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Oil Down 18% Since April But Unleaded Up 1.8%

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It looks like a lot more "unexpected" profits for BP and Shell.

The forecourt industry has defended continued high petrol costs at a time when oil prices have fallen.

Unleaded petrol is close to its record price, even though there has been a sustained fall in the cost of oil over the past four months.

Since 8 April, the cost of Brent crude has dropped by 18% - and the price of unleaded petrol has risen by 1.8%.

But the group that represents independent forecourts blamed other factors such as exchange rates.

This week unleaded petrol cost an average of 136.58 pence a litre across Britain's forecourts.

That is close to the record price of 9 May, 2011, when unleaded cost 137.43p a litre.

Diesel prices have remained steady over the same period, although they too are within 3p of a record high.

The petrol industry points out that the price of a litre at the pumps is only partially dependent on the cost of crude oil.

Some 60% of the price is accounted for by fuel duty and VAT. Another 10% is down to delivery charges, the cost of marketing, and profit margins made by both suppliers and retailers.

Only 30% depends on the cost of crude oil.

Exchange rate 'problem'

Refining costs and wholesale prices on any given day mean the price of petrol can vary further.

Brian Madderson, of RMI Petrol, represents independent forecourts across the UK.

If they were making substantial margins, we would see more investment coming into the business”

He said one problem has been the exchange rate.

Oil is priced in dollars, and recently sterling has weakened against the dollar - counteracting the drop in the price of crude.

Mr Madderson said: "As a result we are not getting as much of the saving from crude oil prices as might be expected."

The forecourt industry categorically denies its members make good profits from petrol sales.

Most independent forecourts make between two and four pence a litre - meaning a full tank only nets the petrol station between £1 and £2 profit.

"That is hardly sustainable," said Mr Madderson.

He explained that the only way most petrol stations survive is by having shops, car washes or cash machines attached to them.

Oil v petrol prices

Date and percentage change Brent crude per barrel Unleaded petrol per litre

8 April, 2011

$126.65

134.17p

8 August, 2011

$103.74

136.58p

Percentage change

18% fall

1.8% rise

Even so, up to 500 forecourts a year are closing down.

Mr Madderson added: "If they were making substantial margins, we would see more investment coming into the business, rather than going out of it."

Some observers expect the fall in the oil price to filter through to forecourts within the next month. Earlier this week, Asda and Morrisons took 2p off the price of a litre.

Exchange rates can impact the cost of petrol at the pump

But despite the economic slowdown, there was upwards pressure on the price of crude oil this week, as the US revealed that its oil reserves were lower than analysts expected.

And even though fuel duty was reduced by 1p in April this year, the UK government is planning to make up for that with two increases in 2012. From 1 January, duty will rise by 3.6p a litre. The government said that rise was purely to take account of inflation. Then, in August, the duty will rise again, either by inflation, or by inflation plus 1p, depending on the price of oil.

The RMI believes that could mean around 8p a litre being added to fuel duty.

The Pepper family, from Bourne in Lincolnshire, is already feeling the effect of high prices.

They had planned to traverse Wales during a camping holiday in August - but when they worked out the cost of fuel, they decided to do a much shorter route.

"It is £70 to fill a tank now," said mum Louise Pepper.

"And it is a tank there, a tank up, and a tank back. It makes the cost of the holiday astronomical really."

http://www.bbc.co.uk/news/business-14508213

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That's right folks - give thanks to Merv that lower interest rates are keeping mortgage payments affordable in these difficult times.

And yet those same low interest rates make heating and petrol bills unaffordable in these difficult times. Same outcome.

Can I have an inflation linked pension and a knighthood now please.

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I don't see how they can use currency as an excuse.

The pound hasn't devalued much in the last 2 weeks when most of the oil price came down so it is pure profiteering in my mind.

That being said I am an advocate for extremely high petrol prices as I think driving should be a luxury and not a 2 mile trip to the shop when you could cycle/bus.

Unfortunatley public transport in england is a rip off. I was back home in Scotlant recently where I was reminded that taking the train/bus need not be a complete rip off as in england.

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That being said I am an advocate for extremely high petrol prices as I think driving should be a luxury and not a 2 mile trip to the shop when you could cycle/bus.

That makes you an advocate of high food prices and increasing unemployment.

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One woman on radio5 around 7am ish was interviewed as a motorist in rural england. She complained that she needed a car and that they were now having to make one trip to get shopping rather than several such as pick up the kids and then another to go shopping.

If that's the biggest impact then I salute the rises. She is saving money and the planet by simply being more organised. Hooray.

I suspect others have stronger arguments, but you have to admit, her one was lame.

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One woman on radio5 around 7am ish was interviewed as a motorist in rural england. She complained that she needed a car and that they were now having to make one trip to get shopping rather than several such as pick up the kids and then another to go shopping.

If that's the biggest impact then I salute the rises. She is saving money and the planet by simply being more organised. Hooray.

I suspect others have stronger arguments, but you have to admit, her one was lame.

Yeah ok , one woman taking fewer shopping trips in her car is 'saving the planet'.

Meanwhile the mega container ships of which there are 15 pump out as much emissions as 50 million cars each.

http://www.gizmag.com/shipping-pollution/11526/

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The motoring public should unite against this profiteering.

Would a legal action against Royal Dutch be known as a Shell suit?

Corrected for you.

They all have to eat and food prices are increasing partly because it has to be transported.

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I agree. However, the rate is almost the same on the dates quoted:

8th April: 1.634

8th August: 1.637

If they mentioned this in the article it would strenthen their case, odd omission.

The spokesman for the oil companys said the dollar had become more expensive in an article I read. And it hadn't.

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Yeah ok , one woman taking fewer shopping trips in her car is 'saving the planet'.

Meanwhile the mega container ships of which there are 15 pump out as much emissions as 50 million cars each.

http://www.gizmag.com/shipping-pollution/11526/

Well let's not bother at all then. Turn up the heating, put all the lights on, leave all the electronics on too. What's the point, after all it's just me.

Just because something is worse, doesn't mean you might as well not bother.

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  • 332 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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