Tuesday, Jul 16, 2013 at 09:07
Bazooka, understand.
Michael,
The reality is that neither can get a return significant enough for the capital employed. It sort of debunks the theory that there is a lot of money to be made from refining petroleum products.
The Kurnell refinery was built in the 1950’s and whilst it has had upgrades it cannot compete with the mega-refineries in Asia.
America, the bastion of all things capitalistic, haven't built a new refinery in over 30 years; why not if there is so much money to be made from it? It is a question worth asking when the call goes out that fuel refiners are ripping us all off...
I have written on the fuel topic many times in the
forum over the past few years, and not to defend fuel companies, they are big enough to do it themselves, but it is best we understand it fully, before calling for (successive) governments to fix something they have no control over.
Rest assured if the government of the day could pull a big stick and out an “whack” one of the refiners, it would because it would surely be popular with the voting public, but they don’t for the simple reason that almost everyone has tried, but the reality is there is nothing to “whack” them about – the price is what it is, and there is a market mechanism that controls it perfectly.
Back in 2008 I flagged that the biggest concern for
Australia isn’t the price of the fuel, but whether
Australia would retain a refining capability, time has proven that they are packing up and going home when it comes to actually refining because the return versus the capital cost is simply not worth it...
Over time this will have far greater implications for the supply of fuel to
Australia.
And don’t read me wrong here, I don’t want to pay anymore than I need to, but I at least want to understand why I pay what I do.
Here is one of the posts...
Fuel - More myth than fact?
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