We must subsidise the oil companies!

Will you look at this?

Royal Dutch Shell today said it would cut another 1,000 jobs this year after reporting a 69% slide in annual profits to $9.8bn (£6.1bn).

The Anglo-Dutch firm also reported a steep drop in fourth quarter earnings – down 75% to $1.18bn – after pressure on margins in refining offset a year-on-year increase in oil prices.

What horrors and of course we must subsidise the company.

Hmm, what\’s that?

Oh, well, it\’s just basic logic. When profits rose there were huge cries that there should be a windfall tax on the oil companies. They were profiting at our expense or something. Now that they\’re hurting exactly the same logic leads to the necessity for us to subsidise them.

So come along now Compass and all points lefty. Time to step up and prove you really do believe in the logic of what you say.

6 thoughts on “We must subsidise the oil companies!”

  1. This post doesn’t work at all. If you think there is a “reasonable” rate of profit for Shell (such as is done with utility companies) and anything above should incur a windfall tax then there’s no reason why you have to think it is the level profits were in 2008.

    If Shell had made a loss perhaps you could get the post to work, but really this seems to take the argument in your head one coffee too many.

    Tim adds: No. For you’re forgetting one of the basics of oil company profit making. When prices are rising, because of the accounting treatment on oil going through the 120 (or so) day process from well head to your car, profits soar. When they fall they fall just as much. The run up in profits before was just as much to do with this accounting treatment as the fall is now.

  2. There nothing especially controversial about using tax policy to moderate agg demand on the way up and government spending to support it on the way down. This has nothing to do with oil or oil companies per se.

  3. Never expect logic from a lefty – you’ll be sadly disappointed.

    Sobers puts it well (above) – “Socialists only ever want to share in the gain, not the pain.”

  4. I’m betting those 1,000 jobs are nothing to do with the drop in profits though. They have already cut 5,000 jobs as part of a long-overdue campaign of reform. Exxon and BP underwent these reforms years ago, and Shell were poised to follow suit just after the reserves scandal. But then the oil price shot through the roof and Shell didn’t think they needed to reform.

    I know Dutch people on full expat packages working in Houston, an Englishman on a full expat package in Paris, and a Dutch girl on a full expat package in London. Because Shell don’t pay that well in the home countries compared to their expat packages, everybody wants to be expatriate; and if you’re on say the Kashagan project in Kazakhstan but the first 2 years is in Paris, you’re treated almost as though you are in Kazakhstan for the whole assignment.

    Shell wastes money hand over fist, its employees were milking a gravy train (which I was momentarily hooked up to) for years in full knowledge they were taking the piss (and who can blame them). Profit drop or not, Shell are just doing what they needed to do anyway.

Leave a Reply

Your email address will not be published. Required fields are marked *