Fuel pricing - time to take that tough decision?

[Bobby Dazzler]

Mmm, they are not very good at it though are they? UK plc is a few interest rate rises away from bankruptcy.

Sounds like you’re better informed and better placed to judge than me.

 

[Gollom]

Does anyone know whether these wild fluctuations and variations in price are due to fluctuations in the cost per litre to the retailer, or are they mostly due to pure greed - charging as much as the market will bear?

IMHO it'll be a combination of both with companies taking advantage of the oil price to sneak in extra profits. I actually think that kind of thing is what's fueling a large part of the cost of living rise - people have been told that it will rise, so companies oblige!

(As others have said overnight!)

 

[GeeJayW]

As far as I know, the Retail fuel business just about ’wipes its nose’. That’s not where the likes of Shell and BP make their profits. They make more on a chocolate bar or a coffee than they do on a litre of fuel at the pump.

 

[MrGreedy]

As far as I know, the Retail fuel business just about ’wipes its nose’. That’s not where the likes of Shell and BP make their profits. They make more on a chocolate bar or a coffee than they do on a litre of fuel at the pump.

It might not be the retail outlets, that I assume are franchised. But there's a lot of oil being pumped, so I have to assume a few people are making very large amounts or money from it, or it wouldn't happen.

The C suite execs of the oil companies? Governments through tax and or licenses and the such like? Tens of $k a month 'consultancy' fees for people in power for far off land oil and gas producers? I wouldn't be surprised if this going on throughout the world, all piling up hidden costs to the people at the end of the chain; retailers and of course the consumer.

High prices does have the benefit of higher tax though, and this feeds through into higher prices for everything (e.g. everything is pretty much delivered by road in the UK, so uses fuel directly), and those higher prices on goods will net additional tax for the UK Gov. Could this be a good thing if it helps with spending it on worthwhile causes e.g. increased spending to bring the large backlog of NHS delayed operations down? We had 4.5m on a multi year backlog even before covid, so additional tax from fuel receipts could be used very well to get the waiting lists down. Let's hope it's not wasted

 

[BTB 500]

As far as I know, the Retail fuel business just about ’wipes its nose’. That’s not where the likes of Shell and BP make their profits. They make more on a chocolate bar or a coffee than they do on a litre of fuel at the pump.

And lube oils, heating oils, aviation fuel, LNG, LPG, marine bunkers, chemicals, oil trading, shipping, solar power, etc. etc. Global oil (now 'energy') companies do a *lot* more than sell road fuels (which as an aside might be more profitable in other countries with different tax/duty regimes than it is here?).

 

[pillow]

It might not be the retail outlets, that I assume are franchised. But there's a lot of oil being pumped, so I have to assume a few people are making very large amounts or money from it, or it wouldn't happen.

The C suite execs of the oil companies? Governments through tax and or licenses and the such like? Tens of $k a month 'consultancy' fees for people in power for far off land oil and gas producers? I wouldn't be surprised if this going on throughout the world, all piling up hidden costs to the people at the end of the chain; retailers and of course the consumer.

High prices does have the benefit of higher tax though, and this feeds through into higher prices for everything (e.g. everything is pretty much delivered by road in the UK, so uses fuel directly), and those higher prices on goods will net additional tax for the UK Gov. Could this be a good thing if it helps with spending it on worthwhile causes e.g. increased spending to bring the large backlog of NHS delayed operations down? We had 4.5m on a multi year backlog even before covid, so additional tax from fuel receipts could be used very well to get the waiting lists down. Let's hoe it's not wasted 

High prices are linked to inflation though. It will cost the government more to get things done.. so yes, whilst in £ terms the government will collect higher receipts, it will also cost them more to get the things you mentioned done. The increase in costs doesn't just impact the general public - it impacts everyone - public, businesses, government etc.

You could however argue all day about who, at the end of the day, is the net winner. I suspect the likely answer is the shareholders at said businesses but that's gut speculation.

 

[Jibbajabba]

Just the beginning:

UK petrol prices could hit £2.50 a litre and diesel £3, experts tell MPs

Diesel rationing a possibility after Russia’s invasion of Ukraine, Treasury select committee told

www.theguardian.com

 

[190]

Just the beginning:

UK petrol prices could hit £2.50 a litre and diesel £3, experts tell MPs

Diesel rationing a possibility after Russia’s invasion of Ukraine, Treasury select committee told

www.theguardian.com

I don't believe it.

The Guardian will have little trouble finding an expert with a quote to meet there alarmist headline but the reality is that crude oil is falling. Brent is down another 6% to 100.6 today. Sure diesel will go to £3 one day but not on the current trend for oil prices which has fallen from $131 to $100 in a week.

 

[Williamwoo]

I was buying diesel this morning at Morrisons and the price went up (from 168.9 to 171.9) while I was in the kiosk paying for it. There was no fuel being delivered at the time so I can only assume this was pure greed. I can prove it too as I took a pic of the pump display:


£84.84 for 50.23 litres = £1.689 per litre. (The diesel at 160.9 option was not working!)

 

[Deleted member 159894]

I was buying diesel this morning at Morrisons and the price went up (from 168.9 to 171.9) while I was in the kiosk paying for it. There was no fuel being delivered at the time so I can only assume this was pure greed. I can prove it too as I took a pic of the pump display:
View attachment 124863

£84.84 for 50.23 litres = £1.689 per litre. (The diesel at 160.9 option was not working!)

They price according to market conditions not by the delivery.

These calculations are run constantly by analysts at HO, the manager at the station has zero control over this.

 

[Bobby Dazzler]

You could however argue all day about who, at the end of the day, is the net winner. I suspect the likely answer is the shareholders at said businesses but that's gut speculation.

Even then though, those shareholders are every day people, some being direct shareholdings, others being indirect through pension schemes and other schemes, or some employee incentives.



This isn’t aimed @pillow

Human nature tends to make sense of the world through the concept of “they”, which is pretty much anyone and everyone who is not “them”, and may not even exist in many cases, like conspiracy theories for example.

Whether it be rich greedy shareholders, incompetent Government organisations, or even those described by some to have engineered the likes of COVID-19 the switch to electric vehicles, etc.

The reality is that not every shareholder is greedy, nor every Goverment employee incompetent, nor is there a machiavellian group behind events which are difficult to make sense of. It’s easier to say “they”.

It makes it easier to avoid responsibility and it makes it easier to lay blame because it is always someone else’s “fault” who cannot put a counter argument forward as it’s too generic or a public figure.

It’s always been the case. It’s how religions formed. Making sense of the world around us and the events which affect us, and explaining the unexplainable - years ago maybe disease, natural disaster, famine, etc.

There is no “they”, there is no greater power, there is no illuminati. There are just other everyday people who ironically believe that “we” are “they”, because to them that’s exactly what we are.

Back to topic. Many of us are shareholders, pensioners, company employees, tax payers, government employees, so all of us will be a “they” to someone somewhere, and we‘ll all both benefit and pay the price.

 

[E55BOF]

We're all doomed = They're all doomed, then...

 

[KeithJG]

My Father worked at the Isle Of Grain BP refinery in Kent for years and was in charge of blending oil in the huge farm tanks.
The galling thing is that Petrol and Diesel are bi- products of making other products from oil.....they are not produced separately they have to be produced in the cycle of converting oil to Plastics etc. and other products.

There are tanks and tanks of this stuff stored at refineries which were probably made using cheap oil and now the killing and profits takes place?

We are really rip off Britain ........why are Smart Meters being pushed by the Government?.......the cost of electricity will probably go sky high at busy times especially when all those electric cars are being charged!

The Government simply want all the money back after Covid and one way they do it pushing electric cars when they know full well that Hydrogen motors are the way to go.

 

[190]

I was buying diesel this morning at Morrisons and the price went up (from 168.9 to 171.9) while I was in the kiosk paying for it. There was no fuel being delivered at the time so I can only assume this was pure greed.

Has to be greed due to the short supply as Brent crude is now down to $98. It's only a matter of time before fuel prices drop and with 3/4 of a tank I have no intention of filling up again before they do.

 

[Bellow]

The Government simply want all the money back after Covid and one way they do it pushing electric cars when they know full well that Hydrogen motors are the way to go.

Can you elaborate on which 'hydrogen motors'? Fuel cells that require large amounts of very expensive platinum? ICE that have severe difficulties with hydrogen? Other type?
And can you suggest an on-vehicle storage system that weighs less than 100kg for every 1kg of hydrogen stored or do you have in mind Toyota's 97kg of carbon fibre tank which hold 5kg - at some considerable cost?
1kg of hydrogen has the equivalent energy value of 3.5 litres of petrol so your 'hydrogen motor' better be efficient or your storages system good - or both.

 

[pillow]

Even then though, those shareholders are every day people, some being direct shareholdings, others being indirect through pension schemes and other schemes, or some employee incentives.



This isn’t aimed @pillow

Human nature tends to make sense of the world through the concept of “they”, which is pretty much anyone and everyone who is not “them”, and may not even exist in many cases, like conspiracy theories for example.

Whether it be rich greedy shareholders, incompetent Government organisations, or even those described by some to have engineered the likes of COVID-19 the switch to electric vehicles, etc.

The reality is that not every shareholder is greedy, nor every Goverment employee incompetent, nor is there a machiavellian group behind events which are difficult to make sense of. It’s easier to say “they”.

It makes it easier to avoid responsibility and it makes it easier to lay blame because it is always someone else’s “fault” who cannot put a counter argument forward as it’s too generic or a public figure.

It’s always been the case. It’s how religions formed. Making sense of the world around us and the events which affect us, and explaining the unexplainable - years ago maybe disease, natural disaster, famine, etc.

There is no “they”, there is no greater power, there is no illuminati. There are just other everyday people who ironically believe that “we” are “they”, because to them that’s exactly what we are.

Back to topic. Many of us are shareholders, pensioners, company employees, tax payers, government employees, so all of us will be a “they” to someone somewhere, and we‘ll all both benefit and pay the price.

Some of those shareholders are, yes. But lets be realistic - it has been shown that wealth inequality has grown over time. i.e. the rich are getting richer, and the poor are also getting richer but not to the same degree - i.e. the gap between the 'rich' and the 'non-rich' is growing. Those that benefit the most are those with the most money, and I don't just mean in the sense that they have more invested so they get a bigger return, but the fact that in percentage terms their investment is growing by a greater percentage. I think the simple fact is, those who are likely to suffer most because of the increase in prices (those that are living on the edges of their means, who don't have pension pots to grow, who don't have spare money to invest etc.) are the ones who are at the largest disadvantage and who stand to gain little nothing (and in most cases I suspect are likely to find themselves far worse off) whereas those on the opposite end of the spectrum will quite possibly benefit quite a bit.

So while I agree with you that it cannot be distilled into a simple them vs. us or anything as simple as this, it can be said with a fair degree of certainty that those who are likely to benefit most are probably those that do not need to. And those who will benefit least (or lose out) are those that can't afford to.

I agree with your latter point as well - we do live in a world of identity politics now. I guess it all stems from the idea of power in numbers, and that numbers can be acquired by creating/using an identity.

My Father worked at the Isle Of Grain BP refinery in Kent for years and was in charge of blending oil in the huge farm tanks.
The galling thing is that Petrol and Diesel are bi- products of making other products from oil.....they are not produced separately they have to be produced in the cycle of converting oil to Plastics etc. and other products.

There are tanks and tanks of this stuff stored at refineries which were probably made using cheap oil and now the killing and profits takes place?

We are really rip off Britain ........why are Smart Meters being pushed by the Government?.......the cost of electricity will probably go sky high at busy times especially when all those electric cars are being charged!

The Government simply want all the money back after Covid and one way they do it pushing electric cars when they know full well that Hydrogen motors are the way to go.

I don't think it's correct to say they are "by-products" (byproduct being a secondary or incidental consequence of another process) but getting petrol and diesel from crude oil is part of a much larger process of breaking crude oil down into constituent parts, a pair of which are diesel and petrol. (Fractional distillation if you want to read about it).

Re smart meters - you probably do not appreciate how much fuel is wasted by generating electricity we don't need. In order for the national grid to not cut out they need to 'overgenerate' electricity, and I believe the mechanisms for determining load are good enough to see whether generation needs to be ramped up or not, but not good enough to paint a fully clear picture of demand. Smart meters provide valuable and precise data of peoples usage so that the places where energy is being generated can avoid 'over-generating' and generate only what is required. This reduces costs (whether these cost savings get passed on or not is not really something I'm going to speculate or argue about).


Your final point doesn't really make much sense. Why do you think the government pushing EVs rather than Hydrogen motors? Do you think EVs somehow net the government more money? You don't think the government could charge fuel duty on hydrogen? Your point doesn't make much sense to me.

 

[DrNick]

As others have pointed out, price is on the way down at least in the short term. Could easily go up again though.

Pump prices are not entirely connected to the price of crude though. Certainly on the continent they have had dynamic pricing for several years, where local prices can change by the hour depending on local demand. Bit like surge pricing on Ubers. Not that its publicised much.

 

[Bobby Dazzler]

Like any business, the selling price of retail fuel will be determined by a combination of the input costs and market forces, ie how much it costs to buy/make balanced with supply and demand.

Both the input costs and market forces are variable, and so when something changes the cost sometimes change too, eg sometimes cost increases are absorbed by the seller and other times they’re not.

If the cost of making/buying widgets increases or demand changes, a widget seller doesn’t wait until the last widget produced prior to the change has been sold before changing the price.

Retail fuels are no different however as it’s linked to the commodities market, some of the input costs are visible to the consumer and vary by the moment not the month as may be the case in other industries.

The oil companies, distributors and retailers have “stuff” to sell which has cost them umpteen different amounts to make, move and serve, but have to price it the same at the point of serving.

As a result there is no reason to expect the cost at the pump to mirror the movements of the price of a barrel of oil. The cost of oil is one element of the overall cost, so it may move at similar times, but not the same.

 

[Bobby Dazzler]

There are tanks and tanks of this stuff stored at refineries which were probably made using cheap oil and now the killing and profits takes place?

I don’t suppose you know the volume of those tanks, how full they are and how long they would last do you?

I doubt it’s anything more than a short term buffer in the system - to absorb the ebb and flow of production.

if supply stopped how long would those tanks enable BP to continue serving? I can’t imagine it would last long.

 

[Bobby Dazzler]

Can you elaborate on which 'hydrogen motors'? Fuel cells that require large amounts of very expensive platinum? ICE that have severe difficulties with hydrogen? Other type?
And can you suggest an on-vehicle storage system that weighs less than 100kg for every 1kg of hydrogen stored or do you have in mind Toyota's 97kg of carbon fibre tank which hold 5kg - at some considerable cost?
1kg of hydrogen has the equivalent energy value of 3.5 litres of petrol so your 'hydrogen motor' better be efficient or your storages system good - or both.

+1

It’s incredible how many experts there are on the use, transport and storage of hydrogen unyet car manufacturers and fuel companies who have invested billions in R&D are still struggling to get a safe, scalable and cost effective solution to market.