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If you don't even know its called fracking not cracking then I don't think you understand enough to comment.
Fuel up/down again
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If you don't even know its called fracking not cracking then I don't think you understand enough to comment.
It's not a loss leader at 110p a litre. We don't know what the wholesale price of unleaded is right now but we do know for example that freight firms can buy in bulk at 87.6+VAT. Supermarkets almost certainly pay less but even if they didn't that would be a purchase price including VAT of 105.12p a litre.
So you are not buying 'inflated' groceries which pay for 'loss leader' fuel.
ASDA are typically as cheap as any other supermarket for groceries anyway.
No, of course not - the expenses of retailing the fuel will also come out of it. We don't know what these are. They are unlikely to be 5p a litre though.
However this article:
http://www.bbc.co.uk/news/business-15462923
Implies that the costs of retailing the fuel are less than 5p a litre.
Or perhaps they use the high levels of throughput as a result of the people shopping in the store to chase volume over margin when it comes to retailing fuel? There are likely to be numerous strategies at play - however blindly stating that fuel is a 'loss leader' to supermarkets is IMHO wrong - it probably isn't in most cases.
I just filled with diesel at BP for 116.9p a litre. Asda is 116.7p a litre and the nearest Sainsburys and Tesco are both 117.9p a litre. Crap loss leader that...
Supermarkets profit from retailing fuel.
Neither of those articles have quotes from supermarkets saying that. It's mostly anecdotal.
Supermarkets obviously do, at times, loss lead on fuel. But this is usually in a form of voucher promotions or similar. The current prices do not appear to demonstrate loss leading on the part of supermarkets.
Supermarkets will run very low margins but they'll also shift very high volumes as well, perhaps higher volumes than an independent could expect due to higher footfall.
You simply cannot categorically state as you did that the supermarkets are selling fuel at negative margin and that this is why some other garages cost more. There isn't enough evidence to suggest that.
Supermarkets obviously do, at times, loss lead on fuel. But this is usually in a form of voucher promotions or similar. The current prices do not appear to demonstrate loss leading on the part of supermarkets.
Supermarkets will run very low margins but they'll also shift very high volumes as well, perhaps higher volumes than an independent could expect due to higher footfall.
You simply cannot categorically state as you did that the supermarkets are selling fuel at negative margin and that this is why some other garages cost more. There isn't enough evidence to suggest that.
I know, I said that above?
But this discussion spawned from a question asking why Shell and BP were, in one persons area, more than supermarkets. Nothing to do with the voucher schemes which are obviously loss leaders.
At advertised pump price, supermarkets are making money retailing fuel. Perhaps not huge amounts of money, but money all the same.
There is a common misconception in this country that Supermarkets sell fuel at less than cost price because you might pop into the shop and buy beans and milk. This just isn't the case outside of specific promotions. The Supermarket PFS sites generate money for the business directly as well as indirectly through increased customer flow.
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Read it again - it shows the retailer margin as being 4.7p on diesel. That includes the profit *and* the costs of retailing, therefore from that we can extrapolate that the cost of retailing a litre of fuel is less than 4.7p.
The fact that petrol had a retailer margin on 7.1p just means petrol was more profitable, it doesn't cost more money to retail petrol than it does diesel.
I will concede that technicality though
(Although most people when talking about this are under the impression its about below cost, ie that it represents a barrier to other market participants of matching the price. A loss leader will usually be below cost because it can be easily matched by others if its not, unless you have a particularly lean supply system).
Yes, for diesel.
Paid an effective price of £1.08 a litre last night using the Amex offer Jez is talking about.
116.9p a litre advertised price, £5 statement credit for every £50+ fill you make at BP.
I paid something like £65 for 60 litres
And as a result there are no UK dashcam crash compilation videos yet there are new Russian ones daily
Or adhere to the spirit of tax rate harmonisation within the EU and leave it alone - we already have some of the most expensive fuels in the EU. The argument that it hasn't kept up with inflation is invalid - it should never have been as high as it was on the first place.
You of all people will know this is simply a temporary reprieve, the long term oil price trajectory is upwards. Fuel prices will be back where they were before within the medium term.
Does me which is why I avoid them wherever possible. Pot luck as to whether somebody picks you up in a clean, modern and well kept saloon or a banger with aftermarket rimz and yet the price is the same regardless. No thanks.
1.9 TDI VAG's are all very old now.
Saw 109 for 4* petrol
Errrrr...
Which means I somewhat doubt it's available at the same price as the cheapest possible Supermarket unleaded..
I thought is was a while (read: a few days) since Jez has reminded us that he has a good Amex offer (which is closed to new entrants). Good job he's reminded us today.
To be fair it's no more tedious than the plethora of other wonderfully thrilling 'I just filled my car up' posts and marginally less tedious than the 'I just filled my car up' posts from people living overseas
Based on what, figures you've pulled out of the air with no real understanding of how fuel is priced?
Figured as much.
The reason for 2p here and 2p there is that oil has slid gradually since September - it didn't halve in price overnight. At the same time as the oil price fell, the value of sterling against the dollar, the currency in which crude is priced, also fell which mitigated some of the benefits of the lower crude costs.
It hit almost $1.7 to £1 in August and is now barely over $1.5 to £1.
As a result, the oil price fall in sterling terms was lower than that on dollar terms.
Additionally, do not forget that 58p of every litre of fuel is excise duty and on top of the final price 20% VAT is added. Even if crude oil was free of charge, fuel would still cost about 74p a litre after duty, VAT and retailing/refining costs.
So that is why we've had 2p here and 2p there and thats why it shouldn't be 90p a litre.
+ VAT = 108p a litre.
We don't extract enough oil for lower prices to be a bigger drain on the economy than lower energy costs a boost on the economy.
Money not spent on energy costs is spent elsewhere - lower energy costs stimulate our economy, they do not hamper it.
Thats not to say there is no cost or negative aspect to sustained low price, but the benefits in the medium term outweigh the pro's significantly.
Remember, historically prices have almost always been lower than they are now. The boom years of the North Sea were against a backdrop of oil significantly cheaper even than now. North Sea oil is an industry in decline anyway.
$50 a barrel isn't even THAT low!
But is also reflected in share price.
He hasn't but to be fair neither have you.
If we lived in a nation whose major export was crude oil you'd have a point.
We don't.
There are obviously negative effects of low oil prices but there are also negative effects of high ones, too.