BP Fails to Meet E10 Bio-fuel Quota, Passes the Fail On to Customers

 

The presence of ethanol/biofuel additives to pump gas percentage of bioethanol in fuelhas been a hotly debated topic in recent months – particularly so for the petroleum giant BP, which is facing down fines in excess of $500 million for having failed to meet its EU sale quota for E10 gasoline.

E10, of course, is a blend of gasoline that includes approx. 10% bio-ethanol in the mix, which we in the US have been driving on for several years. BP, being a company that exists (essentially) to drill for oil, has a vested interest in making sure biofuels don’t “go big”, so it should come as no surprise that the company didn’t push to meet its E10 goals. What was surprising to me, however, is that BP has (pretty openly!) come forward and simply said that they don’t want to bear the cost of the fines leveled against them, and will shift the payment of its fines directly onto its customers at the pump!

Perhaps I shouldn’t be surprised. After all, if BP didn’t let a massive oil spill in the Gulf of Mexico dent their profits, it isn’t really out of character to expect that they’d maintain that attitude by letting their customers pay their fines for them.

No word yet on how much BP will “mark up” their fine collections – but expect an additional 5-10% over and above what’s “necessary”. (at least! – Ed.)

Source | Image: Autobild.





About the Author

spent 7 years living in Germany and Japan, studying both languages extensively, doing translation and education with companies like Bosch, Nissan, Fuji Heavy, and others. Charis has a Bachelor of Science degree in biology and currently lives in Chicago, Illinois. She also believes that Janeway was the best Star Trek Captain.

  • Well duh.
    That’s the basics of business around the world.
    Pass the buck.
    If it’s not passing on the fees it’s reducing the work force, using cheaper (not always better) parts, or moving to other countries (where said laws and regulations and or work force ‘financing’ issues don’t exist).

  • Frankly, I don’t see how that’s possible unless one of two conditions are met:
    1) BP gas stations are not anywhere near competitors’ stations.
    2) People some how value BP gasoline more than they do other oil companies’ gasoline.

    Number 1 is definitely not true where I live (NM) or in OH where I regularly visit my family. I have a hard time believing number 2 as well, beyond a few fringe loyalists.

    If they raise their prices to “shift the payment of its fines directly onto its customers at the pump”, people will simply go to the station across the street. Gasoline is one of those commodities where pennies/gallon matter. BP knows this, so I suspect it was either a bluff to try to play the politics of the situation (“If you fine us, gas prices will just go up and you’ll have a harder time getting re-elected”), or the author of this story got the facts a bit twisted.

    • Here’s how it’s possible: gas companies do serious price-fixing. BP raises its price $0.05, the Shell owner across the street reads his sign and sets his price $0.04(99) higher, but still (visually) lower than BP. No one notices, no one cares, they just continue pouring dino-juice into their penis-extenders Porsches and pick-ups.

      • ziv

        http://www.gasbuddy.com/
        Gasbuddy and others are the reason I don’t understand BP customers. They can find cheaper gas just blocks from a BP station, but they still go to BP.

  • ziv

    No surprise that BP won’t eat the fines. It is like trying to raise the tax rate for corporations, they don’t pay the extra taxes, they pass them on to consumers. Price is just one factor among many in most business transactions. (Admittedly, though, gas prices are one of the few commodities that are listed in foot high numbers so you can see them from outside the business)
    BP has always been the most expensive gas (by a nickel or more, usually) in northern Virginia, but that doesn’t seem to matter, they always seem to have the same amount of cars fueling as Exxon, Shell and Liberty. Why is that? I have no idea.

    • I think most people just don’t think about things. If they did, no one would own an iPhone (my opinion).

  • I would agree with the other posters. Any business would you pass along a fine, or any other loss, to customers if it didn’t hurt their bottom line, in fact all business do that. Gm does that, Boeing does that and on and on.

    Those that have too many losses (fines, fires, thefts, workforce strikes, unpopular product lines, whatever) eventually lose out because they can’t offer the best price to consumers. BP is big enough to weather what appear to be big losses because they are in reality a very small percentage of total revenue.

    • That’s a given, but that’s not the issue here at all. BP is a bunch of sniveling hypocrites, spouting off about their commitment to sustainability and alternative fuel development on their corporate site (http://www.bp.com/sectionbodycopy.do?categoryId=3311&contentId=7066754), in their ads, and IN THEIR FREAKIN’ LOGO – and, all that time, they’re simply not doing it. It would be one thing if they just came out and said “F*** the Earth. I want money.” At least then they’d be respectable – as it is, they’re a bunch of cowards hiding behind PR and spin to keep the public thinking “something is being done”, and if you buy that any of that is true, you’re a fool.

    • “…BP, being a company that exists (essentially) to drill for oil, has a vested interest in making sure biofuels don’t go big…”

      Actually not. BP’s business model is the provision of liquid fuel for the internal combustion engine. They also sell a lot of natural gas. If ethanol ever becomes economically viable, oil companies will own all ethanol production. They don’t care what liquid fuel they profit from. They could buy out every ethanol refinery on the planet with their pocket change.

      Not to mention, bio-ethanol is worse for the environment than oil in most cases.

  • Will GM corn fuel ethanol, Big oil refiner and Government motors welfare, affect the beef?

  • Get food out of my gas

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  • John Riggott

    I have just received this GAS information today 22nd of April 2012, I am not surprised that anybody has followed this line of thinking (that I have read above)…I am English, I have worked in the USA…in Boeing and in other Aviation companies, before this I worked in IMPERIAL OIL of LA….my experience and opinion is that the citizens of the USA have been fortunate to live in a society that paid very little for gasoline, in Europe the prices have always been very much higher, so we Europeans have a different atitude to almost everything ,,,1. first we consisder the quality of the product that we are buying….no matter what it may be, I live near to Seville in Spain, and the best quality Gasolina is sold in the BP stations, also here it is not the most expensive. I imagine that the people critisised in the USA for buying BP are the same who buy Mercedes Cars or Toyota car, maybe because they are conserned by QUALITY.

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