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I see a lot of governments in Europe subsidizing gasoline but at the same time I hear of record profits for oil companies. At what point are we (the tax payer)

I see a lot of governments in Europe subsidizing gasoline but at the same time I hear of record profits for oil companies. At what point are we (the tax payer) directly paying for those profits? This seems like an absolute perversion of capitalism where on one side "free" markets allow for such prices and on the other side the government is giving tax money to those same companies. Again we seem to have a trickle up economy. This can't go on forever.

xeromal 4y ago
You're in to something, but the goverments hands are tied because of how much transportation needs fuel. If they don't stave it off, you'll just be "taxed" in good costs.
- NumberWangMan 4y ago
  Hmm, but higher prices for goods whose production or transportation is fuel intensive would allow and encourage us to adjust our habits to avoid or find greener substitutes for those goods. What we're doing by subsidizing fuel is essentially the opposite of a carbon tax, actively worsening greenhouse gas emissions.
  - xeromal 4y ago
    Yeah, I do think you're right to an extent, but I think everyone has to be ok with that pain while things change. That's the difficulty.
Proven 4y ago
[dead]
credit_guy 4y ago
> This seems like an absolute perversion of capitalism You are criticizing capitalism for the sins of socialists. Capitalists never advocate for subsidies.
- sky-kedge0749 4y ago
  Oil companies routinely and vigorously advocate for subsidies. If oil company owners aren't capitalists then I don't know who is.
  - credit_guy 4y ago
    Is that a fact? In what country?
    - sky-kedge0749 4y ago
      Try searching for "fossil fuel subsidies", "fossil fuel lobby" and so on. There are many examples.
      - credit_guy 4y ago
        Aren't you moving the goalposts? The OP was complaining specifically about European governments subsidizing the price of gasoline (at a time when oil companies have record profits). You then start claiming that these companies are lobbying for these subsidies, vigorously. You are now switching to "fossil fuel subsidies" in general. I know, I know, oil companies are bad and evil, but this was not what was being discussed here. The fact that the some European governments decided to subsidize gasoline is clear socialist move. It was not spurred by the oil lobby. Maybe capitalism has problems, but this is not one of them. This is a socialism problem.
        sky-kedge0749 4y ago
        I'm not sure what you're looking for. There's a lot of info out there about fossil fuel subsidies and fossil fuel lobbyists. If you have some particular subsidy in mind then you can research it yourself. Your claim > Capitalists never advocate for subsidies. was very broad and absolute, going beyond any particular industry or even the present day. I'm really not sure but maybe you meant something like "advocating for subsidies is not a capitalist thing to do." In any case I'm not personally interested in whether there is a "capitalism problem" or "socialism problem" going on.
gruez 4y ago
Can you expand on what "subsidizing" entails? Are they literally giving people discount vouchers to buy gasoline with? >This seems like an absolute perversion of capitalism where on one side "free" markets allow for such prices and on the other side the government is giving tax money to those same companies. agreed. this is a supply-side problem. it can't be solved by throwing more money on the demand side.
- londons_explore 4y ago
  > Are they literally giving people discount vouchers to buy gasoline with? Mostly no. They're doing things like giving some/all people a one-off €300 payment to help with increasing costs. Some governments are also reducing the taxes on fuels. As far as I know, no western government directly subsidizes fuels to consumers.
32423523523a 4y ago
> I see a lot of governments in Europe subsidizing gasoline but at the same time I hear of record profits for oil companies. At what point are we (the tax payer) directly paying for those profits? Fossil fuel subsidies are largely a myth. Don't believe me? Look at how the IMF defines "subsidy": https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021236-print-pdf.ashx https://www.imf.org/-/media/Files/Publications/WP/2021/Engli... > Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Efficient fuel pricing in 2025 A normal person would construe "subsidy" to mean a cash transfer from one party to another, not some difference between the price actually paid and what you think it should have been, based on some generous externalitites-based estimate. Even the IMF's definition of "explicit subsidy" falls far short of what we commonly construe "subsidy" to mean. I've seen things like LIFO (which firms in other industries can use as well) as a supposed fossil fuel subsidy that needs to be eliminated. As their "record" profits? They are nowhere near as profitable in absolute or relative terms to FAANG. Go compare their financial statements (they're mostly publicly traded) if you don't believe me.
- moistly 4y ago
  > A normal person would construe "subsidy" to mean a cash transfer from one party to another And tax breaks, and royalty breaks, and exemptions, etc.
- aaaaaaaaata 4y ago
  > A normal person would construe "subsidy" to mean any discount or accordance offered to provide an incentive toward particular courses of action a person or organization desires.
  - aaaaaaaaata 4y ago
    affordance*

xeromal 4y ago

You're in to something, but the goverments hands are tied because of how much transportation needs fuel. If they don't stave it off, you'll just be "taxed" in good costs.

NumberWangMan 4y ago
Hmm, but higher prices for goods whose production or transportation is fuel intensive would allow and encourage us to adjust our habits to avoid or find greener substitutes for those goods. What we're doing by subsidizing fuel is essentially the opposite of a carbon tax, actively worsening greenhouse gas emissions.
- xeromal 4y ago
  Yeah, I do think you're right to an extent, but I think everyone has to be ok with that pain while things change. That's the difficulty.

Proven 4y ago

[dead]

credit_guy 4y ago

> This seems like an absolute perversion of capitalism You are criticizing capitalism for the sins of socialists. Capitalists never advocate for subsidies.

sky-kedge0749 4y ago
Oil companies routinely and vigorously advocate for subsidies. If oil company owners aren't capitalists then I don't know who is.
- credit_guy 4y ago
  Is that a fact? In what country?
  - sky-kedge0749 4y ago
    Try searching for "fossil fuel subsidies", "fossil fuel lobby" and so on. There are many examples.
    - credit_guy 4y ago
      Aren't you moving the goalposts? The OP was complaining specifically about European governments subsidizing the price of gasoline (at a time when oil companies have record profits). You then start claiming that these companies are lobbying for these subsidies, vigorously. You are now switching to "fossil fuel subsidies" in general. I know, I know, oil companies are bad and evil, but this was not what was being discussed here. The fact that the some European governments decided to subsidize gasoline is clear socialist move. It was not spurred by the oil lobby. Maybe capitalism has problems, but this is not one of them. This is a socialism problem.
      - sky-kedge0749 4y ago
        I'm not sure what you're looking for. There's a lot of info out there about fossil fuel subsidies and fossil fuel lobbyists. If you have some particular subsidy in mind then you can research it yourself. Your claim > Capitalists never advocate for subsidies. was very broad and absolute, going beyond any particular industry or even the present day. I'm really not sure but maybe you meant something like "advocating for subsidies is not a capitalist thing to do." In any case I'm not personally interested in whether there is a "capitalism problem" or "socialism problem" going on.

gruez 4y ago

Can you expand on what "subsidizing" entails? Are they literally giving people discount vouchers to buy gasoline with? >This seems like an absolute perversion of capitalism where on one side "free" markets allow for such prices and on the other side the government is giving tax money to those same companies. agreed. this is a supply-side problem. it can't be solved by throwing more money on the demand side.

londons_explore 4y ago
> Are they literally giving people discount vouchers to buy gasoline with? Mostly no. They're doing things like giving some/all people a one-off €300 payment to help with increasing costs. Some governments are also reducing the taxes on fuels. As far as I know, no western government directly subsidizes fuels to consumers.

32423523523a 4y ago

> I see a lot of governments in Europe subsidizing gasoline but at the same time I hear of record profits for oil companies. At what point are we (the tax payer) directly paying for those profits? Fossil fuel subsidies are largely a myth. Don't believe me? Look at how the IMF defines "subsidy": https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021236-print-pdf.ashx https://www.imf.org/-/media/Files/Publications/WP/2021/Engli... > Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Efficient fuel pricing in 2025 A normal person would construe "subsidy" to mean a cash transfer from one party to another, not some difference between the price actually paid and what you think it should have been, based on some generous externalitites-based estimate. Even the IMF's definition of "explicit subsidy" falls far short of what we commonly construe "subsidy" to mean. I've seen things like LIFO (which firms in other industries can use as well) as a supposed fossil fuel subsidy that needs to be eliminated. As their "record" profits? They are nowhere near as profitable in absolute or relative terms to FAANG. Go compare their financial statements (they're mostly publicly traded) if you don't believe me.

moistly 4y ago
> A normal person would construe "subsidy" to mean a cash transfer from one party to another And tax breaks, and royalty breaks, and exemptions, etc.
aaaaaaaaata 4y ago
> A normal person would construe "subsidy" to mean any discount or accordance offered to provide an incentive toward particular courses of action a person or organization desires.
- aaaaaaaaata 4y ago
  affordance*