Fuel price discussion thread (was ‘chaos’)

sandys said:
I filled up yesterday as I was a bit low and thought ah, i won't bother with costco it is never that big a saving to go out of my way, or so I thought, I should have checked first, it cost me 179.9 for petrol at the Shell ( I only use E5) cosco was 149, that's 30p/litre, 20% :eek: blimey, how's it spread so much recently.

I only fill once every 4-6wks so I don't really watch the prices but that seemed a bigger spread that normal.
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It is because the major petrol stations and even the supermarkets arent dropping the prices in line with how sterling is doing and the price of crude oil is $81 per barrel compared with $130 back in June when petrol and diesel hit their peak. Sterling is $1.23 so back to what it was in June after it slumped to $1.07 in september/october which kept fuel prices high due to any savings in the price of crude going down was wiped out by the falling pound.

So oil has fallen 37% since its peak price in June and yet fuel price has only fallen around 10-15% max. Looking at the prices some people have posted here, some places have only dropped 5%. Everybody is making a killing atm. Normally the supermarkets compete but even they must have decided to not bother and just cash in while they can.

Only Costco has done the honourable thing and kept their margins the same as earlier in the year. Good to see the boss of Costco calling out the supermarkets for profiteering.

Cost of living crisis would be eased a lot if petrol was only £1.40 and diesel £1.60 and continued to fall coming into Christmas.
 
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The supermarkets long viewed their PFS operation as a customer grab, so it operated on extremely tight margins or even at a loss. I remember days from summer jobs working in a supermarket petrol station where the price would be remotely updated several times a day during peak holiday season, and I was just in a medium sized town with a bit of through traffic.

Nowadays I suspect the supermarkets are leveraging the sustained pricing levels to subsidise other parts of their business, given costs of every aspect of food and commodity retail have surged so much. On the face of it it's profiteering, but it's more likely to be more palatable cost offsetting disguised as a broadly flat pricing regime between the major operators. They all have the same struggles with overheads so they're all basically price fixing the market to offset some of their horrifying operating costs.

I'm not apologising for them doing this, indeed it's a problem of their own making by racing to the bottom in terms of food retail pricing, but I'm not sure that the alternative is any better - hike prices on essential food and commodities for every person in the UK, which would again disproportionately negatively affect the poorest people. Tricky one really. It'll be interesting if one supermarket breaks ranks for ethical reasons and explains why they're keeping their retail prices artificially higher.
 
~cw said:
The supermarkets long viewed their PFS operation as a customer grab, so it operated on extremely tight margins or even at a loss. I remember days from summer jobs working in a supermarket petrol station where the price would be remotely updated several times a day during peak holiday season, and I was just in a medium sized town with a bit of through traffic.

Nowadays I suspect the supermarkets are leveraging the sustained pricing levels to subsidise other parts of their business, given costs of every aspect of food and commodity retail have surged so much. On the face of it it's profiteering, but it's more likely to be more palatable cost offsetting disguised as a broadly flat pricing regime between the major operators. They all have the same struggles with overheads so they're all basically price fixing the market to offset some of their horrifying operating costs.

I'm not apologising for them doing this, indeed it's a problem of their own making by racing to the bottom in terms of food retail pricing, but I'm not sure that the alternative is any better - hike prices on essential food and commodities for every person in the UK, which would again disproportionately negatively affect the poorest people. Tricky one really. It'll be interesting if one supermarket breaks ranks for ethical reasons and explains why they're keeping their retail prices artificially higher.
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fair enough for the supermarkets but not really for the national retail petrol stations. When diesel was £2 per litre they were "happy" with their 4p profit margin per litre. Now the price has dropped so much, some of them are holding onto a 30p per litre profit margin. That does seem like profiteering and taking advantage of the fact supermarkets are no longer dropping their prices to where they should be.

I know a local business man who owns two petrol stations in prime locations on the A19 S and N and one on the A1. At the normal 4p per litre profit, they sold so many millions of litres each year they still made him a couple of million pound profit. Even with addition electric and staffing costs, he is looking at making an extra £8m per annum less these costs. i cant see his overheads for three petrol stations will have increased by £8m per annum.....
 
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Totally agree, it's a massive oligopoly. Perhaps they can sense the fuel duty increase coming and are 'pre-adjusting' their customers to the higher prices. Not that they'll absorb the duty increase of course. Oh no. It's just getting us used to fuel being near £2/litre. I always feared once we broke through the £1/litre threshold it was game over in terms of keeping retail costs reasonable.
 
Greebo said:
fair enough for the supermarkets but not really for the national retail petrol stations. When diesel was £2 per litre they were "happy" with their 4p profit margin per litre. Now the price has dropped so much, some of them are holding onto a 30p per litre profit margin. That does seem like profiteering and taking advantage of the fact supermarkets are no longer dropping their prices to where they should be.

I know a lock business man who owns two petrol stations in prime locations on the A19 S and N and one on e the A1. At the normal 4p per litre profit, they sold so many millions of litres each year they still made him a couple of million pound profit. Even with addition electric and staffing costs, he is looking at making an extra £8m per annum less these costs. i cant see his overheads for three petrol stations will have increased by £8m per annum.....
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My parents owned a few stations and never made anything like 2million a year, I'd suggest those numbers are complete tosh. They'd have to sell almost 140000 litres per day every day to make that. The average (larger site) UK station sells about 16000 litres per day with all running costs coming out of that as well. Its not the cash cow you think it is.
 
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200sols said:
My parents owned a few stations and never made anything like 2million a year, I'd suggest those numbers are complete tosh. They'd have to sell almost 140000 litres per day every day to make that. The average (larger site) UK station sells about 16000 litres per day with all running costs coming out of that as well. Its not the cash cow you think it is.
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i've just looked up his accounts. It says he now owns 5 petrol stations so he has obviously expanded since I last looked.

2021

Sales £52,404,779 Cost of Sales £44,429,748

Obviously they will sell snacks and other stuff but on that basis it looks like he sells at least 35 million litres of fuel per annum across his 5 petrol stations so around 100,000 litres per day or 20,000 per site?????? Maybe more as fuel was much cheaper last year.

Gross Profit £7,975,031

Operation profit £3,919,318

Profit before tax £3,925,719

Profit after tax £3,163,468

Covid year was poor with only £36m of sales but still made £2.4m after tax

So certainly looks like the cash cow I think it is? Okay the net profit margin is lowish at 7.5% but when your turnover is so high, the profits soon pile up to big sums

My point is that was last year with the "normal" 4p per litre profit on petrol and slightly more on diesel and he made £3m. Now he hasnt had to drop his prices as fuel as dropped so will be making several times more profit than last year assuming the volume hasnt dropped of course.
 
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Greebo said:
i've just looked up his accounts. It says he now owns 5 petrol stations so he has obviously expanded since I last looked.

2021

Sales £52,404,779 Cost of Sales £44,429,748

Obviously they will sell snacks and other stiff but on that basis it looks like he sells around 35 million litres of fuel per annum across his 5 petrol stations so around 100,000 litres per day or 20,000 per site??????

Gross Profit £7,975,031

Operation profit £3,919,318

Profit before tax £3,925,719

Profit after tax £3,163,468

Covid year was poor with only £36m of sales but still made £2.4m after tax

So certainly looks like the cash cow I think it is? Okay the net profit margin is lowish at 7.5% but when your turnover is so high, the profits soon pile up to big sums

My point is that was last year with the "normal" 4p per litre profit on petrol and slightly more on diesel and he made £3m. Now he hasnt had to drop his prices as fuel as dropped so will be making several times more profit than last year assuming the volume hasnt dropped of course.
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No doubt it is better now with increased margin, it always used to be dictated by supermarkets and they usually were competitive and this drove the price down, on the old days you didnt always make a steady 4p, sometimes you made 2p, others you made 8p, but now 15p seems a bit high. But think 5 sites at 4p/litre and 100k per day between them, that is £1.46m before costs over a year, thats a fair number of staff to employ and overheads, its clear to me as was always the case the real driver for profit is shop sales. To drive prices lower again you need supermarkets acting but a falling market was always better for retailers. Volume is up slightly this year iirc, but not quite at pre pandemic levels (Approx 17k lpd per average large UK station)
 
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200sols said:
No doubt it is better now with increased margin, it always used to be dictated by supermarkets and they usually were competitive and this drove the price down, on the old days you didnt always make a steady 4p, sometimes you made 2p, others you made 8p, but now 15p seems a bit high. But think 5 sites at 4p/litre and 100k per day between them, that is £1.46m before costs over a year, thats a fair number of staff to employ and overheads, its clear to me as was always the case the real driver for profit is shop sales. To drive prices lower again you need supermarkets acting but a falling market was always better for retailers. Volume is up slightly this year iirc, but not quite at pre pandemic levels (Approx 17k lpd per average large UK station)
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To be fair I suspect he has always made more than 4p as the three sites I knew he used to have are prime sites and one of them, is renowned for being one of the dearest petrol stations in the country. Thats what you get when you are the only petrol station for 40 miles on busy A roads - the A19 and the A1. I suspect he was always made 12p per litre but now he will be making 30p+ and raking it in.

Even selling crisps and sweets and fags, he must shift a very large quantity of fuel. You never drive past without seeing a queue for the many pumps he has at each station.

My point still stands though, if the old mark up gave you £4m profit, why do you now need double or triple the margin? We are buying fuel at £1.55 bulk atm and the fuel delivery companies are obviously making their profit. We only get one artic load a week so would be on par with a small rural garage. A big busy petrol station, like you say, will do that every day, They will get a much better price than we are getting and I see he is still £179.99 for diesel so thats at least 25p per litre profit before costs and overheads he is making.

Agreed its the lack of competition from supermarkets which is keeping fuel prices artificially high across the country. Perhaps supermarkets should go back to normal margins and if they need to make their profit elsewhere, then put it on the food?
 
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Wish supermarket petrol stations, those attached to main supermarkets, only sell things like papers, cigs, sweets, milk and drinks (small bottles of water, Coke etc). It is not a place for them to sell things enough for a weekly shop. As I have got stuck behind these people in petrol stations as parked too sticking out so unable to pass them or some **** has parked too close behind me to reverse out.

There are petrol stations with a Tesco Express, Spar etc with parking spaces for shopping. People need to park in these AFTER they filled up to grab groceries.
 
cheesefest said:
Wish supermarket petrol stations, those attached to main supermarkets, only sell things like papers, cigs, sweets, milk and drinks (small bottles of water, Coke etc). It is not a place for them to sell things enough for a weekly shop. As I have got stuck behind these people in petrol stations as parked too sticking out so unable to pass them or some **** has parked too close behind me to reverse out.

There are petrol stations with a Tesco Express, Spar etc with parking spaces for shopping. People need to park in these AFTER they filled up to grab groceries.
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I use petrol stations quite regularly as I do quite a few miles for my job. Can’t remember the last time I was waiting to be let out. Normally it’s the cashier more interested with having a chat than customers blocking me in.
 
Stocks running low at local stations, few with empty tanks. Shell garage said best to top up as not sure when they’re having another delivery. Suppliers where my partner work can’t guarantee fuel deliveries next week.
 
MattTheTall77 said:
Stocks running low at local stations, few with empty tanks. Shell garage said best to top up as not sure when they’re having another delivery. Suppliers where my partner work can’t guarantee fuel deliveries next week.
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Where's that? Heard nothing about this at home, and had no problems with filling up petrol either in southwest, midlands or northwest over last few days...
 
~cw said:
Where's that? Heard nothing about this at home, and had no problems with filling up petrol either in southwest, midlands or northwest over last few days...
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This is in Lincolnshire. BP garage at Sleaford was out of Ultimate diesel, Jet garage on A17 was out on some fuel types, and the Shell garage nearby was out of a petrol but didn't notice which. The attendant at the Shell garage was the one who mentioned best to fill up as they were not sure when the next delivery would come. Could just be localised to this area perhaps depending on refinery.
 
~cw said:
Where's that? Heard nothing about this at home, and had no problems with filling up petrol either in southwest, midlands or northwest over last few days...
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yes had problem no e5 at BP on a10 south of kings lynn this evening, 4 of 8 pumps closed, and then I waited needlessly, before realising the e5 distributor was out anyway (e: on 4 remaining), drove away.
 
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Perhaps coincidence, but a Tesco PFS near Wigan this afternoon had no diesel and no E5, only E10. 157.9 for E10. First station this week I've seen on my travels with any closed pumps.
 
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