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Oil prices.. how low can it go?
Rank: New-farer Joined: 11/20/2015 Posts: 16 Location: Iraq
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enyands wrote:enyands wrote:VituVingiSana wrote:enyands wrote:VituVingiSana wrote:enyands wrote:enyands wrote:Obi 1 Kanobi wrote:VituVingiSana wrote:enyands wrote:Came across this article somewhere
"The highest price per barrel worldwide was about $140 ($140/barrel) around early 2014 and the price per litre (petrol) was about Ksh. 120 (Ksh. 120/litre). Now, the world prices have significantly dropped to $30 per barrel ($30/barrel). If we invoke simple algebra here, then the price per litre should not be more than Ksh. 45 per litre. One city in America which was charging about $4/gallon when the average world price was $140/barrel is now charging $1.60 per gallon (a 60% drop in the prices at the pump). Look at this:
If $140/barrel = Ksh. 120/litre
what of $30/barrel?
This computation returns a value of (120x30)/140 = Ksh. 26/litre (when adjusted for inflation and transportation costs, this should not be more than Ksh. 45/litre), which is equivalent to an average of 60% drop in prices at the pump worldwide {to be exact it is [(120-45)/120]x100=63%} . What is going on in Kenya is price gouging supervised by ERC. The petrol price per litre currently should not be more than Ksh. 50. Kenyans should demand access to information to know what has been going on at the ERC with regard to all the functions of ERC particularly the energy sector (energy products - gas, fuel, paraffin, electricity, etc.) and water services and pricing since ERC was formed. It has played with the minds of Kenya by reducing only 50cts, Ksh. 1.00 or Ksh. 2.00 per litre." It's a bunch of nonsense. Taxes: In the wake of high oil prices, GoK (political reasons) reduced the taxes at the time. These taxes are returning slowly but surely. Recently, there was an excise tax introduced. And in Sep 2016, VAT will be back. Margins: The margins given to OMCs & Retailers remain the same as they pay fixed costs. The rent, salaries, insurance, etc doesn't reduce/increase with oil prices lock in step. Lag Period: Brent for March delivery is at $30. That oil has to be transported to a refiner, refined then brought to Mombasa. None of that is free nor immediate. So the March price benefits flow to us in April. Then the ERC uses 2 months of pricing for an 'average' price. Inflation: Fixed costs in Kenya are affected by inflation. Salaries are up since 2012. So are rents. And many other expenses. Financing: 20% vs 12% much earlier. KES/USD: 103 vs 82 [I don't have a graph but it has been volatile] *Please feel free to correct any factual errors. I wish I had access to Bloomberg where I could chart to compare the oil prices vs forex vs interest rates* You are just making excuses to justify an untenable situation. It doesn't make sense to ignore the crude price drop from Usd 140 to Usd 30 and try to explain it as a result of other inputs. Example supplier of lag time is not linear. i.e marketers will not wait to process the cheaper crude oil before they can cut prices, in the real world, they can cut prices immediately they are able to replace expensive inventory with cheaper inventory to get ahead of competition. Petrol should be around Sh 60, but taking into account the blood sucking kenya govt taxes, maybe around Kes 70/litre Didn't I see the cs the other day instructing the ERC to report to him why the prices ain't dropping .let's not be selfish because we have invested shares in some oil company and think you will benefit from higher fuel prices . Bottom line is that some land Locked countries in Africa dropped their oil prices significantly .why not Kenya. Please someone correct me if keter (energy cs) didn't come out complaining about the higher prices. Who are we to say that yeye Hajui what he is saying and its us who know what we are saying .tuwache kudanganyana hapa smh... As a matter of fact I had to dig the archives .Kama cs is complaining about the rationale used on pricing index who is someone to say this is garbage link Of course! Our CSes are always right. They are the smartest, cleanest and most virtuous folks Kenya has produced. I think you should apply for the cs job since you always know all the jugeon words you can use on the press briefing to explain a simple point. Wanjiku will be made to believe you are Havard trained and always cut Above the rest. I don't have a car unfortunately.Mimi ni wanjiku but I'll always tell the matatu driver to be filling at kk as we go home since Oloo Aringo amesema... Thanks for the tip prof With your support I shall go right to the top. Please fill up at KK. Thank you. Come Again.  Forget about getting low gas prices and suck it up.matatu fare will hit the roof now. There it is. Sad The Government doesn't think that Kenyan's are supposed to be enjoying cheaper oil and its related products. The Treasury is on course to introducing a 16 per cent value added tax (VAT) on petroleum products, setting up consumers for another round of pump price increases even as global crude price continues its slide to the bottom.  Petrol price increase looms in Rotich’s new September taxMganga haagizi Mchicha.
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Rank: Chief Joined: 1/3/2007 Posts: 18,056 Location: Nairobi
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The VAT was introduced then suspended coz of politics [pre-election] as oil prices were rising to new highs. Now that oil prices have reduced [as have wholesale FOB prices for refined fuels] GoK is likely to let the suspension expire and add to our woes. I am not against higher taxes on fuel BUT there has to be a TRANSPARENT process on collection and utilization of these funds. I will pay an extra 10/- per liter if the potholes are fixed [permanently not for 2 months], roads marked, roads expanded, PSVs are policed, etc. What I am against is the funds being used for travel junkets, shoddy repairs and buying new cars for politicians! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Hello Joined: 1/24/2016 Posts: 2 Location: Nairobi
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Guys is this true,I heard KQ still buys Oil at $95 a barrel bcoz of their hedges which run out next year
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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IntegraMW wrote:Guys is this true,I heard KQ still buys Oil at $95 a barrel bcoz of their hedges which run out next year And is it true that you heard this ama you imagined it? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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Impunity wrote:IntegraMW wrote:Guys is this true,I heard KQ still buys Oil at $95 a barrel bcoz of their hedges which run out next year And is it true that you heard this ama you imagined it? @obiero any clarification, insider information? John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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you know what that will do. it will push the taxes on per litre to almost 70% if not higher!! this isn't right .brother there aint nothing you can do about it especially "transparency".suck it up and move on and pay the higher taxes to go for unnecessary foreign trips and unnecessary spendings .you can bring in new monkeys but don't forget its the same forest.I think its not a weighty issue for UK to talk about it because few Kenyan voters have cars.if it was a first world where kids in high school own cars then there would be some feather rafflings and constant bashing .but for now lets suck it up and accept what they offer
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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Super petrol already has VAT;it wasn't removed during the times of high oil prices. VAT was removed on kerosene to protect the vulnerable (lower class)in 2009 by one John Michuki. Super petrol which is used by majority of the private vehicles will not be affected same as it wasn't during the excise duty bill of 2015. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Ericsson wrote:Super petrol already has VAT;it wasn't removed during the times of high oil prices.
VAT was removed on kerosene to protect the vulnerable (lower class)in 2009 by one John Michuki.
Super petrol which is used by majority of the private vehicles will not be affected same as it wasn't during the excise duty bill of 2015. NO there is no VAT on petrol. Life is short. Live passionately.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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What is this I'm hearing that 50% of eurobond money is still in NY.is this rumors
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Rank: Elder Joined: 7/21/2010 Posts: 6,175 Location: nairobi
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enyands wrote:What is this I'm hearing that 50% of eurobond money is still in NY.is this rumors in kenya anything is possible "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 11/7/2007 Posts: 2,182
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Iko huko tu LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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@Sparkly Before disputing comments placed here please do a background research. Taxes on petroleum products are as follows; Value Added Tax Excise Duty Petroleum Development Levy Road Maintenance Levy VAT is at standard 16% Excise duty for kerosene is sh.7.205,Super Petrol sh.19.895 and Diesel sh.10.305 Road Maintenance levy is sh.12 for super petrol and diesel 1.5% Railway Development Levy Petroleum Development Levy is 40 cents for kerosene,diesel and super petrol Margins are ksh.6.595 for kerosene,Super petrol sh.10.875 and Diesel 10.465 LPG Gas is VAT zero-rated. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Ericsson wrote:@Sparkly
Before disputing comments placed here please do a background research.
Taxes on petroleum products are as follows;
Value Added Tax
Excise Duty
Petroleum Development Levy
Road Maintenance Levy
VAT is at standard 16%
Excise duty for kerosene is sh.7.205,Super Petrol sh.19.895 and Diesel sh.10.305
Road Maintenance levy is sh.12 for super petrol and diesel
1.5% Railway Development Levy
Petroleum Development Levy is 40 cents for kerosene,diesel and super petrol
Margins are ksh.6.595 for kerosene,Super petrol sh.10.875 and Diesel 10.465
LPG Gas is VAT zero-rated. My source is VAT Act 2013, commencement September 2013. What is your source? Quote:SECTION B – EXEMPT GOODS ON TRANSITION
The following goods shall be exempt supplies for a period of three years from the commencement of this Act unless the exempt status of the supplies is earlier revoked.-
2709.00.00 Petroleum oils and oils obtained from bituminous minerals, crude.
2710.12.10 Motor spirit (gasoline) regular
2710.12.20 Motor spirit (gasoline), premium.
2710.12.30 Aviation spirit
2710.12.40 Spirit type jet fuel.
2710.12.50 Special boiling point spirit and white spirit.
...
Life is short. Live passionately.
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Rank: User Joined: 8/15/2013 Posts: 13,236 Location: Vacuum
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Ericsson wrote:@Sparkly
Before disputing comments placed here please do a background research.
Taxes on petroleum products are as follows;
Value Added Tax
Excise Duty
Petroleum Development Levy
Road Maintenance Levy
VAT is at standard 16%
Excise duty for kerosene is sh.7.205,Super Petrol sh.19.895 and Diesel sh.10.305
Road Maintenance levy is sh.12 for super petrol and diesel
1.5% Railway Development Levy
Petroleum Development Levy is 40 cents for kerosene,diesel and super petrol
Margins are ksh.6.595 for kerosene,Super petrol sh.10.875 and Diesel 10.465
LPG Gas is VAT zero-rated. There was no VAT, you should also stop arguing for the sake of an argument/debate If Obiero did it, Who Am I?
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Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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Ericsson wrote:Oil prices globally hit rock bottom last week and now are on an upward trend.
It gained 10% last week Thursday and Friday. ...i do agree.. http://www.bbc.co.uk/new...minute&co_dimension^width=629&co_dimension^height=190 but trend is not supported by any fundamentals hence not sustainable... my views thou.... ..desire to succeed is always fighting with fear of failure..
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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@sparkly and Swenani Read between the lines before you commenting Petroleum products have always been VAT.Show me the law/act that abolished VAT on the products. From as far as 2005 there was VAT on gasoline premium and regular @Sparkly read that ACT keenly the statement that says "unless the exempt status of the supplies is earlier revoked".- Read this statement on the article posted below National Treasury Cabinet Secretary Henry Rotich said the three-year tax holiday currently enjoyed by oil products expires on September 2, 2016 under the new VAT Act (2013). Among these products are motor spirits, aviation spirit, jet fuel, kerosene, and gas oil. http://www.businessdaily...42/-/5cnnvn/-/index.htmlWealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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definition of gas oil "Gas Oil (also known as Red Diesel, 35 Second Burning Oil and Tractor Diesel) is a liquid fuel product used for off highway machinery. The fuel contains a red dye to identify it as it carries a lower duty than regular White Diesel." Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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To sum it up let's wait for september to see the changes. I debated here that super petrol wasn't going to be affected by the new excise duty but that was rubbished. Come November/December no change in super. Before posting something here research is done;we are not in the business of arguing for the sake of arguing but enlightening people. The kenyan law you don't just read kijuu juu get the full meaning of the details. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Ericsson wrote:To sum it up let's wait for september to see the changes.
I debated here that super petrol wasn't going to be affected by the new excise duty but that was rubbished.
Come November/December no change in super.
Before posting something here research is done;we are not in the business of arguing for the sake of arguing but enlightening people.
The kenyan law you don't just read kijuu juu get the full meaning of the details.
now @ericsson, its not just arguing for the sake of it, Gok is playing its cards smart. where do you think money for construction of the pipeline to trukana will come from. there exist road maintenance levy fund(RMLF), if you drive a hybrid vehicle you are already committing an offence. so there will also be Trukana crude oil pipeline construction fund (TCOPCF) and then the pay check of the crude oil will vanish into a biddless blackhole. and there will be even fund for construction of the refinery since the COW refused to milk. sit tight and wait, the experience will be monumental and excruciating. hakuna petroli kwa pump will be ordinarily, the folks talk by then. ,Behold, a sower went forth to sow;....
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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muandiwambeu wrote:Ericsson wrote:To sum it up let's wait for september to see the changes.
I debated here that super petrol wasn't going to be affected by the new excise duty but that was rubbished.
Come November/December no change in super.
Before posting something here research is done;we are not in the business of arguing for the sake of arguing but enlightening people.
The kenyan law you don't just read kijuu juu get the full meaning of the details.
now @ericsson, its not just arguing for the sake of it, Gok is playing its cards smart. where do you think money for construction of the pipeline to trukana will come from. there exist road maintenance levy fund(RMLF), if you drive a hybrid vehicle you are already committing an offence. so there will also be Trukana crude oil pipeline construction fund (TCOPCF) and then the pay check of the crude oil will vanish into a biddless blackhole. and there will be even fund for construction of the refinery since the COW refused to milk. sit tight and wait, the experience will be monumental and excruciating. hakuna petroli kwa pump will be ordinarily, the folks talk by then. Wish it happens before 2017 just before elections
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