Petrol Prices - AGAIN arrrrgh

Flyer1

Hi all,

This question is really beginning to puzzle me now. Oil prices are now below $80 per barrel, when the price was this before, the average price at the pump was 105 - 106c/litre. Now I know that when the crude oil price drops, that it can't come down straight away at the pumps, I know all the older stock has to be shifted on first. But oil has been below the $100/barrel mark for some time now, and we're still not seeing anyone selling it below 109.9 yet. This is really beginning to get on my shoulders. I've been keeping an eye on the US fuel prices since crude oil started dropping, as crude oil drops, as does the price of fuel accordingly over there.

Someone is no doubt better tuned in to this subject matter then me, any bit of info would be great.

joeperry

109.9?? Where did you see that? I got some petrol yeterday was 117.9

Tipsy Mac

The dollar has gained around 10% on the euro recently.

whiterebel

Tipsy Mac wrote: »

The dollar has gained around 10% on the euro recently.

And the price of crude has dropped 40%

The petrol prices in galway city are a disgrace. Its 125.9 for petrol still in most places in the city. The best I can get without going well out of my way is 123.9 near where I live outside the city. I know of places selling it for 119.9 (could be less now) but too far out of my way.

The consumer agency really needs to get involved at this stage as the greed of some filling stations is a joke.

DarkJager

Its all greed and nothing more... The petrol stations have got too comfortable raking in the cash off overpriced fuel.

Hagar

Petrol companies - putting the Car in Cartel for over 100 years.

HashSlinging

Tesco are even at it, its 1.19c in Arklow, should as the op has said be 1.09 or less than a euro for petrol. Diesel should be a LOT cheaper again as when all this hysteria started Diesel was cheaper.

DarkJager

Who exactly would you need to complain to about this for it to have any real effect? I know people are always saying to boycott expensive petrol stations but thats obviously not worth a **** if they are all doing it..how are you going to drive otherwise?

I heard the AA were pushing for an investigation into it but thats gone very quiet.

Fighting Irish

If i had a business that sold something people needed, i'd try keep it as cheap as possible

seclachi

Fighting Irish wrote: »

If i had a business that sold something people needed, i'd try keep it as cheap as possible

Is that sarcastic or not ? Cos I know Id ride the sh*te out of them muhaha.

That being said I think the economics of oil at the moment means that oil producers are trying to keep it around $100 a barrel, as you`ll make more profit if you sell more oil at a bit less.

Of course I dont think that translates down to the feen who owns that garage near the dublin port tunnel who charges a fortune for petrol because he owns the only garage for miles around.

Duiske

seclachi wrote: »

That being said I think the economics of oil at the moment means that oil producers are trying to keep it around $100 a barrel, as you`ll make more profit if you sell more oil at a bit less.

Think you have hit the nail on the head there. The reason oil prices are dropping is simply because, as economies slow down, less oil is used and lower oil demand = lower oil prices.

Have to say though, I think some people are expecting too much from the oil price dropping. Oil was recently up around the $130 per barrel mark, and petrol roughly around 130c. That does not mean that petrol is going to drop to 80c now that oil is around $80 per barrel.

There are still huge costs in refining the oil, then transport costs, then govt levys, and after all that the retailers have to get a slice of the action.
When you takes all those costs into consideration, its quite possible we will never see petrol prices below 110c again, and certainly never below 100c.

edit : And yes, there are greedy cnuts out there. But, short of bringing in price controls on fuel there is nothing that can be done.

nogoodnamesleft

I was working in the UK over the past 2 weeks, the price for petrol there is roughly £1.10 per litre. Tesco announced yesterday that they were reducing the price of it by 3p and ASDA reduced it by 1p due to the cheapest price of crude in 12 months. AFAIK the fuel in the UK has more tax on it also and their still cheaper than here:mad:

mike65

How did you work that out (not with a pen and paper clearly!)?

1.10 pounds = €1.38

Mike

bazzachazza

They spout on about how it takes 4-6 weeks to reflect the drop in price of oil at the pumps yet it takes about 2 to reflect any upwards change.

The highest it went was $147 its now only Nymex Crude Future $77.70 as at close of US markets, I know it won't mean the price at the pump will be halved but i would expect the prices to tumble just as quick as the price of a barrel did. I would certainly hope we see very low teens if not just over a Euro per litre very soon.

Local prices here have gone from 1.35.9 to 122.9 a litre of diesel.

Hopefully happy driving days ahead:cool:

johnnysmack

just to let ye know my local station has been around 118c for petrol n 124c for diesel last 2 wks and saw a place in tralee earlier today dat had petrol for 113c. hopefully everywhere wil fall to this price too.

Bandara

DarkJager wrote: »

Its all greed and nothing more... The petrol stations have got too comfortable raking in the cash off overpriced fuel.

Raking in the cash you say???

Ok, well I own some petrol stations. I'd be absolutely delighted if you would please give me the benefit of your deep understanding into the fuel industry and advise me how I can actually make money out of selling petrol and run my business more profitably.

Please enlighten me, because despite my many years in the business I still cannot make more that 1.3 cents per litre regardless of the price I sell it for.

I await your advice humbly.

whiterebel

Hammertime wrote: »

Raking in the cash you say???

Ok, well I own some petrol stations. I'd be absolutely delighted if you would please give me the benefit of your deep understanding into the fuel industry and advise me how I can actually make money out of selling petrol and run my business more profitably.

Please enlighten me, because despite my many years in the business I still cannot make more that 1.3 cents per litre regardless of the price I sell it for.

I await your advice humbly.

You must be in the wrong business - You couldn't make more than 1.3c no matter what you charged for it? You should ask Denis O'Brien for advice, he obviously believes theres money in petrol and diesel.

bazzachazza

Ok, well I own some petrol stations

Must be SOME money in it if you have more than one.

Stephen

Most petrol stations make for more money from the attached shops than they do from selling fuel. Petrol just gets people in the door.

L1011

whiterebel wrote: »

You must be in the wrong business - You couldn't make more than 1.3c no matter what you charged for it? You should ask Denis O'Brien for advice, he obviously believes theres money in petrol and diesel.

The more you charge, the less you sell = the lower the rebates you get back for volume. This is likely what Hammertime means. If you jack the price up you'll still end up with much the same overall profit margin on the fuel, whilst damaging footfall to your shop.

If you're referring to O'Brien's supposed stake in Topaz - he's making money there off franchise fees from franchised stations, as well as the fact that their owned & operated stations mostly have large and profitable convenience store/deli's attached to them. Topaz even made a statement to the effect of trying to double non-fuel sales in the next few years, nothing about the fuel sales.

Jumpy

Its simple. Fuel is bought in bulk at a certain price, they will charge a margin of the price they bought it for until it is used. Then it will drop.

whiterebel

Jumpy wrote: »

Its simple. Fuel is bought in bulk at a certain price, they will charge a margin of the price they bought it for until it is used. Then it will drop.

So they are screwing everyone when they add increases on when an OPEC member blows his nose, rather than waiting for the next delivery?

The local petrol station here is one of the busiest in East Cork and still one of the most expensive, considering its 10 km from the refinery, which blows the more you charge= the less you sell argument out. Also other examples arround where garages still sell even if they are 15/20c a litre more than down the road.The local station here is far more expensive than a lot of places on the Dublin road such as Urlingford, Naas Road etc.

Hammertime

Hammertime wrote: »

Raking in the cash you say???

Ok, well I own some petrol stations. I'd be absolutely delighted if you would please give me the benefit of your deep understanding into the fuel industry and advise me how I can actually make money out of selling petrol and run my business more profitably.

Please enlighten me, because despite my many years in the business I still cannot make more that 1.3 cents per litre regardless of the price I sell it for.

I await your advice humbly.

I am sick and tired of the same excuse being used again and again. "We only make X on a litre of petrol". That is not answering the question as to why some garage owners are just too damn greedy to drop the prices but the minute there is even a hint of a rise in oil prices they shoot up. Yet some garages do lower there prices and I dont see them going out of business.

L1011

whiterebel wrote: »

So they are screwing everyone when they add increases on when an OPEC member blows his nose, rather than waiting for the next delivery?

The local petrol station here is one of the busiest in East Cork and still one of the most expensive, considering its 10 km from the refinery, which blows the more you charge= the less you sell argument out. Also other examples arround where garages still sell even if they are 15/20c a litre more than down the road.The local station here is far more expensive than a lot of places on the Dublin road such as Urlingford, Naas Road etc.

It may be 'one of the busiest in the area' in your eyes, but that suggests that there are other stations just as or more busy - do they by any chance have more pumps, too?

I've a relation who runs a station and what he tells me is very much in line with what Hammertime posts here - so I've no reason to believe either is lying. There is only around a cent a litre to be made on selling fuel and everything else comes from the shop. Prices drop as soon as the the drops can be afforded.

The major factor in rises and falls is the distributor anyway. If they're increasing their prices straight away whenever anything happens, there is nothing retailers can do about it.

eagerv

Maybe its in our interest Garage fuel prices dont drop too much before Tues. Gives the Budget Boys less leeway!

NiSmO

This post has been deleted.

seclachi

Diego Puny Pickax wrote: »

I am sick and tired of the same excuse being used again and again. "We only make X on a litre of petrol". That is not answering the question as to why some garage owners are just too damn greedy to drop the prices but the minute there is even a hint of a rise in oil prices they shoot up. Yet some garages do lower there prices and I dont see them going out of business.

Maybe you should send a letter to your td, because most of what you pay is tax. I also dont believe that garage owners have stock market listings in one hand and the price at the pump in the other, at least not all of them.

I believe the whole low margins thing, why did statoil and shell happily sell their stations to topaz. I also think there's a fair bit of competition amongst most stations in heavily populated areas.

L1011

NiSmO wrote: »

This post has been deleted.

I'm having difficulty thinking of a local station that doesn't have a car park... but yes, its fairly essential for the shop.

quarryman

Stan: Dad, how come Wal-Mart is able to sell everything so cheap?
Randy: It's simple economics son. I don't understand it at all. But God I love it.


tbh, I would have thought that if a petrol station WAS getting petrol cheaper they would be under-cutting their competitors which would drive the cost down. Maybe i'm just being naive...

Bandara

for the hundredth time on boards I'll say this.

PETROL STATIONS DO NOT CARE IF YOU BUY PETROL FROM THEM OR NOT, WE MAKE ESSENTIALLY ZERO MONEY ON, WE HAVE TO PAY FOR IT IN ADVANCE AND IT IS A NIGHTMARE PRODUCT TO STOCK.


All we make money on is the shop, petrol is in simple terms a loss leader to get you into the shop.

I repost (again) the follow explanation that I wrote to list exactly how it works in this business.

---

The entire topic of fuel prices and profits on fuel is so full of clueless people who are spewing out fantasy numbers that they heard on the radio, in the pub or in some rag like the evening herald written by a journalist who hasn't the first iota about what he is writing about.

If people really want to know about fuel margins and profits I will outline them here. People like Clare-guy who obviously know nothing about the subject run around screaming at the top of their voice that we're all being robbed. We're not, and thats an fact.

Ok, I'll cover the independantly owned stations as they make the most out of fuel.

I built my station within the past 7 years on a green field site for €2.3m in total, its a very nice site, busy and does close to 4.5 million litres a year, which in fuel sale terms is very good. (The majority of sites do about 2m liters a year in Ireland).

I have a very good deal on fuel as I have a strong bargining position with the fuel companies due to the volume I do. On Unleaded I have a 9.5c rebate off invoice.

Before people get excited that rebate is off the list price of the fuel, which we never sell at, we always sell about 5 or 6 cents below cost and the rebate structure brings it back into line and also gives me my profit.

So for the example of my Unleaded rebate, the list retail price I'm given is €1.309 a litre (I work off 3 decimal places), however I am actually selling the product at €1.259 a litre (so I'm losing 5c a litre off the list price). I buy the fuel for €1.081 per litre, the vat is added on and I'm paying a wholesale price of €1.309 a litre.

Still with me? Ok, at month end my total litre sales are added up and I apply for the rebate for the months sales. As previously mentioned I get a fixed unleaded rebate of 9.5c on petrol so if I do 300,000 litres of unleaded a month I'm now due a credit note of €28,500, of that amount exactly €15000 just makes up for the below cost sales I've had to carry for the month so my incl vat profit is €13,500, take the vat off that and I'm looking at a Gross profit of €11157. Now, out of this comes the following average monthly fees,

Forecourt maintenance contract - €541 a month
9 hours a week staff member to clean forecourt - €89.05
Fees to Bank for Laser/CC payments for fuel - €790
Blue Paper / Gloves - approx €75
Drives offs/stolen fuel last month €454.10
Fire extinguishers and other health and safety requirements €92
Site insurance / public liability etc €461

So total costs to keep the forecourt operational each month € 2502

less Gross Profit from above of €11157 = a €8655 Net Profit.

€8655 x 12 = Yearly Profit of €103,860 on €4,532,400 of Sales = retained margin of 2.29%.

Show me ANY other line of business in this country that survives on a margin of less than 2.5%. I have not even gone into the fact that When we get a delivery of fuel we have to pay for it immedatialy so we are always financing the product before we sell it. And we have to wait a month to get our profit and the cover for the below cost loss we make selling it.

btw Clareman, the person who said they make more on phone credit is not talking bullsh!t, the lowest margin on credit is 4%, which is 38% more margin than the one on fuel sales.

And before anyone says that making €100,000 a year is a lot of money, its not. I have a loan of €2 million to repay over 15 years. you can do the sums on that yourself.

Just to clarify, I'm not hear moaning about not making a living, I make a very good living, but what I'm saying here is that petrol does not contribute to it. The shop is the only area that I care about, In actual fact the dream scenario is never to sell a single liter of fuel and the same amount of people still come in to buy goods in the shop. Fuel sales are simply an attraction to lure people in.

The fact is I make more on a apple for 60c than I do on €30 of fuel.

So folks, next time you feel like abusing, cursing at or calling your friendly Service Station attendant a "f**kin robber" have a think about it first.....



p.s. Anyone want to buy an apple?