the west in the next couple of years, so demand is going to rise in the next few years.

There are a number of reasons why the big companies got out of refining. Firstly, they earn on average between 20-25% return on capital employed in oil exploration activities, but even in good times the return on refining is only around 8%. Secondly, and the main reason why they exited, is simply because there is massive overcapacity in the industry and overcapacity in a depressed market spells huge problems. A refinery obviously has huge fixed costs and even when it is not producing much it still carries significant costs such as maintenance and safety and regulatory compliance, without even taking into account the payroll and other infrastructure. If the market overcapacity means you are going to be operating at 60% of the plant's capacity for the foreseeable future then it doesn't take a genius to work out that the economics don't stack up - especially when new refineries are opening in China and India which don't have the same regulatory burdens.

We should get ourselves a nice friendly secular dictator with an army background, arm him to the teeth and then get him to attack Iran...


















on second thoughts we tried that and then decided to dump him.

It's all very well saying but what if you have no option but to drive?

Then you'll be worse off.

then but it back when they go bust,

BP will come out of this on a right winner