why cant Shell and others absorb price rise?

[Ceci03]

I don't understand - can someone explain. Shell etc announcing billions in profit, yet they cannot be asked to absorb any of the price increases? Am I thick or what's going on.

@WeirdlyKind

The big wigs might only be able to afford one super yacht. I just don't know how they'll cope.

Not sure people here fully understand the difference between publicly listed companies and privately owned ones.

Well most British pension funds would have Shell in it, so someone's pension (yours?) would be going down to give you slightly cheaper fuel.

@VladmirsPoutine

I said to someone the other day that energy should be a human right and not a profit-making endeavour. You'd have thought I said I like to brush my teeth with sewage water from their reaction.

Yeah but almost every Brit wastes lots of energy as it is. If you start giving it away, that would be even worse for the environment.

Shell etc are private companies. Their primary loyalty is to their shareholders not their customers.

The government could lock the price hikes, the thing is that they don't want too.

You're saying that they can't be asked to absorb the price increases. But why can't they? No harm in asking I suppose (though the answer would probably be in the negative)!

I wonder if anyone actually has tried asking them?!

Not that simple. While Shell make plenty of profit, a relatively small percentage of each transaction is profit and instead they just turnover huge amounts. As such, even a fairly small increase in oil cost would wipe out their profit if they didn’t increase costs.

They could of course reduce their profit margin, but it wouldn’t have the dramatic impact on petrol costs many would expect.

The reason 'people' (as PP say, mostly pension and insurance plans) buy shares is to get some return on their money, same as anyone starting a business, or putting money in a savings account, or buying Bitcoin or buy-to-let property. It's a system which allows those who have money to let others use it to generate more and increase the country's wealth, provide jobs, goods and services. If the company whose shares they hold stop paying competitive dividends, they pull their money (as their pension-holders would hope) and put it elsewhere (maybe property, leading to a rise in house prices).

That would leave the company unable to operate properly - pay wages, buy and maintain equipement, etc and then we wouldn't have an experienced and respected oil company providing and refining our oil. In the last resort the government would almost certainly step in. Hands up who thinks our government would be better at running an oil company than the guys with years of experience. Clue, look at Communist command economies.

Don't buy Shell

The biggest shareholders in oil and petrol companies are pensions, which are usually just normal people like you and me, not necessarily rich billionaires.

This talk of the "rich" and the "shareholders" - large swathes of shareholders are pension schemes. ie most of us. Companies have to act in the best interests of the shareholders by law. They can't just give money away.