I have thought about that. It seems to me that the only direct benefit is from an immediate supplier. Distant third step suppliers would seem to have no effect. Only the direct effect on the cost of goods portion of the balance sheet which is only affected by the immediate supplier. I don't see how the oil well would have any effect at all except on the refiner.
Also, throughtout the pipeline you will have both: unprofitable companies and companies who resist lowering prices.
I have thought about that. It seems to me that the only direct benefit is from an immediate supplier. Distant third step suppliers would seem to have no effect. Only the direct effect on the cost of goods portion of the balance sheet which is only affected by the immediate supplier. I don't see how the oil well would have any effect at all except on the refiner.This also assumes that the businesses down through the chain are "price makers" (that they can set a price). The more competitive a market is the more the businesses in it are "price takers" and have to take what the market will give them and aren't able to "embed" their taxes by raising prices. If a business is a "price maker," they won't care if their costs go down, they do make the price.
You should check out the effect of oil prices on plastic resins, then you can easily translate that into the price of plastic goods, i.e. instrument panel in cars, and you could put together a better idea of the cost build up in products.
Remember, all companies must be able to pass on their cost to the buying entity (customer) or they will eventually die. Regardless of their margin, their costs must be passed on. As a result you have a tiering effect of all costs and if these costs include tax, then the burden related to tax can accumulate and exponentially grow throughout the supply chain.