Question on petrol prices

Strictly speaking a rise in the cost of a barrel of oil shouldn't have any immediate effect on the cost of petrol as oil bought today on the open market needs to be transported, refined then transported again before it ends up in your car. That process can take anywhere from 4-10 weeks. yet if the cost of oil goes up, you'll often see the price of a litre of petrol go up with almost immediate effect. it's nothing but blatant profiteering.

Mr Jack said:
They barely break even; the supermarket stations are often loss leaders.
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I used to believe this, and indeed it was true many years ago, but you only need to look at most supermarket petrol stations where the price is exactly the same at all the petrol stations in the area. The price often changes on the same day and there's rarely a difference. if you're optimistic you might say the other non-supermarket stations have had to reduce their prices to match, but it's not true IMO.

Case in point, the town I live in has 2 shell and a morrisons. A litre of boggo unleaded is currently 127.9. if I travel 15 miles into Edinburgh the very first station I come to is 125.9. The Supermarket petrol station is 125.9 as well. It's the same supermarket chain. I'm firmly of the belief that supermarkets don't loss lead on petrol anymore.
 
Isn't there a new 'protest' happening this year? Instead of the last one which told us not to buy petrol on a certain day, they are suggesting we don't buy petrol from the two biggest companies: Esso and BP. I had a round-robin e-mail about this.
 
Lopéz said:
I worked in a petrol station around 8 years ago. We made approx 1.6p a litre, hence my boss having a fixation on selling groceries and so on - selling fuel alone is just not sustainable.
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This is the reason where i am they wont initiate prepayment for fuel. The tills can do it and the options there. It would stop all drive offs but it would cost too much in sales from the shop apparently.
 
Can we have a riot over fuel prices now, please? Meet you all outside the HoP ;)

Seriously - I'm surprised we don't have any blockades from transport firms. It seems we're just so used to being shafted that we've given up complaining. :(
 
Mr Jack said:
Petrol stations are extremely marginal businesses. They barely break even; the supermarket stations are often loss leaders.
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el_dazza said:
Actually I believe make a few pence profit per litre.
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Mr Jack said:
They do. Which barely pays for the cost of the station, maintenance, staff, etc.

Source: various, including BBC News earlier today.
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Yes it's only a few pence but high turnover. There is a chain of 3 busy petrol stations in my area, one on the A1 and two on the a19. Last year their turnover was over £35m and the profit was £2m.

So low profit margin but profits can easily run into millions.

It's the small village petrol stations I feel sorry for. My local one is 6p more than any of the big chains/supermarkets as they don;t have the buying power and only maybe get a delivery every few weeks. Making 2 or 3p per litre probably wouldn;t even pay for the wages of the staff on the counter some days if they didn't sell/do other things.
 
GJ02 said:
tescos buy £15,000 of petrol and sell it at 1.26pl until all that fuel has gone, what i dont understand is how it goes up so much so quickly if the fuel in the tanks at the station is the same fuel that was 2p cheaper yesterday.

how does it work ?
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Cause busy large petrol stations can go through more than one delivery of fuel per day. Where I used to work we had our own tanks and pumps and could take a full tanker load of fuel and we used to go through a load per week. We had 4 main wholesale suppliers and you'd ring all 4 to get the best price.

A few interesting things came out of that. In a rising market with prices going up, any main wholesaler which had just bought in new fuel could be 2 or 3p a litre more expensive than somebody else who still had old stock. The opposite would happen in a falling market. Of course as soon as all of them had the new deliveries at the new price then the price difference would be points of a pence.
 
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lol @ hardly anyone posting something relevant to the OP's question :P

In reference to the OP, profiteering, that's why the price goes up, they know other stations have put the price up and so they can get away with it too, near me in the hills the is a petrol station in the rear end of nowhere (its so remote it sells normal unleaded, diesel and 4 star) and as a buddy works there I know they haven't had an unleaded delivery this year.

Are they selling it at 2010 prices? ofc not, and before somebody says that's down to duty/vat going up the price increase has exceeded that.
 
[TW]Fox;18542698 said:
This is a pretty flawed figure as it would suggest that if oil was $50, fuel would be 75p a litre, which of course it never would be given duty alone is nearly 60p.
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think you've made a bummer there matey!! every $2 rise = 1p extra at pumps, the key word being "rise"


at work we have seen a canny big increase in fuel thefts, not just drive offs but also punching holes in lorry fuel tanks and syphoning (sp) the fuel out!
 
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MissChief said:
Strictly speaking a rise in the cost of a barrel of oil shouldn't have any immediate effect on the cost of petrol as oil bought today on the open market needs to be transported, refined then transported again before it ends up in your car. That process can take anywhere from 4-10 weeks. yet if the cost of oil goes up, you'll often see the price of a litre of petrol go up with almost immediate effect. it's nothing but blatant profiteering.
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But it very rarely goes down with immediate effect :mad:
 
of course not. if you're running a business where you sell something everyone needs and will buy whatever the price, there's a limited number of competitors in your area and your customers NEED what you have regularly, why reduce the price if you don't have to? You (and I) may not like it, but that's business.
 
but the government should put a law on it or set the prices themselves, as long as it works in our favour :p

found out that taxi fare's are set by the local government. each taxi is set by them. why cant it be the same for fuel, so that some are not getting as ripped off as others!!!
 
dbov22 said:
think you've made a bummer there matey!! every $2 rise = 1p extra at pumps, the key word being "rise"
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At 126.9p a litre for unleaded fuel, 41.8p of this is the product. But the product is refined unleaded petrol, not raw crude. So, lets be pessemistic here and assume that the majority of the product price is indeed crude. Lets say that at 126.9p, crude oil accounts for 38p of the pump price.

So, if at $95 a barrel, 38p of a litre of fuel is made up by raw crude, then if crude rises by $2, lets see what the effect of this on a litre of fuel is?

$95 to $97 is a 2% rise. Therefore the oil component of our product cost rises from 38p to 38.76p, so the product goes up 42.56.

Once we add the transport/retail costs, the duty and the VAT back on the new price following our $2 increase in oil is 127.8.

Less than 1p per $2.

If oil goes up by 15%, say to $110 as per now, I calculate an unleaded price of 133.9 if it was 126.9 when oil was purchased at $95 a barrel.

This is a 7p rise in fuel following a $15 rise in oil.

I appear to have just proved them right.

Oh well :D
 
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[TW]Fox;18553237 said:
At 126.9p a litre for unleaded fuel, 41.8p of this is the product. But the product is refined unleaded petrol, not raw crude. So, lets be pessemistic here and assume that the majority of the product price is indeed crude. Lets say that at 126.9p, crude oil accounts for 38p of the pump price.

So, if at $95 a barrel, 38p of a litre of fuel is made up by raw crude, then if crude rises by $2, lets see what the effect of this on a litre of fuel is?

$95 to $97 is a 2% rise. Therefore the oil component of our product cost rises from 38p to 38.76p, so the product goes up 42.56.

Once we add the transport/retail costs, the duty and the VAT back on the new price following our $2 increase in oil is 127.8.

Less than 1p per $2.

If oil goes up by 15%, say to $110 as per now, I calculate an unleaded price of 133.9 if it was 126.9 when oil was purchased at $95 a barrel.

This is a 7p rise in fuel following a $15 rise in oil.

I appear to have just proved them right.

Oh well :D
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$95 to $97 is more than a 2% rise - I wouldn't pick you up on this minor approximation if it weren't for the fact that you're kicking up such a stink about people using an approximation of $2 oil increase resulting in 1p pump increase. I don't see how you can start moaning about the approximation of 0.9p being 1p and then start trying to introduce an invalid level of precision in your own calculations (where does this 38.76p come from - surely it should be 38*97/95, not 38*1.02?)
 
They charge what they can get away with - its a low margin & competitive business so you do essentially pay a 'fair' price in general. The majority of the charge you pay for fuel is tax.

Perhaps there are some areas where there is only one petrol station and they take the mickey with prices - if someone is really that confident that they are then its a free market... someone else is free to go get a franchise and open up a rival station. I suspect however that these sorts of cases are pretty rare.
 
HangTime said:
it weren't for the fact that you're kicking up such a stink about people using an approximation of $2 oil increase resulting in 1p pump increase.
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If you cannot be bothered to read what I wrote properly, I cannot be bothered to reply to you properly.

Handy hint: Read the bit where I realise, through my calculations, that the $2-1p thing is actually probably right.

(where does this 38.76p come from - surely it should be 38*97/95, not 38*1.02?)
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It was the increase in the oil proportion of the cost of the product. I increased it by 2%, which is a reasonable thing to do if the cost of oil increases by 2% (ie it goes from $95 to $97).

You can do it both ways but it churns out roughly the same number - a number that goes against my initial thoughts and demonstrates the assumption in question to be correct.
 
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MissChief said:
Strictly speaking a rise in the cost of a barrel of oil shouldn't have any immediate effect on the cost of petrol as oil bought today on the open market needs to be transported, refined then transported again before it ends up in your car. That process can take anywhere from 4-10 weeks. yet if the cost of oil goes up, you'll often see the price of a litre of petrol go up with almost immediate effect. it's nothing but blatant profiteering.
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Its how an efficient market should work tbh... and it actually works against profiteering - if there was no relationship then you'd open the door to big arbitrage opportunities - the reality is that the crack spread is heavily traded and there is a strong link between oil and the refined products.

The reasons for specific price movements etc.. can be complex but the reason why certain markets are linked isn't.
 
They calculate it on how hard they want to rape us, they got us dependent on oil then control us through it when it commonly known cars can be manufactured to run on water and also that free energy technology exists so we can generate our own electricity instead of being tied to the grid paying extortionate rates
 
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