Chapter 11- France - Oil Refineries = : (
Summary:
This article talks about high numbers of workers in France going on strike. The workers are all striking against the same type of company, oil refineries. All 12 oil refineries in France has been affected. Gasoline and diesel has steadily decreased in amount because of the influx of demand. Petrol Stations are running out of fuel to sell. So far 1800 stations have a shortage of the product. The shortage has resulted in limits to how much fuel you can purchase and closure of stations at night. Diesel prices have increases by 8% while gasoline is up 14%. The ways that they are trying to improve the situation are to open up the nation’s emergency fuel reserve, which will only last up to 30 day or import the fuel from other countries.
(Oil refineries process crude oil into petroleum products, which includes gasoline and diesel.)
Connection:
Freight-in was the clear connection to me. Freight-in is the cost of transportation on purchases. Transporting good usually consist of a truck. Many truckers drive at night to arrive at their destination sooner. In this situation, persons wanting to fill up their vehicle at night would not be able to do so, stalling the time it takes to reach the endpoint. They also make large trips, burning a great volume of diesel as they drive. With a limit on purchasing fuel, delivery wouldn’t be effective. On top of that, prices have been raised. In these cases, money and time are both wasted. Freight-in by itself is not such a big deal, however, it can affect the “COGS”. If the delivery company is paying more to delivery your items, they will most likely send you the bill. The two choices you have are to absorb the price or give the burden to your customers. Both have their advantages and disadvantages. Absorbing the increase in price will ultimately lower your income. However, customer will not be put off by the sudden increase in price. Forwarding the cost to the customers may keep your profits the same, but customers may not be eager to buy or buy as much. Delivery Expenses will also be affected in the same way.
Reflection:
Although I truly believe that the usage of fossil fuel is slowing killing our planet, I allow realize the need to transport goods. France is experiencing something that I trust will happen one day. Oil will be obsolete. This day may not be soon, but oil will decline steadily. Everyone will be affected. It’s unreasonable and impossible to stop travelling by vehicles powered by oil. The prices will rise, and we will continue paying. Businesses will also be affected; freight-in and delivery will cost more and in turn the cost of the good will increase. They will most likely not make as much either because consumers are not purchasing or not as much.
