## Posts Tagged ‘OPPC Model’

## Oil Pump Price Calculation (OPPC) Model – an Excel Model

**Oil Pump Price Calculation (OPPC) Model – an Excel Model**

**Calibrate Model by Calculating % Gross Margin (%GM) from Pump Price Less All Costs:**- %GM = {[PP – OPSF – TPLC * (1 – % biofuel)] / (1 + VAT2) – [(TS + PL + DE) * (1 – % biofuel) + BF + HF + DM]} / {TPLC * (1 – % biofuel)}
**Calculate Pump Price (PP) using the % Gross Margin and Other Cost Inputs:**- PP = TPLC * (1 – % biofuel) + [TPLC * (1 – % biofuel) * %GM + (TS + PL + DE) * (1 – % biofuel) + BF + HF + DM] * (1 + %VAT2) + OPSF

To download excel model and IOPRC 2012 report, click the following link of DOE:

**Calculation of TPLC and PP**- MOPS$ = Mean of Platts Singapore (imported cost of fuel)
- FOB$ = Freight on Board in US$ = MOPS * 300,000
- FRT$ = Ocean Freight in US$ = FOB$ * 2.00%
- INS$ = Ocean Insurance in US$ = FOB$ * 4.00%
- CIF$ = Cargo, Insurance & Freight in US$ = FOB$ + FRT$ + INS$
- CIF = CIF in Pesos = CIF$ * (FOREX, P/$)
- CD = Customs Duty = CIF * 3.00% (now zero due to ASEAN AFTA)
- BF= Brokerage Fee = 5,300 + (CIF – 200,000) * 0.00125
- BC = Bank Charges = CIF * 0.00125
- AC = Arrastre Charge (gasoline) = 122 * (0.75 * 158.9868 / 1000) * 300,000
- AC = Arrastre Charge (diesel) = 122 * (0.80 * 158.9868 / 1000) * 300,000
- WC = Wharfage Charge (gasoline) = 36.65 * (0.75 * 158.9868 / 1000) * 300,000
- WC = Wharfage Charge (diesel) = 36.65 * (0.80 * 158.9868 / 1000) * 300,000
- IPF = Import Processing Fee = 1,000 per import entry
- CDS = Customs Documentary Stamp = 256 per import entry
- ET = Excise Tax (gasoline) = 4.35 * 158.9868 * 300,000
- ET = Excise Tax (diesel) = 1.63 * 158.9868 * 300,000
- LC = Landed Cost = CIF + CD + BF + BC + AC + WC + IPF + CDS + ET
- VAT1 (on import) = 10% * Landed Cost (Nov 2005 – Jan 2000)
- = 12% * Landed Cost (Feb 2006 – present)
- TPLC (Tax Paid Landed Cost) = LC + VAT1 (imports) = LC * (1 + %VAT1)
- TPLC (P/L) = TPLC / (300,000 * 158.9868)
- Summary to BOC = CD + IPF + CDS + ET + VAT1
- Summary to BOC (P/L) = Summary to BOC / (300,000 * 158.9868)
- OCGM = Oil Company Gross Margin (P/L) = TPLC * (1 – % biofuel) * % gross margin
- OOCC = Other Oil Company Costs (P/L) = (TS + PL + DE) * (1 – % biofuel) + BF
- TS = Transshipment = 0.38 P/L (for oil tanker ships and barges)
- PL = Pipeline = 0.000 P/L (for FPIC)
- DE = depot = 0.27 P/L (gasoline)
- = 0.28 P/L (diesel)
- BF = Biofuels = 10% * (P/L of ETHANOL) = 2.63 P/L (gasoline)
- = 2% * (P/L of CME Biodiesel) = 1.28 P/L (diesel)
- HF = Hauler’s Fee (P/L) = 0.21 P/L (gasoline and diesel)
- DM = Dealer’s Margin (P/L) = 1.72 (gasoline)
- = 1.47 (diesel)
- TLC = Total Local Costs (P/L) = OCGM + OOCC + HF + DM
- VAT2 (local costs) = 10% * Total Local Cost (Nov 2005 – Jan 2006)
- = 12% * Total Local Cost (Feb 2006 – present)
- PP = TPLC * (1 – % biofuel) + [TPLC * (1 – % biofuel) * %GM + (TS + PL + DE) * (1 – % biofuel) + BF + HF + DM] * (1 + %VAT2) + OPSF

The pump price (PP) component called the oil company gross margin is given by:

- OCGM (oil company gross margin) = TPLC * (1 – % biofuel) * %GM
- = fixed O&M + variable O&M + marketing expense + depreciation + profit margin

The OCGM is used to cover the fixed and variable costs of the oil company plus the marketing expenses and depreciation cost of its invested capital assets and provide profit margin that recovers its capital investments and thus determine the IRR of the investment made by the oil company:

- (Capital Investment) = sum ( profit margin(t) * sales volume(t) / (1 + IRR)^t )

- Thank You !!!
- Prepared by:
- Marcial T. Ocampo
- TWG Member, IOPRC 2012

## Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Annexes

**Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Annexes**

The last part of this 3-part series presents the results of applying the oil pump price calculation model into the 1974-June 2012 historical data on pump price, import costs, taxes and government imposts, logistical and transport costs, biofuels, and dealer margin. More »

Tags: biofuels cost, CIF, dealer margin, Department of Energy, depot cost, DOE, DPLC, Dubai, duty paid landed cost, FOB, hauling cost, hauling fee, Independent Oil Price Review Committee, IOPRC, Mean of Platts Singapore, MOPS, OCGM, Oil Company Gross Margin, Oil Pump Price Calculation Model, OPPC Model, pipeline cost, pump price, refining cost, transshipment cost

## Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Analysis and Conclusions

**Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Analysis and Conclusions**

# Analysis and Conclusions

This chapter presents the evolution and derivation of the oil pump price formula. There is a need to develop an oil pump price formula simply because the oil companies never divulge their oil company gross margin which is the residual or price difference when we subtract from the actual pump price all the importation value adding activities such as supply cost or FOB/MOPS/Dubai, ocean freight and insurance, customs duty, BOC fee, import processing fee, customs doc stamps, bank charge, arrastre charge, wharfage charge, and excise tax or specific tax to arrive at the 12% VAT on all importation activities, and all local value adding activities such as oil company gross margin, transshipment, pipeline, depot operation, biofuels, hauler’s fee and dealer’s margin to arrive at the 12% VAT on local activities. More »

Tags: biofuels cost, CIF, dealer margin, Department of Energy, depot cost, DOE, DPLC, Dubai, duty paid landed cost, FOB, hauling cost, hauling fee, Independent Oil Price Review Committee, IOPRC, Mean of Platts Singapore, MOPS, OCGM, Oil Company Gross Margin, Oil Pump Price Calculation Model, OPPC Model, pipeline cost, pump price, refining cost, transshipment cost

## Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Introduction

**Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Introduction**

# Introduction

This technical paper will present the various oil pump price calculation model (regulated and de-regulated periods) which together with the supply cost, end pump price, taxes (customs duty, special duty or Estanislao Peso, excise tax or specific tax, value added tax or VAT), biofuels (10% ETHANOL gasoline blend and 2% CME BIODIESEL blend), logistical costs (transshipment, pipeline, depot operation, hauling fee), and dealer’s margin will be subsequently used to calculate the residual component (by difference) that goes to the oil company (refiner, importer/marketer). More »

Tags: biofuels cost, CIF, dealer margin, Department of Energy, depot cost, DOE, DPLC, Dubai, duty paid landed cost, FOB, hauling cost, hauling fee, Independent Oil Price Review Committee, IOPRC, Mean of Platts Singapore, MOPS, OCGM, Oil Company Gross Margin, Oil Pump Price Calculation Model, OPPC Model, pipeline cost, pump price, refining cost, transshipment cost

## Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Executive Summary

**Philippine Oil Pump Price Calculation Model and Oil Company Gross Margin – Executive Summary**

** **An Independent Oil Price Review Committee (IOPRC) recently completed its study and submitted its findings to the Philippine Department of Energy (DOE), the print and broadcast media, and conducted a public consultation at the UP School of Economics to interested parties such as NGOs, oil company associations, academe.

The IOPRC concluded that domestic oil prices of gasoline and diesel tracked changes in the international price of oil (Mean of Platts Singapore or MOPS) based on statistical and regression analysis. It also found that the return on equity (ROE) and internal rate of return (IRR) of the oil companies (refiners, importers) on an annual average are reasonable and lower when compared to returns of other utilities and industries such as power generation, telecom, mining and that the oil company gross margin (in % and absolute Pesos per Liter) which was computed by subtracting from the pump price all taxes and government fees, logistical costs, dealers margin and cost of the imported oil were not excessive as generally alleged. More »

Tags: biofuels cost, CIF, dealer margin, Department of Energy, depot cost, DOE, DPLC, Dubai, duty paid landed cost, FOB, hauling cost, hauling fee, Independent Oil Price Review Committee, IOPRC, Mean of Platts Singapore, MOPS, OCGM, Oil Company Gross Margin, Oil Pump Price Calculation Model, OPPC Model, pipeline cost, pump price, refining cost, transshipment cost

## De-Politicizing Public Transport Fare Adjustment – Incremental Cost Model

**De-Politicizing Public Transport Fare Adjustment – Incremental Cost Model**

In an oil deregulated regime, wherein oil companies adjust prices on a weekly or monthly basis in response to rapid changes in the international prices of crude oil and finished petroleum products, the public transport sector normally bears the brunt of the price adjustments since the public fare structure is subject to public hearings at the Land Transport Franchising & Regulatory Board (LFTRB) before any upward or downward adjustments are approved and implemented. More »