How about a oil consuming cartel?

[tvarad]

Personally I think that the pain of high oil prices is good because the world needs to be weaned away from the fossil fuel habit. But I also hate the obvious price-gouging that's going on here.

The pain of high oil prices affects all countries since your friendly neighborhood OPEC cartel charges the same for every country. There are fuel price-hike riots starting in India and other countries already.

So how about an OPCC (Organization of Petrol Consuming Countries). It will have a charter of negotiating the price of oil with OPEC at a price that is binding on all members. The stick would be a OPEC sales tax on goods and services sold to OPEC members that is proportional to what the world thinks should be the fair price of oil. You charge me $150 bucks a barrel, the sales tax on that Boeing 777 or Airbus A380 you're buying to jet your harem to Harrod's for the weekend shopping will be, say 100%.

I also think that a similar arrangement needs to be made with the few oilgarchies that control the distribution since it's obvious that they have become monopolistic through mergers and acquisitions that flew under the radar when oil prices were low.

What do you guys think? Feel free to add further conditions (ridicule is welcome too).

 

[SSSnail]

You can't until you get rid of the word CONSUMING in the organization's name. Well, if you could do that you wouldn't need a cartel, problems solved. I'm a genius.

 

[maverick44]

Originally posted by: tvarad
Personally I think that the pain of high oil prices is good because the world needs to be weaned away from the fossil fuel habit. But I also hate the obvious price-gouging that's going on here.

The pain of high oil prices affects all countries since your friendly neighborhood OPEC cartel charges the same for every country. There are fuel price-hike riots starting in India and other countries already.

So how about an OPCC (Organization of Petrol Consuming Countries). It will have a charter of negotiating the price of oil with OPEC at a price that is binding on all members. The stick would be a OPEC sales tax on goods and services sold to OPEC members that is proportional to what the world thinks should be the fair price of oil. You charge me $150 bucks a barrel, the sales tax on that Boeing 777 or Airbus A380 you're buying to jet your harem to Harrod's for the weekend shopping will be, say 100%.

I also think that a similar arrangement needs to be made with the few oilgarchies that control the distribution since it's obvious that they have become monopolistic through mergers and acquisitions that flew under the radar when oil prices were low.

What do you guys think? Feel free to add further conditions (ridicule is welcome too).

Okay ridicule first.

1) who would levy that tax. The United States where GE makes the turbines or europe where airbus is headquartered. What about tier-2 and tier 3 suppliers located in countries with no direct trade links to the OPEC. Remember supply down = workers loose jobs.

2) OPEC arent harming anybody but themselves and a lot of energy companies with "windfall" profits. When india and china remove oil subsidies there is going to be a HUGE demand response. Meaning a great drop in aggregate demand . At that point you will be forced to slash prices or watch those windfall profits turn into deep red ink.

 

[b0mbrman]

Originally posted by: tvarad
Personally I think that the pain of high oil prices is good because the world needs to be weaned away from the fossil fuel habit. But I also hate the obvious price-gouging that's going on here.

The pain of high oil prices affects all countries since your friendly neighborhood OPEC cartel charges the same for every country. There are fuel price-hike riots starting in India and other countries already.

So how about an OPCC (Organization of Petrol Consuming Countries). It will have a charter of negotiating the price of oil with OPEC at a price that is binding on all members. The stick would be a OPEC sales tax on goods and services sold to OPEC members that is proportional to what the world thinks should be the fair price of oil. You charge me $150 bucks a barrel, the sales tax on that Boeing 777 or Airbus A380 you're buying to jet your harem to Harrod's for the weekend shopping will be, say 100%.

I also think that a similar arrangement needs to be made with the few oilgarchies that control the distribution since it's obvious that they have become monopolistic through mergers and acquisitions that flew under the radar when oil prices were low.

What do you guys think? Feel free to add further conditions (ridicule is welcome too).

The point is that you have to be able to make good on your threats. If any country pisses off OPEC enough, they can cut off the flow of oil to that country.

If the oil countries pissed us off, would we be able to threaten that we wouldn't buy oil anymore?

 

[jackschmittusa]

b0mbrman nailed it. OPEC can do without our money for a lot longer than the world can do without their oil. Also likely they would make us pay a severe penalty for trying the bluff.

 

[tvarad]

Collective bargaining that unions use to wrest concessions are built on the same principle, right? If Europe, India, China and the U.S. (all of whom are equally affected by the oil price rise) form a oil consuming "trade union" and say "either sell to us at the price we set" or take a hike, who are they going to sell to? The bottom would fall out of the oil market.

 

[tvarad]

When Intel, Microsoft et. al. can be penalized for monopolistic practices in the U.S., Japan, Europe, South Korea etc., why shouldn't the same yardstick be applied to OPEC?

 

[Foxery]

Originally posted by: tvarad
When Intel, Microsoft et. al. can be penalized for monopolistic practices in the U.S., Japan, Europe, South Korea etc., why shouldn't the same yardstick be applied to OPEC?

Because those companies have to follow the laws in those countries. (i.e. where they do business)

We already had this thread, and it was the same logical fallacy: You can't enforce one country's policies upon another country or its businesses. That's why we HAVE independent countries. So they can each make and follow their own rules.

 

[yllus]

Rule of negotiation #1: Have the ability to walk away from the table. If you can't, then you shouldn't be at that table to begin with.

 

[Braznor]

The crude producers have their power over the production, its their hand that can turn off the oil supplies. However, the proposed oil consuming cartel will have no such bargaining chip upon the OPEC.

So if they cut off their supplies, what would you do to get it running again?

Invade? 😀

Haahahahahahahaaaaaaaaaaaaaaa