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[S1164]Supply And Demand Tax
by Ellango Narayanan, Ell
The Soaring Oil prices although justifies the fluctuation in the pricing of bitumen, there is not an established mechanism to derive the bitumen price till date. The bitumen market is getting mature and liquid. The majority of the exporting nations include Singapore, Iran, Saudi Arabia, Egypt, Thailand in this region has different inputs and the range varies significantly.

Recently the Cartel led by Shell was exposed by the European regulators and the was fined to the tune of price fixing on various petroleum products.

For Bitumen, there are no posted prices except for some compiled prices from some paid subscription services ; marketers rely on a number of pricing formulas that reference various posted crude qualities.

Market pricing is seasonal with higher prices during peak season like summer being the norm due to higher demand for bitumen and other bitumen derived products.

Saudi arabia has almost banned the export of Bitumen 60/70 , which considered as the raw material, obtained from the fractional distillation process, from Saudi Aramco . The penetration grade bitumen 80/100, prepared from the aforesaid raw material by adding additives, is the value added , before being exported. The price sensitive Saudi bitumen industry, an unorganized industry, commands the most market value among the third world countries including India, Pakistan and Bagladesh.

On the Other hand, Iran is trying to sell the bitumen through Iran Mercantile Exchange, as a commodity and the pricing currency is being slowly shifting in favrour of Euro.

Singapore, Malaysia, Thailand, although except for Singapore, the rest of the regional economies , being net importer, the pricing is closely followed with each other, and which is not affordable for re-export for the developing nations.

By necessity, bitumen is regularly blended with diluent (typically in the form of C5+ or synthetic light crude) in order to facilitate its transportation via pipeline to tankers.

As such, the effective field price for bitumen is also directly impacted by the input cost of the diluent required, the demand and price of which is also seasonal in nature (in winter as colder temperatures necessitate more diluent for transportation).

Consequently, bitumen pricing is notoriously high in summer and during major shutdown by the refineries and not reflective of the annual average realized price or the economics of the business overall.

The strong bitumen demand disturbs the effective field prices during peak season for a variety of reasons. In addition to the usual seasonal issues, increase in bitumen demand and the premium for diluent was significant as a consequence of various events such as production interruptions at a regional refinery.

With billions of barrels of potential and billions of dollars of planned capital investment, the bitumen resources are widely understood to be a cornerstone of future energy requirements and are attracting notable attention from overseas jurisdictions as well.

In fact, the adoption of the proposed methodology for all crude qualities would have little or no effect on reported proved reserve quantities for all categories, bitumen excepted. For no other reason than bitumen alone is subject to the extreme seasonality in realized prices around calendar.

Some industry watchers propose to determine the constant price for bitumen by using, for the benchmark reference price, the published price for the crude oil after applying historical adjustments for transportation and for quality, which create the price differential between crude oil and bitumen.

Tax laws in most countries are exceedingly complex and open to interpretation by the courts. Every taxpayer wants to legally reduce the taxes he or she pays to the minimum. Even in these days of more easily understood forms there is still lots of scope for interpretation of tax laws.

Government tax raising departments like the IRS employ highly paid attorneys to persuade the courts in favor of the government's interpretation of tax laws. The more persuasive an attorney has proved to be the more they can charge. The IRS attorneys are paid from the bottomless pocket of the taxpayer, so they only employ the best and most persuasive people.

The individual or company taxpayer has only one option – to employ a tax attorney themselves.

Your attorney will mediate between you and the IRS and help you to reach a negotiated settlement. Where disputed amounts are large, it is usual for the taxpayer to reach a negotiated settlement for a much smaller amount than the original claim. This is why people employ tax attorneys. If the case goes to court then you will be represented and have the best advice available, a much better position to be in than facing the might of government alone.

There are so many complexities to every tax system because of the cumulative effect of thousands of pressure groups over the past 200 years. Each group manages to persuade the government of the day that they will get more votes if they accede to the group's demands. The government acquiesces and another complexity is added to the tax regime.

Many of these pressure groups' demands could be reversed, but that would require immense political courage, which is not present in most democratically elected politicians.

Article Source : Investing In Mutual Funds

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Both Ellango Narayanan & Pearl Deloria are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Ellango Narayanan has sinced written about articles on various topics from Science, Food And Drink and Investing and Trading. . Ellango Narayanan's top article generates over 1600 views. to your Favourites.

Pearl Deloria has sinced written about articles on various topics from Credit Cards, Management and Business Loans. Pearl Deloria has an SME management background. Find more articles . Visit these sites for more info. Pearl Deloria's top article generates over 49500 views. to your Favourites.
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