Today GALP (the portuguese oil company) announced another raise on the oil prices for gasoline and diesel fuel.
The public opinion is quite unhappy with this decision - last week we have witnessed the lower rank of GALP workers going to the public and demanding answers that explained the reason why the fuel prices have been raised an average of +30% while the actual crude prices have only raised ~15%
I guess the reasons for this are painfully obvious - we are supporting a company that looks at no ethic rules to grow and uses the need for energy and transportation to leverage all the investment done in the oil fields of Angola and Mozambique along with super-sized grow of their range of oil distribution posts.
We should be proud of helping a company that has grown so much more than anyone would ever had predicted two years ago when it first debuted in the PSI 20 stock market.
Now we face a serious problem - the OPEP head comes to the public saying that speculators are crazy and responsible for creating this confusion with oil rises and we even reach to a state where public manifestations demand the government to take action and force GALP to reduce oil prices.
Since government earns ~60% of the price that costs each liter of fuel in taxes why would they be interested in reducing this precious source for income in the first place?
Portuguese people already pay one the highest prices for fuel in europe for nearly a decade without serious complaints. Guess we got used to this way of life and simply ignore that even our spanish neighbors pay substantially less taxes.
Saturday, was the first day in nearly 30 years of active democracy that we see people proclaiming in loud voice a revolution of mentality and try to break the rules to force oil prices go down.
How have we reached to this point?
I'm not recognizing this country as the same quiet place where my childhood was spent.
Speculators do what they have learn to do best, take advantage of lower stock prices due to this "subprime" ghost and rogue trader that brought the market down for a few days in late February and will likely keep the stocks on their hand until a substantial amount of profit can be made within the next months in late November when the fuel demands get astronomically high.
I had recently bought stocks from GALP and around 50% of my wallet is filled with them because of the high rises that are predicted for the next months but I'm starting to feel very unhappy about the company and I have a serious feeling that this has the potential to end very badly for everyone involved unless some urgent measures are adopted soon.
It's not just a feeling - tension is indeed building up between the company's board of administration, the government and the population (who desperately need lower oil prices for their basic needs of transportation).
Over the next week will surely try to get rid of these stocks and evaluate the next steps or companies to follow, energy related stocks are simply to unstable and speculation levels are indeed crazy - one of these days they might as well crumble and bankrupt the life earnings of those who see GALP as a life investment.
Time to take a break, a deep breath and interpret the steps to the future, there are still many months until this year is finished and I think that the next winter won't bring any better news, so beware, take it easy and don't invest all your money at the same time.
If big companies like Google and Chevron are investing significant amounts of money on alternative energies to be explored inside the US without even resorting to bio-fuel (solar termal energy), then I would suspect that they have good reasons to do so and wouldn't be surprised to see them expecting a full return of investment in far less than the expected 12 years.