Who Gets What From Imported Oil - 2009 - OPEC
8
July 2009
description
Who gets what from imported oil - 2009, published by OPEC
Transcript of Who Gets What From Imported Oil - 2009 - OPEC
Tax
Industry marginIncludes transport,insurance and other costs
Crude fob priceIncludes cost of productionand other related expenses
Note:One barrel equals 42 US gallons, or 159 litres
Source: OPEC Research Division, 2007, based on data from:1. OECD, Energy Prices and Taxes 2. Oil Bulletin Petrolier3. Energy Detente
Composite barrel analysisfor major consuming countries
in nominal dollars per barrel 2002–2006
For more OPEC publications
contact:PR & Information Department
Tel: +43 1 211 12-279Fax: +43 1 214 9827E-mail: [email protected]: www.opec.org
Organization of the Petroleum Exporting CountriesObere Donaustraße 93, A-1020 Vienna, Austria
April 2007
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July 2009
Introduction
There are still many misconceptions surrounding
crude oil prices and the prices of products made
from oil, such as gasoline.
The consumer
As every driver knows, filling up a tank can
be an expensive business. What is not generally
known is just where most of that money goes.
The graph on the right is intended to shed some
light on this.
It shows that there are wide regional variations in
product prices, and that these are not due to
differences in crude prices, but to widely varying
levels of taxation in the consuming nations of the
G7 (Canada, France, Germany, Italy, Japan, the UK
and the USA). These can range from relatively
modest taxes (although by no means insignificant)
in the USA and Canada, to very high levels in many
European countries. In the UK, for example, the
government receives around 1.7 times more from
taxation than OPEC gets from the sale of its oil.
Let’s take a closer look at the figures.
The first of the two graphs on the left shows
that over the period 2002–2006, the G7 nations
Tax
made a total of US$2,310 billion from oil taxation.
This compares with the revenue of just
US$2,045 billion for the OPEC Members over the
same period. In addition, while the US$2,310
billion in oil taxation by the G7 is pure profit, this
is not the case for the OPEC nations, who must
meet the cost of finding, producing and
transporting that oil from their US$2,045 billion
income.
The second graph on the left shows the annual
averages over that five-year period. While the
OPEC nations averaged US$410 billion per year
in sales revenue, the G7 countries raked in
US$460 billion per year in taxes — around US$50
billion per year more than OPEC. Thus, it is clear
that the real burden on the consumer is taxation
in the consuming countries.
If gasoline were not so heavily taxed in countries
such as France, Germany, Italy, Japan and the
UK, it would cost only a fraction of the current
price. More details are shown in the country-by-
country graphs over the page.
Wherever you live, that’s something to think
about next time you stop to fill up your tank.
Industry marginIncludes transport, insurance and other costs
Crude fob priceIncludes cost of production and other related expenses
Who gets what from a litre of oil in the G7?
Source: Research Division, OPEC, Vienna, Austria, 2007
Taxes versus revenue
Notes:1. Figures are estimated prices in US dollars per litre for the year 20062. Unleaded premium (95 RON) gasoline for France, Germany, Italy, UK; regular unleaded gasoline for Canada, Japan and USA
Source: Research Division, OPEC, Vienna, Austria, 2007
2,310 billion US$ 2,045 billion US$2,500
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1,500
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500
0Estimated total
G7 oil taxes2002–2006
Estimated totalOPEC oil revenue
2002–2006
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460 billion US$ 410 billion US$
Estimated average annual G7 oil taxes
2002–2006
Estimated averageannual OPEC oil revenue
2002–2006
Germany
0.0 0.25 0.50 0.75 1.00 1.25
US$/Litre
USA
Canada
Japan
France
Italy
UK
Introduction
There are still many misconceptions surrounding
crude oil prices and the prices of products made
from oil, such as gasoline.
The consumer
As every driver knows, filling up a tank can
be an expensive business. What is not generally
known is just where most of that money goes.
The graph on the right is intended to shed some
light on this.
It shows that there are wide regional variations in
product prices, and that these are not due to
differences in crude prices, but to widely varying
levels of taxation in the consuming nations of the
G7 (Canada, France, Germany, Italy, Japan, the UK
and the USA). These can range from relatively
modest taxes (although by no means insignificant)
in the USA and Canada, to very high levels in many
European countries. In the UK, for example, the
government receives around 1.7 times more from
taxation than OPEC gets from the sale of its oil.
Let’s take a closer look at the figures.
The first of the two graphs on the left shows
that over the period 2002–2006, the G7 nations
Tax
made a total of US$2,310 billion from oil taxation.
This compares with the revenue of just
US$2,045 billion for the OPEC Members over the
same period. In addition, while the US$2,310
billion in oil taxation by the G7 is pure profit, this
is not the case for the OPEC nations, who must
meet the cost of finding, producing and
transporting that oil from their US$2,045 billion
income.
The second graph on the left shows the annual
averages over that five-year period. While the
OPEC nations averaged US$410 billion per year
in sales revenue, the G7 countries raked in
US$460 billion per year in taxes — around US$50
billion per year more than OPEC. Thus, it is clear
that the real burden on the consumer is taxation
in the consuming countries.
If gasoline were not so heavily taxed in countries
such as France, Germany, Italy, Japan and the
UK, it would cost only a fraction of the current
price. More details are shown in the country-by-
country graphs over the page.
Wherever you live, that’s something to think
about next time you stop to fill up your tank.
Industry marginIncludes transport, insurance and other costs
Crude fob priceIncludes cost of production and other related expenses
Who gets what from a litre of oil in the G7?
Source: Research Division, OPEC, Vienna, Austria, 2007
Taxes versus revenue
Notes:1. Figures are estimated prices in US dollars per litre for the year 20062. Unleaded premium (95 RON) gasoline for France, Germany, Italy, UK; regular unleaded gasoline for Canada, Japan and USA
Source: Research Division, OPEC, Vienna, Austria, 2007
2,310 billion US$ 2,045 billion US$2,500
2,000
1,500
1,000
500
0Estimated total
G7 oil taxes2002–2006
Estimated totalOPEC oil revenue
2002–2006
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460 billion US$ 410 billion US$
Estimated average annual G7 oil taxes
2002–2006
Estimated averageannual OPEC oil revenue
2002–2006
Germany
0.0 0.25 0.50 0.75 1.00 1.25
US$/Litre
USA
Canada
Japan
France
Italy
UK
Notes:Figures are estimated prices in US dollars per litre for the year 2008.Industry margin includes transport, insurance and other costs.Crude fob oil price includes cost of production and other related expenses.
Source:Research Division, OPEC , Vienna, Austria, 2009.
Graph 1:Who gets whatfrom a litre of oil in 2008?
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USA
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Japan
France
Italy
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$/litre
Tax
Industry margin
Crude fob price
As every consumer knows, purchasing petroleum products can be expensive. But what is not gener-ally known is where most of that money goes.
Graph 1 illustrates the wide variations in the price of a litre of oil in G-7 countries. Those variations are not due to differences in crude oil prices but to varying levels of taxation in those consuming nations (e.g., Canada, France, Germany, Italy, Japan, the UK and the USA). These taxes can range from relatively mod-est (although by no means insignificant) in Canada and the USA, to very high levels in many European countries.
In the UK, for example in 2008, the government re-ceived around 1.8 times more from taxation than what OPEC Member Countries obtained from the sale of their oil.
Graph 2 shows that over the period 2004–08, the G-7 nations received a total of $3,418 billion from oil taxation. OPEC Member Countries, on the other hand, received just $3,346 billion in total revenues over the same period.
Many misconceptions surround crude oil prices and the pricing of petroleum derivatives such as gasoline. This brochure illustrates and explains exactly who gets what from the price of oil.
But while the $3,418 billion generated by G-7 govern-ments from oil taxation is pure profit, the same can-not be said of the revenues received by OPEC Member Countries, which must cover the high costs of explo-ration, production and transportation.
Graph 3 shows the annual average revenues of G-7 and OPEC Member Countries over a five-year period. While OPEC Member Countries generated an average of $669 billion per year from oil sales, the G-7 countries received an average of $684 billion per year from oil taxation — about $15 billion more per year than OPEC Member Countries.
Thus, it is clear that the real cost burden on end-users is from the oil taxes imposed by consuming countries.
If oil were not so heavily taxed, then it would certainly cost only a fraction of its current price. Graph 4 (on the reverse) gives a country-by-country break-down of the nominal costs of each barrel of oil in G-7 coun-tries, relative to oil taxes and industry margins, for the 2004–08 period.
Wherever you live, the role of government taxes on the price of oil and oil products is something to think about.
Graph 2:Taxes vs. revenue
Graph 3:Average taxes vs. revenue
$3,418 billion $3,346 billion
Estimated totalG-7 oil taxes
2004–08
Estimated totalOPEC oil revenue
2004–08
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Estimated averageannual G-7 oil taxes
2004–08
Estimated averageannual OPEC oil revenue
2004–08
$684 billion $669 billion
$3,418 billion $3,346 billion
Estimated totalG-7 oil taxes
2004–08
Estimated totalOPEC oil revenue
2004–08
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Estimated averageannual G-7 oil taxes
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Estimated averageannual OPEC oil revenue
2004–08
$684 billion $669 billion
Note:One barrel equals 42 US gallons, or 159 litres.
Graph 4:Composite oil barrel analysisfor G-7 countries(in nominal dollars per barrel)
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Sources:OPEC Research Division, 2009,, based on data from: OECD, Energy Prices and Taxes; Oil Bulletin Petrolier; Energy Detente.
Tax
Industry marginIncludes transport, insurance and other costs
Crude fob priceIncludes cost of production and other related expenses
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