Quote:
Originally Posted by Bring_Back_Shantz
Dude, that's not how commodities work.
Oil companies don't decide what they sell their product for, they can't pass costs on to their customers, they get paid what the market is buy oil for.
Besides, Shell isn't the one who is paying a carbon tax on what they produce, they are paying a carbon tax on what they burn to produce it.
If Shell's (or anyone else for that matter) cost goes up because they are using fuel to produce their product, they can't say "well we'll just sell our oil for $x more" they have to eat those costs and it goes straight to their bottom line.
If you're talking about a carbon tax on say gasoline, then yeah, that gets passed on to the consumer because you're the end user/the one being taxed. Saying they are going to pass it on to the consumer is like saying they are going to pass on the cost of GST.
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Shell and all of the other majors will be able to pass along costs through their downstream arm. They will all have to pay any new carbon tax implemented anywhere. Gas prices will just go up as their production costs go up.