Oil price slide not seen at petrol pumps

[Junkman]

Although the oil price has slumped 40% since June, to $68 a barrel today, the petrol price only fell by 6%.

The lame excuse: Profits shrunk, because 20% less petrol is being sold compared with 5 years ago.

 

So if I understand this horseshit correctly, the petrol is so expensive, because not enough is being used.

Hmmm...

Sounds like we all should buy a Jensen Interceptor?

 

[oldcars]

Is most of the petrol price not tax? The goverment are shite and give us nowt back.

[Bren]

Of course it is tax - so much revenue comes from tax at the pumps it pretty much props up our economy.

[Junkman]

The oil price fell 40%, the petrol price (without tax) fell only 6% in the same period.

So including tax, the price per litre should still be 14-16 pence lower, than it currently is, i.e. about 1.05 - 1.10.

For once, it's not the guffament, that's doing the rip-off. At least not, when you accept petrol tax as a God-given.

[HillmanImp]

I agree, the fault is mainly tax. 58p of every litre is fuel duty. So if the fule is 130p a litre, 58p is duty, 60p is to the retailer and 12p is VAT.

 

So if fuel prices drop by 40% for the barrel, the retailer will drop their price to 36p a litre, pay 7.2p VAT and the government would still get their 58p which wold make the fule 101.2p per litre. However at 32p a litre I wonder how much money the retailer can make when you take into account their overheads (I literally have no idea on this).

 

In order for the actual fuel price of 130p to reduce by 40% the price the retailer takes would have to drop to 16.66p with VAT of 3.33p and the duty of 58p. That is actually a drop of over 70% for the retailer.

 

*EDIT* However, 120p is still a lot more that 101.2p so I am not sure of the justification of this, what are the overheads on this kind of thing? At what point do they stop making a profit?

[Mr_Bo11ox]

I paid £1.17/litre this morning

[Micrashed]

With my Tesco Clubcard I paid £1.08 yesterday  - and im sure they must still be making on this too.

[Junkman]

*EDIT* However, 120p is still a lot more that 101.2p so I am not sure of the justification of this, what are the overheads on this kind of thing? At what point do they stop making a profit?

 

As I wrote initially, their justification is, that 20% less petrol is sold, than five years ago, shrinking their profit.

In essence, that's what you call 'overhead'.

However, it also means, the more we save petrol, the more expensive it becomes proportionally.

 

So go and buy something with a big block and two Holley Dominators, ffs.

[DavidB]

Petrol stations add a markup (I know this is small, but I bet it's huge at the end of day)

I (very) theory, if I buy petrol at 50p per barrel and sell it at £1, make a profit of 50%, then price is reduced by OPEC to 40p, I sell at 90p.

The profit doesn't just disappear if the petrol station reduces the price.

 

The price was also investigated according to transparency not long ago, and 'they' found the prices were adjusted accordingly. Not sure of the credibility of the investigation tbh, as the oil companies are quite powerful and influential.

[Felly Magic]

At the beginning of the year, Unleaded was roughly £1.32 a litre on average, now it's around £1.20, so it has dropped around 12p a litre, and is still dropping.

[castros_bro]

Mazola induced mirth…There's also the complication of your $68 barrel of 2013 vintage Crude Brent is not 200L of four star but a mix of hydrocarbons which all need to be sold. Could be 25% of the barrel is four star and 15% diesel and all the profit comes from these and the rest of the barrel has to be sold at loss*

 

 

 

* Numbers for illustration porpose only

[babydriver]

Did they not say Gas and Leccy went up because of the price of crude oil or something like that? if so where is the reduction in utilities. They seem to put their prices up as it was getting colder and there would be a demand for the stuff. We need a reduction now before we get the omgitsfookinsnowin so we all benefit for once not next spring when there is less demand cos its warmerer.

[inconsistant]

^^^ Confused now. What I do know is that in recent weeks unleaded has gone down from £1.30 to £1.18 locally, while soup in the canteen at work has jumped from £1 to £1.25 in the same period. Russell Brand has yet to comment.

[dave21478]

I dont even look at the price any more - gotta buy it no matter what, so no point in worrying about it.

[dollywobbler]

I dont even look at the price any more - gotta buy it no matter what, so no point in worrying about it.

 

I suspect the petrol companies realise this. I'm personally on such a low income that I do still bear in mind the price. Yes, I have to fill up, but I do increasingly question whether I actually need to make a journey or not. 

[jonny69]

I heard the current drop in price is apparently due to America's fracking. They aren't importing as much oil which leaves smaller oil-producing countries with a glut and they've had to sell it off 'cheap' to remain competitive. It's worth noting that the strength of our currency is also reflected in pump prices. Oil might drop in price, but it only takes our currency to drop a bit against the dollar and the cost doesn't go down for us. It's quite complicated.

[vulgalour]

I know it'll affect me when I'm driving a petrol again, but the Xant is only costing me 99p a litre.  When the parts arrive to get it through the MoT I'm off to see the Cleland Brothers to get me some fully legal 50p per litre fuel.

[saucedoctor]

The Yanks reckon they've found 200 years worth of U.S./Canadian domestic consumption in the Cali/Mexico border area. Can't find the link, but I read it at the weekend.

 

People with beards will not be pleased. People with 5 litre Mercedes-Benzeses will be pretty happy.

[andy18s]

Fuel stations as a rule are franchised, and many only see 1-2ppl profit

It's the vastly overpriced tat inside that makes the money

[They_all_do_that_sir]

It's still way cheaper running a car than using public transport for the journeys I HAVE to do

 

And I don't mind shelling out for the journeys I WANT to do as it's a hobby too

[Bobthebeard]

Fuel stations as a rule are franchised, and many only see 1-2ppl profit

It's the vastly overpriced tat inside that makes the money

Until recently we had a small Shell petrol station that only really sold fuel, it closed last year for refurbishment. It is now open again, much bigger and sells hot food, coffee and all sorts of stuff.... So yes, the profits come from that I guess!

[Junkman]

I heard the current drop in price is apparently due to America's fracking. They aren't importing as much oil which leaves smaller oil-producing countries with a glut and they've had to sell it off 'cheap' to remain competitive. It's worth noting that the strength of our currency is also reflected in pump prices. Oil might drop in price, but it only takes our currency to drop a bit against the dollar and the cost doesn't go down for us. It's quite complicated.

 

The current drop in price is due to the OPEC not having agreed to throttle production despite there is currently an oil surplus.

This fact is entirely irrespective of what you've heard regarding the yanks, whose so-called economy is hit severely by the oil price crush.

[dollywobbler]

It isn't entirely due to that. The price was already dropping before the OPEC decision, which is why most were expecting production to get cut. The US factor is relevant as it's one reason that the price was dropping in the first place.

[DS20]

OPEC recently decided to keep production at current levels despite the relatively low price per barrel partly in order to pressure the competition coming from fracking. If / when they manage to apply sufficient pressure to set fracking back (by making it uneconomic), we'll see OPEC cut back on production and the price of oil rise again.

 

Now, when can I get some synthetic petrol / diesel produced using renewables? That, I'm really looking forward to.

[Junkman]

OPEC recently decided to keep production at current levels despite the relatively low price per barrel partly in order to pressure the competition coming from fracking. If / when they manage to apply sufficient pressure to set fracking back (by making it uneconomic), we'll see OPEC cut back on production and the price of oil rise again.

 

Now, when can I get some synthetic petrol / diesel produced using renewables? That, I'm really looking forward to.

 

I think they rather went into competition with the oil shale exploitation, which costs 60 - 80 bucks a barrel, so only turns a profit if the barrel price is 100 or over.

As for synthetic petrol using renewables, you need to go no further than across the channel. It's called E85 and works particularly well in old cars with carburetters.

It's been around for a decade there, so the chances for it becoming available in the UK are merely 40 years hence by now.

[DSdriver]

^^^ Confused now. What I do know is that in recent weeks unleaded has gone down from £1.30 to £1.18 locally, while soup in the canteen at work has jumped from £1 to £1.25 in the same period. Russell Brand has yet to comment.

Blame the Clangers - they lead the cartel on Soup Wells which was threatened with a strike for more pay by the soup dragon.

[DS20]

I think they rather went into competition with the oil shale exploitation, which costs 60 - 80 bucks a barrel, so only turns a profit if the barrel price is 100 or over.

As for synthetic petrol using renewables, you need to go no further than across the channel. It's called E85 and works particularly well in old cars with carburetters.

It's been around for a decade there, so the chances for it becoming available in the UK are merely 40 years hence by now.

 

Oil from oil shale was what I had in mind, but because brain-freeze I wrote fracking Note to self: 3/10 must try harder.

 

 

I didn't know E85 worked well in carburettor engines. I must give it a go in the DS (which prefers 97+ over95 octane anyway)

[dollywobbler]

I thought E85 completely buggered up absolutely everything in old cars. Is that wrong then?

[Cavcraft]

The cost of refining it doesn't get any cheaper, and hasn't Milford Haven recently announced it was closing?

[Steviemillar]

Until recently we had a small Shell petrol station that only really sold fuel, it closed last year for refurbishment. It is now open again, much bigger and sells hot food, coffee and all sorts of stuff.... So yes, the profits come from that I guess!

Biggest selling product by a long way at BP filling stations worldwide is ...........

 

 

 

 

 

 

Coffee

 

 

PHAKKKT!!