Why arent petrol prices dropping?

Sizzler

Prices at the pumps are quick to rise with oil price jumps, but dont see the price dropping so quick (if at all) when the oil price drops on the markets :rolleyes:

http://www.ireland.com/newspaper/breaking/2007/1210/breaking23.htm

craichoe

Sizzler wrote: »

Prices at the pumps are quick to rise with oil price jumps, but dont see the price dropping so quick (if at all) when the oil price drops on the markets :rolleyes:

http://www.ireland.com/newspaper/breaking/2007/1210/breaking23.htm

Rip off

L1011

Part of it is that the oil prices are for delivery in some months - the petrol being sold now is from oil bought some months past. Doesn't explain it in its entirity, fuel retailers do keep prices higher after a drop to recover some profit.

Hedging and the oil futures market are they key here.


To give themselves price stability many companies buy a few months worth of thier fuel needs in advance at a given price. This and speculation on oil futures everytime there is even moderatly bad news means that oil prices rise quite quickly on bad news, but are very slow to fall back.

The ownership of the contents of an oil supertanker may change hands thousands of times from when it leaves the field to when it gets to its destination.

uberwolf

the inflating dollar is clawing back some of the price drop, just as the deflating dollar protected us from the worst of the rises.

I'm sure there's gouging in there as well though

il gatto

There is a large element of gouging. Of course oil companies take fright at rising oil prices, but that doesn't explain your local filling station jacking up the price of oil the company purchased at the lower rate. Even though people have copped on to this "quick rise, slow decrease" tactic, it'll continue. I mean, what will people do? Stop driving in protest? It's a lose, lose situation for motorists. Having said all that, we must remember the price we pay for fuel is mostly tax, so we should direct most of our displeasure to the Minister of Finance.

Altreab

il gatto wrote: »

There is a large element of gouging. Of course oil companies take fright at rising oil prices, but that doesn't explain your local filling station jacking up the price of oil the company purchased at the lower rate. Even though people have copped on to this "quick rise, slow decrease" tactic, it'll continue. I mean, what will people do? Stop driving in protest? It's a lose, lose situation for motorists. Having said all that, we must remember the price we pay for fuel is mostly tax, so we should direct most of our displeasure to the Minister of Finance.

There is a lot of additional price gouging going on at the moment.Already in Galway many petrol stations are selling diesel at the same price petrol. In one place diesel is a cent a litre more expensive.
Regarding what the goverment is taking that has changed very little since 1993.
The excise rates for petrol is 44Cent a litre and for Diesel its 37 cent a litre (Source Revenue ) This means that the companies are taking an extra 7cent a litre bite from diesel. €3-€3.50 a tankful. Thats a LOT of extra money.

Total take for the Goverment at the moment assuming that fuel is costing €1.21 (to make figures easy) is 21 cent in VAT and 44 cent in Excise Duty for a total of 65 cent per litre of Petrol and for Diesel its 21 cent in VAT and 37 cent in Excise Duty for a total of 58 cent per litre
Amount to the Oil companies is 56 Cent for Petrol and 63 cent for Diesel (which they have always told us is cheaper to refine than Petrol)

jayok

I though the duty on Petrol and Diesel was a percentage? (I know VAT is, but the other duties). Can you supply your source?

Sizzler

MYOB wrote: »

Part of it is that the oil prices are for delivery in some months - the petrol being sold now is from oil bought some months past.

I dont buy that, if oil hit $100 a barrell today you can be sure the price at the pump would be up tomorrow LOB.

L1011

Sizzler wrote: »

I dont buy that, if oil hit $100 a barrell today you can be sure the price at the pump would be up tomorrow LOB.

It didn't go up instantly last time; but yes, it often does.

But its entirely true - you go to try and buy a barrel of oil right now and it won't be delivered till February

craichoe

Its dropped from 1.16 to 1.10 here in holland for Diesel

liljenny

in some garages diesal is more expensive than petrol