Diesel prices

please tell me how the tax agents deduced that people were using WVO and that taxes were not paid __________________________________________ Never argue with an idiot. They'll drag you down to their level and beat you with experience.

Easy. If a car drives past that smells like a KFC then check them out.

Richard See

Don't know but if you are interested you could always research it. BTW I stand corrected on Canada.

There seems to be no clear taxation system in the USA, however given the low rate of fuel taxation, it is unlikely to face anything unfavorable, although charges could vary from state to state. Production of biodiesel in some US regions may require motor fuel taxes to be paid, which are typically used to fund road construction costs.[8]

The Government of Canada exempted biodiesel from the federal excise tax on diesel in the March 2003 budget. In Ireland a pilot scheme is currently running (as of April 2006) whereby eight suppliers have been approved to sell SVO/PPO for use as a fuel without the payment of excise duty (Value Added Tax at 21% still applies, SVO from any other source still attracts excise duty at 36.8058 Euro cents per litre plus 21% VAT). Despite its use being common in France, it would appear there has been no legislation to cover this.

In the UK, it is legal once duty on the fuel is paid.[9] In the UK, drivers using SVO/PPO have been prosecuted for failure to pay duty to Her Majesty's Revenue and Customs. The rate of taxation on SVO was originally set at a reduced rate of 27.1p per litre, but in late 2005, HMRC started to enforce the full diesel excise rate of 47.1p per litre.

Following a review late 2006,[10] HM Revenue & Customs has announced changes regarding the administration and collection of excise duty of biofuels and other fuel substitutes (Veg Oil). The changes came into effect on June 30,

HMRC argued that SVOs/PPOs on the market from small producers did not meet the official definition of "biodiesel" in Section 2AA of The Hydrocarbon Oil Duties Act 1979 (HODA), and consequently was merely a "fuel substitute" chargeable at the normal diesel rate. Such a policy seemed to contradict the UK Government's commitments to the Kyoto Protocol and to many EU directives and had many consequences, including an attempt to make the increase retroactive, with one organization being presented with a £16,000 back tax bill. This change in the rate of excise duty has effectively removed any commercial incentive to use SVO/PPO, regardless of its desirability on environmental grounds; unless waste vegetable oil can be obtained free of charge, the combined price of SVO/PPO and taxation for its use usually exceeds the price of mineral diesel. HMRC's interpretation is being widely challenged by the SVO/PPO industry and the UK pure Plant Oil Association (UKPPOA) has been formed to represent the interests of people using vegetable oil as fuel and to lobby parliament.[12]

you made the claim but I need to research it? __________________________________________ Never argue with an idiot. They'll drag you down to their level and beat you with experience.

It's true in Washington state but since they don't have a mechanism for individuals to voluntarily pay it they don't bother anymore. One case where the cost of bureaucracy benefited the consumer.

JD

I will follow the advice in your tag line.

I'm not trying to get into the Exxon is evil/Exxon is just acting as a business in a free market acts argument.

I'm not to fond of OPEC right now though. While it may be true that the current cost of fgasoline closely matches the current cost of crude, it is not the case that the current cost of crude matches the current demand and supply secenario. Even with OPEC refusing to raise production, the futures industry can only justify a cost closer to 70 dollar per barrel. Not over a hundred.

On another topic, I looked into making my own biodiesel, or converting my car to WVO, and in the state of Maryland I could find no system set up to collect taxes on either fuel. I would not be surprised if I did it and was fined, but the irony of it woudl be that I tried to find out how to pay the tax, and I could not find anyone willing to take my money if I were to make my own biodiesel. In the end I opted not to make it since it involves some nasty chemicals, but I think the state of Maryland is missing out on potential taxes, and I wouldn't be surprised if other states are also. Not that I am aching to pay taxes, but road use taxes do go to maintaining the roads I drive on, and I appreciate it when they put salt on icy roads, or fix potholes.

Have a good day, Bill

Trader4, Exxon no longer owns 50% of Saudi oil, they just do the work on a contract basis and receive 50% of the revenue, which is not as beneficial to them as ownership would be on Wall Street, but it still makes it clear to Exxon that the Saudis mean more to them than American kids in freezing apartments going to bed with a toothache.

And, no I did not mean to imply that you were among the ruling class. Clearly you are not. You are fighting their battles for them, however, if I read your post correctly.

I am not going to spend the time to get your figures quoted exactly, but at some point in your post you argued that at a lower tax rate the wealthy today pay a higher percentage of total government revenues than they did under the 70% tax rate. Does this then not confirm the gist of my argument, that our society is too top heavy? I think that math indicates that the top 1% or whatever it was has a much higher percentage of total wealth since a lower tax rate now produces relatively more government revenue that a higher tax rate used to.

Which is precisely the problem. This intensifies the transfer of wealth from the less wealthy to the ruling class, at least in part because of where the interest on the National Debt goes. It is deducted from the paycheck of a Wal-mart worker and deposited into the accounts of Exxon executives and other members of the ruling class. Not just chump change. We are talking about numbers approaching a trillion dollars, per year.

"Those who make peaceful change impossible, make violent revolution inevitable." - John F. Kennedy.

I still think you need to reevaluate which side of the battle would be in your best interest.

Here's the twist on that argument. The futures industry doesn't justify the price. The price of futures isn't set in some secret meeting in NYC. It's set by open auction with the entire world free to participate during regular trading hours every day. The particpants include oil producers, oil consumers, and speculators. If any oil producer thinks that $105 a barrel for April crude is high and a great opportunity, they can sell as many April futures contracts as they want. In other words, if there were producers that think the prices above say $90 were too high and unsustainable, the prices wouldn't be that high because there would be heavy selling from oil producers above $100.

Interesting question. I would think most states are just ignoring this for now, as it's a very small % of the total fuel usage. Plus, govts are actually subsidizing alternative fuels at various levels, so ignoring the tax, at least for the time being, would seem to make sense.

And that's how it always is, very broadly speaking...

DAS

For direct replies replace nospam with schmetterling

Yes, it's very "apparent", i.e. very visible. In GB we pay a lot of tax on petrol and whisky.

DAS

For direct replies replace nospam with schmetterling

No kidding?

DAS

For direct replies replace nospam with schmetterling

Just mix a bit of diesel with your WVO and they can't tell the difference in smell test.

Trader,

I am very familiar with that argument, and that is the reason that this seems so strange. Or perhaps more upsettingly, it seems like it might be a paradigm shift to a new paradigm that involves the oil industry simpy charging more per barrel than they used to with the same supply/demand ratio and the same value of the dollar. It's kind of a scary situation. The green awareness in America might drive a shift like this. The last two quarters have seen a decrease in American gas consumption. That hasn't happened in years. So there could feasibly be something to drive that shift. It woudl mean that the projections by the futures people will be low until they adjust.

Assuming there is not a total paradigm shift (I don't think that there is.) means that oil should be coming down soon. Analysts have been saying for weeks that oil should be coming down, or that it is unjustifiably high, but it is going up. Even despite the political squabbles amongst oil producing countries, by historical comparison, the amount of oil being pumped out of the ground compared to consumption currently places the value much lower than expected even factoring in the squabbles.

The main reason that OPEC sites for not increasing production (or at least the reason that the analysts that I have listened to have cited.) is that demand should be dropping in the coming weeks with the end of the heating season in much of the world since there are more fuel hungry houses to heat in the northern hemisphere than the south. They say there is not reason to ramp up production for a few weeks. That doesn't sound like conspiracy theory to me, or an abuse of their monopoly, it sounds like smart planning.

However, back to the argument that you cite, supply and demand is an illusion in this industry. If OPEC wanted to they could easily set an earnings goal and reach it. They could say,"We want to make XX billion dollars this month." and they could do it. They could raise the price to whatever they need to accomplish their goal, and because everyone in the world is dependent on them, they would get the money. People have to drive to work. People have to heat their homes. Companies need to run factories. Ocean liners need to carry goods. Planes need to fly.

I'm sure that in your economics courses, you learned all about other factors that drive markets other than supply and demand. There is simply the investor's greed or speculator optimism. I forget the names of the players, but there is a well documented case of two investors that were fiercely competitive and used the same broker. The broker sold each of them a few shares of a fake stock. This stock had no value. It had no company tied to it to produce value. These two fellows bought and sold those shares back and forth to try to attain the most shares they could. The whole time they knew it was a hoax. Psychology has a role in the industry. There are a lot of big egos in the market. Actually I think I may have learned about that case study in psychology rather than economics.

But my point is that it is not as simple as supply and demand when you look at the market on a small time scale, but on a larger one it pretty much is. If OPEC were to raise prices ridiculously, in time people would find ways to do with less petroleum products until OPEC couldn't sustain a lofty profit goal.

So I predict that prices will fall in the next few months. Maybe not soon since everyone is excited about the new record highs, and those are driving it higher. But a correction is underway. I would be very surprised if a barrel is still over 90 dollars by the end of June. Even with summer travel coming.

Just my two cents worth. (That would drive my car to the end of the block.)

Have a good weekend, Bill

I agree completely with what you've stated above. I think supply and demand does work in the long run. But I would say what accounts for the current price action is that this time OPEC finally has it's act together. In the past, particularly when we had oil at $12 a barrel, there was widespread cheating by OPEC producers. They routinely exceeded their output quotas. With OPEC, this market isn't like a free market for common items in the USA, where monopolistic behavior is illegal. OPEC is acting as an oligopoly and being the biggest producer, they have a huge factor in setting the price.

If speculators are truly the ones propping up the price, then when it finally turns, the fall should be swift and furious. I tend to doubt that though. You'd have to be a real bone head to think oil at $110 has a lot more upside. Especially given that there are signs demand is slowing and the US economy is slowly dramatically and perhaps already in a recession. And if you're looking for a hedge against inflation, there are certainly other physical commodities that would seem to offer a hell of a lot less downside risk at this point.

Hi "Gogarty"

Stop complaining about Diesel prices! If you lived in Northern Ireland as I do, then one US gallon (3.785 litres) would cost you (at todays currency rates) $8.68 US Dollars . More than twice what you are paying.

If public transportation was anywhere near as good here as it is on your side of the pond, I wouldn't gripe about diesel prices quite as much.

JD

Danny and Heather wrote:

The U.S. is a lot bigger, geographically, than Ireland too. It's hard to live in the rural parts of the U.S., especially in the larger western states, without driving long distances regularly.

Trader4, what is the explanation, other than greed, that is preventing capital from investing heavily in solar, wind, tidal, geothermal and mass transit? Why this slavish addiction to fossil fuels? That is not a rhetorical question. I suspect you have some inside view insight into those issues.

It seems that if the trillions spent to try and dominate Iraqi oil and the pipeline corridor through the Pashtun areas of Pakistan and Afghanistan had been spent on alternative fuels, alternative vehicles and mass transit we could have made good progress toward moving beyond the oil addiction. No? Why are markets failing to see this?

The greenhouse gas and climate change issues must also be considered. Humanity cannot continue to expand the burning of fossil fuel without serious adverse consequences like reduction of food production and the flooding of coastal cities.

Incidentally, I am a business owner and make my living entirely as a capitalist.

one big reason things like solar or wind turbines aren't used more is that the enviro whackos fight the installation of these things, for example in NJ there was an idea to build a turbine wind farm off shore but the so called environmentalists forced the plan to be can celled.

__________________________________________ Never argue with an idiot. They'll drag you down to their level and beat you with experience.