Follow by Email

Sunday, February 27, 2011

Rising Fuel Costs, Causes Rising EVERYTHING Costs

Companies concerned

Hey folks,

As we keep talking about in the Tuesday "From the Energy Front" Segment, the rising Energy costs will cause EVERYTHING to go up. The Cost of EVERYTHING will increase to match, or offset if you will, the rising cost to:

Power the Plant
Run the Machines
Transport the Product
SELL the Product

So that $5.00 item becomes $7.00. The higher the cost of Energy, Gas, and Diesel, goes, so does the cost of that Item. $7.00 then $8.00, you get the point. Remember that piece about the bitter cold, and repeated heavy Snowstorms, the Obama caused Skyrocketing prices for Heating Oil, that are likely to be the highest on record? Who is the hardest hit? The Poor and the Elderly. Those on fixed incomes.

We are not the only ones concerned about this. According to the Financial Times - Companies concerned about rising fuel costs By Ed Crooks in New York Published: February 25 2011 19:24 Last updated: February 25 2011 19:24

Companies around the world have begun to warn about the impact of higher fuel costs on their businesses, raising fears about profits and inflation.

Companies in the most energy-intensive sectors, such as airlines, have been the first to raise the alarm, but analysts warned that a sustained period of high oil prices would have a widespread effect on earnings.

On Friday, Thai Airways, the state-controlled carrier, said that it would have to review its revenue targets to assess the impact of the rise in oil prices.

International Airlines Group, the owner of British Airways and Iberia, said it was “likely” that fares would rise again, following fuel surcharges already imposed, if the volatility in oil markets continued.

US airlines have already been raising fares. At the start of the year, analysts at Bank of America Merrill Lynch calculated that US airlines could still achieve the same operating margins this year as in 2010, even if oil prices averaged about $102 per barrel. US crude briefly exceeded that level on Thursday.
However, the Airlines are not the only ones worried.

FedEx, the transport and delivery company, said last week that its third-quarter earnings, to be reported on March 17, were likely to be lower than previously indicated because of higher fuel costs and bad weather.

The car industry is also likely to be feel the impact of higher oil prices, particularly in the US.
Now WHY is that? Because we are not Drilling. Everyone else is. Foreign Companies are buying up US Companies rights and assets. All for a Political Stunt by Obama.

General Motors and Ford, the US car manufacturers, reported fourth-quarter earnings hit by higher costs for materials, including metals and rubber, and now face a further blow.

The US companies remain heavily dependent on pick-up trucks and SUVs, by far their most profitable vehicles, leaving them exposed when fuel costs rise and consumers look for more economical vehicles.

Daniel Akerson, GM’s chief executive, said on Thursday: “Energy is going to be more expensive, so we’ve got to prepare for that and it’s come a little bit earlier maybe than the industry or the economy  . . . expected or wanted, so we’re going to have to react.”
And HERE it is folks. That unspoken business secret, actually SPOKEN. Get this.

Not every company is yet being squeezed by the higher oil price. Jürgen Hambrecht, chief executive of BASF, the world’s largest chemicals company by market capitalisation, said on Thursday the group had been able to pass on most of the price hikes to its customers in the past year, and it was expecting to do so again.
The Truth is folks, Businesses and Corporations do not pay tax. YOU do. You want their goods and services, YOU will pay. I'll give Jürgen Hambrecht an A for Honesty. "How do you feel about the rising Energy costs?" Hambrecht, "We don't care. We just pass on most of the price hikes to its Customers. So who cares?" However, there is a limit. Someone may pay $7.00 for something that was $5.00. However, they are NOT going to pay $10.00. There is a limit as to what a product or service is worth. THAT is what they are afraid of.

Dow Chemical of the US similarly talked about “pricing momentum”, and only a “slight, and temporary” squeeze on margins, when it reported full-year results earlier this month.

However, the damping effect of higher fuel prices on economic growth in oil-importing countries is likely to mean that the impact will in time be felt across most industries.

Martin Regalia, chief economist at the US Chamber of Commerce, the business lobby group, said high oil prices had a “double whammy” effect.

“They raise costs for all companies, particularly those that use a lot of oil to move stuff around in trucks or aircraft, and they slow down growth because they take spending power away from consumers. And both of those factors work together to reduce profitability.”

Additional reporting by Bernard Simon in Toronto, Daniel Schäfer in Frankfurt and Jeremy Lemer in New York
Folks, there is no reason for any of this. NONE. I just saw an article that, let me see if I can find it, yeah, here it is, it's from CNS NEWS - New Study Shows That Offshore Drilling Could Make Alaska the Eighth Largest Oil Producer in the World – Ahead of Libya and Nigeria

(CNSNews.com) – A new study says drilling on Alaska’s Outer Continental Shelf (OCS) could make Alaska the eighth largest oil resource province in the world -- ahead of Nigeria, Libya, Russia and Norway.
But we are not Drilling. Why? There can be only one real reason. Obama and Crew are preventing us from doing so, INTENTIONALY, bringing about what we have here today. It's being done ON PURPOSE. The answer is so simple folks. It really is.
Peter

Sources:
Financial Times - Companies concerned about rising fuel costs
CNS NEWS -
New Study Shows That Offshore Drilling Could Make Alaska the Eighth Largest Oil Producer in the World – Ahead of Libya and Nigeria

No comments: