-Hannah Mead, MCPP Intern, 2008

Warren Meyer (Coyote Blog) rips into a new EU proposal to staunch fuel prices. The whole post is marvelous and well worth reading. However, I found his debunking of a misreported fact to be crucial:

I was amazed at the statement that BP made net profits of 63.4%.  It took me a while to figure out that this was the quarter over quarter profit growth, not the profit margin.  I can’t tell if these guys are just ignorant or if this is a translation issue into English, so i will give them the benefit of the doubt.  In case you are wondering, BP’s net profit margin in the first quarter of 2008 was 8.3% of revenues, which in the grand scheme of industry is actually below average.

[Note: Commenter Sameer Parekh corrects Meyers' figures a bit, taking into account the taxes on BP.]

That makes a big difference! I mean, even I was getting a little disapproving of BP when I read the bill’s statement that the company was making off like a bandit. It goes to show how important statistics are, and why so many people are so irritated with the oil industry.

He continues to cut down the economic illogic:

One reason fuel prices are so high in Europe is because the government takes more than half of fuel revenues in taxes:

Fuel taxes are also the central issue for truckers in Europe, because they account for a large portion of the retail price of fuel. Unleadedgasoline sold for $8.65 per gallon and diesel for $9.62 per gallon Tuesday in Britain, which charges a flat $3.77 per gallon in fuel duty and imposes a 17.5 percent consumptiontax on the total price

So, 61% (44% from the $3.77 plus the 17.5%) goes to government and 8.3% goes to the BP shareholders.  So lets tax BP shareholders more to lower the price!

[Note: Parekh again alters these figures slightly.]